Today, Senator Michael J. Skindell (D-Lakewood) spoke out against a Senate amendment added to Amended Substitute House Bill 49, known as the state’s biennial operating budget. The amendment, which allows the Public Utilities Commission of Ohio (PUCO) to adjust rates to utility customers of electric distribution utilities based on its credit rating, could result in higher rates to customers. The amendment was secretly inserted into the bill at the last minute, without opportunity for the public to weigh in.

“This is another example of the Ohio General Assembly benefitting a utility company at the expense of consumers,” said Senator Skindell. “Energy companies should be providing their services as promised from the start, rather than appealing to a few State Senators to fix their problems by manipulating our state budget.”

In essence, the PUCO would be able to adjust the rate an electric distribution utility may charge to customers under an electric security plan. This would be done so the utility could achieve and maintain a minimum credit rating that is at least an investment grade credit rating.  This move would help utilities when their credit rating is downgraded. 

According to an article in Midwest Energy News, “[The amendment] would expressly authorize extra charges to ratepayers to support utilities’ financial health.” 

The budget provision would directly benefit First Energy. According to an article on Cleveland.com, “Of the state's major electric utilities, FirstEnergy has a junk bond rating on its senior unsecured bonds, according to Standard and Poor's ratings. FirstEnergy's S&P rating on its long term secured debt is medium investment grade, but with a negative outlook.”

According to the Ohio Consumers’ Counsel, as well as other consumer and business advocates, this is an anti-consumer provision that will enable electric utilities to increase rates for Ohio families and businesses based on maintaining utility credit ratings.  It goes against recent Ohio Supreme Court decisions and may interfere with current appeals from customers based on rate increases currently before the Court. 

Senator Skindell also denounced the lack of transparency surrounding this legislation. It was snuck into the budget bill at the last moment during Senate deliberations.  

“Having energy companies improve their credit ratings through lobbying efforts in the General Assembly is a privilege that normal Ohioans do not get when their credit scores are in trouble.  This amendment is unfair. The process that inserted it into the budget is unfair.  This energy company’s amendment does not belong in Ohio’s budget.”

 
 
 
  
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