June 10, 2026 · Public Utilities Committee · 9,915 words · 18 speakers · 125 segments
Good morning, everyone. Senate Public Utilities will now come to order. If you would, please stand and join us for the pledge. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. The clerk, please call the roll.
Chair Wilkins. Here.
Vice Chair Reineke. Here.
Senator Brenner. Present. Senator Chaga. Here.
Senator Gavaro. Here.
Senator Manchester. Senator Romachuk.
Here. Senator Wilson.
Present.
Thank you, Member DeMora.
Here.
Senator Blackshear? Here.
Senator Smith? Here.
With quorum present, we will proceed as a full committee. Members of the committee, minutes are on your iPad. If there's any additions or corrections, please let us know. Hearing none, minutes will stand as presented. The plan today for this committee will be to hear testimony, and then we will recess. So those of you that somehow, someway are frantically scurrying over Dash 4, you are scurrying over the wrong bill. So with that, our first order of business today is to bring forward substitute House Bill 173 for its third hearing. First is John Sarek with the Ohio Manufacturers. Welcome to committee. You may begin when ready.
Thank you. Chairman Wilkin, Vice Chair Reineke, Ranking Member DeMora, and members of the Public Utilities Committee. My name is John Syriac. I'm founder of Runnerstone, an energy consultancy, providing accurate, unbiased information on energy policy regulations and market matters, and also Go Sustainable Energy, which provides energy management advice to customers. I serve as the energy engineer to both the Ohio Manufacturers Association and the OMA Energy Group. It is on the OMA's behalf that I testify today. As currently drafted, the new sub bill dash three brings commercial and industrial customers into the residential sub metering debate and threatens competitive markets by prohibiting or restricting the construction and sub metering of behind the meter projects or advanced energy resources on the non residential customers properties. By defining sub-metered utility service to include a service or benefit from an advanced energy resource and electric service to non-residential customers, that's on line 64 to 66, the sub-bill risks on doing some of the great progress made toward improving competitive markets and on-site generation through House Bill 15. With the change in definition, it appears that the following provisions are not limited to sub-metering providers who serve residential tenants, but would also apply to commercial customers. I'll let you read those sections. There's quite a few. More specifically, the new section prohibits conversions of existing commercial buildings to sub-metered properties behind a master meter on a commercial property. Not only would this result in the prohibition of adding new technologies behind the meter, including demand response and efficiency measures, it would prevent businesses from serving separately metered buildings on its own campus in an industrial park in a warehouse or two unrelated or affiliated companies under one roof or on the same property And just to give you an example of how this would play out in the real world when a manufacturing would be expanding, often they might look at a property that's adjacent to them and has a vacant building, so the manufacturer might expand into that space to put a new operation in of their own or for an affiliate. It wouldn't be uncommon for that manufacturer when they take over the building to consolidate the electric service to one meter. That's a way to reduce electric costs to the company. They would then maybe submeter to that building if it's a separate process or an affiliated process. Under this bill, then, that would be that sort of action right now, which manufacturers can take on their own without regulation, would be captured under this bill. So that's one of the reasons we're concerned. Moving on, notably the new section would also prevent existing commercial and industrial customers from adding behind the meter generation that is sub-metered. That could include fuel cells, SMR, gas plants, solar facilities, batteries. This would result in discriminatory treatment to existing customers in favor of new customers and new construction. So, again, I think you all know customers, manufacturers, and others are rapidly expanding their adoption of behind-the-meter generation. That is almost always sub-metered and behind-the-meter. So including that definition within the sub-metering definition here would capture all that behind-the-meter generation as a utility service. At a time of surging energy costs facing Ohio businesses and a push for large customers to supply their own generation and become more efficient, the OMA urges the Senate Public Utilities Committee to remove the provisions that will result in the unintentional consequence of prohibiting or restricting the construction and submetering of behind-the-meter projects or inclusion of advanced energy resources and initiatives on the non-residential customers' properties. To accomplish this goal, OMA urges adoption of the amendment attached to this testimony, AM 136-2828. Thank you for your consideration of this testimony. I'm happy to answer any questions.
Thank you for your testimony. Any questions for the witness? Senator Romanchuk.
Thank you, Mr. Chairman, and maybe this question goes to you as well. is this new version that you spoke of a minute ago, would that fix this problem that's been just now revealed?
Yes, our attempt is to make sure that behind-the-meter generation is not considered a public utility. Okay, thank you.
Any other questions? Sorry, Mr. Chairman, one more. Senator Romero.
You threw me a curveball there, so does it fix this problem? sir, that he just identified? Because you just said it doesn't, you know, designate it as a public utility. I don't think I want to hear that. I want to hear that it fixes this problem he just testified to.
So the, yes, our intent is to fix behind the meter generation. Okay. So once we read it, hopefully it's fixed. If not, we'll have to go back and do another one.
Okay. Thank you.
Any other questions? Seeing none, thank you for your testimony.
Thank you.
Second witness is Corey Thirthaler, if I got that right or not. Is Corey here?
Oh. Okay Welcome to the committee You may begin Perfect. Alrighty. I just want to preface my notes that you might have. I'm not an expert in this bill, legal jargon or anything. I simply am standing here before you as the residential side of who this might impact. So I will start with my written testimony. Chair, vice chair, ranking member, and members of the committee, my name is Corey Durthaler, and I live in Columbus, Ohio. Let me be honest with you about how I feel standing here. I took time off to be in this room today. I was not paid to be here. The people who want House Bill 173 are. Nationwide Energy Partners has nine registered lobbyists working this building, according to state filings. So while I'm spending a day I can't get back, they've got a full team working you. This should tell you something about who the bill is really for. Frankly, I should not have to be here at all. Neither should many of you. I hope to be a homeowner soon, so I'm not really speaking for myself here. I came anyway because the principle bothers me. Two months ago, the Ohio Supreme Court unanimously ruled that companies like NEP are public utilities subject to the oversight of the Public Utilities Commission. The question was asked and answered, and yet here we are because House Bill 173 exists to quietly unanswer it and overturn a decision that already protects people on behalf of companies that lost. because that's what this bill does. The court's rulings means real protections, rate scrutiny, billing transparency, disconnection safeguards, bill payment assistance. House Bill 173 trades all of that for a narrower rule book the industry helped shape. The sponsor himself said he won't give up legislative authority over the industry. Translation softer rules than the court in PUCO would set. Don't let anyone tell you these companies are not utilities. The court looked at the facts. NEP buys electricity at a commercial rate, resells it to tenants at a higher one, and pockets the difference. It bills tenants directly. It shuts off power when people don't pay. As the justices wrote, from the tenant's perspective, NEP is for all practical purposes the supplier of their electricity. And what do tenants get? A higher bill they can't make sense of. Last year alone, Ohioans filed more than 555 sub-metering complaints to PUCO, most of them about cost and not being able to see how the cost was set. Columbus acted already. This past December, the city passed its own ordinance reining these companies in, capping fees, banning charges for the landlord's common areas, requiring payment plans. A single city did what the state still hadn't, and House Bill 173 would undercut that from above. Consider who's on both sides of these deals. The founder of Nationwide Energy Partners is also the founder of Lifestyle Communities, an apartment developer. This also isn't coincidence. Another instance that was actually presented to me in research the preceding days was Oakwood Management Company and Buckeye Utilities, being owned by and operated by a principal named John D. Weimer. So ask who creates the need for submetering in the first place. It's the developer. developer, the same one who decides how a building is wired and whether the utility can bill each tenant directly. In these examples, the same man runs the developer and the sub-metering company. The building gets set up so the utility can't bill tenants directly and then his other company steps in to bill them instead at a markup That not filling a gap That building one and charging rent on it Tenants never get a vote They just get the bill My ask is simple, and so is the choice in front of you. Vote no on the proposed bill. If a landlord builds or buys a property, the utility can't bill directly. That's the landlord's cost to carry, the same way a leaky roof is. It doesn't transfer to the tenant, and it doesn't justify a markup that never ends. A yes vote isn't neutral. It puts the corporations ahead of the Ohioans paying the bills. And it throws out a unanimous court ruling that these companies are public utilities under Ohio law. If you want to legislate, legislate towards the ruling, like a sister bill, House Bill 265 does. The only people who need this bill are the ones profiting from the gap that it protects. Thank you for your time. I'm open to questions.
Thank you for your testimony. Are there any questions for the witness?
Senator DeMora. Sir, thank you for coming in. Have you lived in one of these buildings before?
You said you wanted to buy a house, so I'm assuming you are a renter somewhere. Sure, yeah. So I've rented for 17 years. I had a longer speech where I referenced that, and I guess I got lucky for the most part by having smaller landlords that did not have these sub-metering things, so this wasn't even on my radar until recently. So yes, it's very interesting that I'm kind of unraveling and seeing how these companies are operating, and it seems like they're just designed. There seems to be a whole separate issue of the fact that these sub-metering companies are connected directly to the properties themselves. So that opens a whole other can of worms where they can have competitive rates and then make up the difference on the back end on their sister company. So yes, I have experience recently and that's kind of what spurred my outrage towards it the past year because I did not even know, for 17 years I didn't know that these existed.
Follow up? Nope, thank you Mr. Chairman.
Any other questions for the witness? Seeing none, thank you for your testimony.
Thank you.
Next witness is Jason Dorsey with AES Ohio. Mr. Dorsey, welcome to committee. You may begin when you're ready.
Thank you. Chairman Wilkin, Vice Chair Reinke, Ranking Member DeMora, and members of the Senate Public Utilities Committee, thanks for the opportunity to provide opponent testimony to House Bill 173. My name is Jason Dorsey. I am the director of metering services for AES Ohio. AES Ohio, formerly the Dayton Power and Light Company, serves over 530,000 customers in west central Ohio. Over 29, or excuse me, over 2,900, employees and retirees have served as the backbone for affordable and reliable electricity across the 6,000 square mile service territory covering 24 counties over the last 100 years. AES Ohio is responsible for delivering electricity to customers safely and reliably through our distribution and transmission system. As a poles and wire company, we're the critical link between the competitive generation market and our customers. AES Ohio opposes House Bill 173 and believes that the Ohio consumers deserve equal and fair consumer protections no matter where they live within the EDU's service territory. AES Ohio does support efforts to ensure that all electric customers, regardless of whether they receive service directly from a regulated utility or through a third-party reseller, are afforded those same rights, protections, and transparency. However, as currently written, House Bill 173 does not go far enough to achieve that goal. The bill does not provide customers served by a third-party reseller the same statutory rights and regulatory protections that are guaranteed to those customers served through a regulated utility. Without such protections, customers could face inconsistent billing practices, limited recourse in the event of a dispute, and uncertainty regarding disconnection procedures. Under Ohio's electric restructuring framework, customers have the right to shop for their generation supply. House Bill 173 does not preserve this right for customers served through submetering arrangements effectively and limits customer choice really undermining the intent of the electric competition in the state of Ohio. AS Ohio and other electric distribution utilities operate under strict regulation with rates and returns carefully reviewed and approved by the Public Utility Commission to ensure fairness and cost transparency. In contrast, House Bill 173 would permit a third-party submetering entity to leverage that cost structure and returns of a regulated utility while reselling electricity at an unregulated rate. This could allow such entities to earn a profit well above market rates, all while serving a captive customer base. When we submitted testimony last fall in the Ohio House Energy Committee, unresolved court cases involving Ohio utilities such as AEP and Duke Energy and third-party resellers, including nationwide energy partners, were still pending. Recently, the Ohio Supreme Court reversed a PUCO ruling that third-party submetering companies were not a public utility. The court remanded it back to the PUCO to develop rules to regulate their business practices. We urge, really, the General Assembly to exercise caution by amending the revised code before the PUCO has had the opportunity to act. The Commission has the authority, the technical ability, and the expertise to ensure proper consumer protections, whether those customers are served by the local utility or by a third-party sub-metering company. So AES Ohio does appreciate the General Assembly's attention to this important issue. We share your goal of ensuring that Ohioans receive safe, reliable, and appropriately priced electricity. Thanks for the opportunity to share comments here. I'd be happy to answer any questions.
Thank you very much for your testimony. Are there any questions for the witness? Seeing none, thank you. Next we have Angela O'Brien with the Office of the Consumer Councils. Welcome to the committee. You may begin when you're ready.
Thank you. Good morning. Chairman Wilkin, Vice Chair Reinecke, Ranking Member DeMora, members of the Senate Public Utility Committee, thank you for the opportunity to provide opponent testimony today on Substitute House Bill 173-3. My name is Angela O'Brien, and I serve as the Deputy Director for the Ohio Consumers Council, the state agency charged with representing the interest of Ohio's residential utility consumers. OCC advocates for about 4.5 million households on matters affecting the affordability, reliability, and transparency of utility service This year marks OCC 50th year of service to Ohio consumers OCC appreciates the opportunity we have had to work with Representative Thomas and previously support House Bill 173 as it was passed by the House However, circumstances have materially changed. OCC now opposes substitute House Bill 173-3 because it would deny important rights and protections to sub-metered apartment and condominium residents At the very moment, the Supreme Court of Ohio has recognized those consumers are entitled to them. The reason for OCC's change position is straightforward. In the complaint of Ohio Power Company versus Nationwide Energy Partners, the Supreme Court of Ohio determined that the resale of electricity is a public utility service subject to full regulation by the Public Utilities Commission of Ohio. In plain terms, the court recognized that the service being provided by electric resellers like NEP is not meaningfully different from the service provided by regulated public utilities. And importantly, the court's ruling protects tenants and condominium residents who often have no meaningful ability to choose their electric provider or negotiate the terms of their service. These concerns aren't hypothetical. Ohio consumers have lived with the consequences of inadequate oversight for years. OCC no longer has a call center, but apartment complex residents still reach out to us regularly, seeking assistance regarding their sub-metered service, including service provided by NEP. OCC has been limited in its ability to advocate for these consumers. In fact, NEP opposed OCC's intervention to advocate for consumers in the AEP Ohio complaint case, and the PUCO denied OCC's intervention. Complaints OCC receives from sub-metered consumers include but are not limited to excessively high bills were routinely contacted from consumers about several hundreds of dollars monthly bills for square feet apartments that are less than 1,000 square feet. threats of disconnection and excessive disconnection fees, excessive and improper charges for common area service, poor service quality and reliability, and no customer service after business hours. The Columbus Dispatch documented instances where some of the sub-metered residents paid electricity charges significantly above utility rates. faced additional fees, and had limited recourse to challenge bills. Many consumers had no practical ability to choose another provider because submetering was embedded in their lease or housing arrangement. This matters because utility consumers should not lose protection simply because they live in an apartment or a condominium rather than a single-family home. The Supreme Court's decision recognizes that reality. The court's decision means that the PUCO already has both the legal authority and the responsibility to regulate electric resellers under the existing Ohio law in Title 49 of the revised code. Contrary to proponent testimony, additional legislation is not necessary to establish consumer protections or a regulatory framework. The framework already exists, and the PUCO has decades of expertise regulating residential utility service. More importantly, the court's ruling means that there no longer should be second-class utility consumers in Ohio. Apartment and condominium residents served through submeters should receive the same rights same protections as consumers who receive electric utility service from a regulated utility These protections include PUCO oversight of rates and charges statutory complaint rights and investigations, disconnection protections, budget billing options, transparent billing practices, and the ability to shop for a competitive electric supplier. Sub-House Bill 173-3 takes Ohio in the opposite direction. Rather than ensuring equal treatment, the bill would create a separate and lesser regulatory framework for sub-metered residents, consumers who are often renters and have little bargaining power. Ohio has already seen what happens when utility middlemen operate without full utility oversight. The lesson from Ohio's experience is not apartment residents need a separate and lesser regulatory system. It is that they deserve the same protections of every other utility consumer. Proponents have argued that the bill contains meaningful consumer protections. OCC respectfully disagrees. Even with the recent revisions, sub-House Bill 173.3 falls significantly short of the rights consumers would receive under the Supreme Court ruling and, in several respects, is a step backward from the House-passed version of House Bill 173. First, the bill denies consumers meaningful electric choice. It always did. Proponents have compared this limitation to municipal aggregation programs, but that comparison misses an important distinction. Consumers and aggregation programs generally retain the ability to opt out and shop independently. Submetered residents don't have that choice. Second, the bill continues to deny vulnerable consumers access to percentage of income payment plan assistance. And it always did. Under the court's ruling, in existing law, eligible consumers can access important affordability protection such as PIP. Sub-House Bill 173 leaves these consumers without access to those programs, despite facing the same energy affordability challenges as other Ohio households. Third, proponents suggest the bill limits sub-metering, but the language still permits expansion. Sub-House Bill 173 includes language preventing certain conversions of buildings already receiving direct utility service. However, proponent testimony appears to narrow the practical significance of that restriction. At the same time, the bill continues to permit submetered utility service in new developments. Fourth, sub-House Bill 173.3 weakens consumer complaint rights compared to the House Pass Bill. The House Pass version included statutory complaint and PECO investigation provisions in proposed sections 4933.63, 4933.64. Those provisions have now been removed from the sub-bill. Under the Supreme Court's ruling, consumers would instead have access to longstanding complaint protections under existing Ohio law, including RC 4905-26. Fifth, the substitute bill removes funding for oversight. The House-passed version included an up to $1,000 registration fee for sub-metered service providers to help support the PUCO oversight and implementation. That section has been removed from the sub-bill. Finally, proponents claim the bill newly requires high-quality, safe, and reliable service. Providing safe and reliable service should not be viewed as a new consumer protection. It's a basic obligation. The Supreme Court's ruling in existing public utility law, electric resellers would already be required to provide these standards. At its core the bill asks whether Ohio will treat some utility consumers differently simply because of where they live A family living in an apartment or a condominium should not receive fewer rights fewer protections and fewer choices than a family living across the street in a single-family home. The Supreme Court of Ohio has already spoken and recognized that the resale of electricity is a public utility service and that these consumers deserve the protections of Ohio public utility law. The PUCO has the authority and the expertise to implement that ruling. Sub-House Bill 173-3 would move Ohio backward by replacing those protections with a lesser system that leaves sub-metered consumers with fewer rights than their neighbors. Ohio should not respond to a Supreme Court decision expanding consumer protections by legislatively taking those protections away. For these reasons, OCC respectfully opposes Sub-House Bill 173-3. Thank you very much for your time and consideration. I'm happy to take any questions.
Thanks for your testimony. Are there any questions for the witness? Senator DeMoore.
Thank you, Mr. Chair. So I'm a little confused because this bill is so much better than the bill that was passed by the House. But you guys were for the bill passed by the House, but you're not for this. and that's just a little confusing to me because, I mean, admittedly, I don't particularly think this bill goes far enough, but this bill is certainly better than, certainly more protections than what passed the House, so I don't understand how you guys switched from being proponents to opponents. I know the court case happened, but if you take away the court case, how did the Consumers' Council switch from being pro-bill to anti-bill when this bill is certainly better than the other bill?
To the chair, vice chair, senator, thank you very much for the question. I think OCC would respectfully disagree that sub-House Bill 173.3 is an improvement from the House-passed bill. First of all, as I explained, there are several ways in which the sub-bill moves backwards from House Bill 173. As I mentioned, notably, complaint investigation provisions are expressly written out of the House bill as passed. those are not in there. So that's something that consumers would lose, sub-metered consumers would lose. They would lose a statutory protection to file a complaint with the PUCO and mandated PUCO investigation responsibilities. Those provisions simply are not in the sub-bill, so that is one primary way. As to why OCC changed our position, when the Supreme Court's ruling gives sub-metered consumers all of the rights and protections under Title 49 of the Ohio Revised Code, all of them. They get the whole shooting match. They get PIP. They get the ability to choose their supplier, which is a huge one. OCC initially was in support of House Bill 265, which designated sub-meters as public utilities and would have provided them with that protection. House Bill 173 that OCC supported provided certain guardrails that didn't exist at all, with not knowing that the Supreme Court would act the way that it did in its ruling. The Supreme Court ruling basically says that submeters who resell electric utility service should now be regulated as public utilities by the PUCO. So that means consumers get everything. They get all the protections. They get the exact same protections as someone living in a 5,000 square single-family home and that is served directly by the utility. If we were in support of the House Bill now and Sub-House Bill 173-3, first of all, as I mentioned, Dash 3 is a step backward, so we don't believe it is improved. And that would mean that consumers' rights would be limited versus what they get now, and that's why OCC changed their position.
Follow-up?
Any other questions?
I have a question. So would you be in support of 173 as passed by the House after the Supreme Court decision?
To the chair, thank you for the question. The answer is no, we would not. Because, again, as it stands, the Supreme Court of Ohio has spoken that resellers of electricity should be regulated as public utilities. and consumers should get all of the rights that a consumer of a PUCO-regulated utility would get. So if we were in support of as passed House Bill 173, that would be taking away rights from consumers.
And do you also agree that the Supreme Court said it's up to the legislature to act off this ruling?
Thank you for the question. To the chair, I would have to go back and look and see what the Supreme Court exactly said on that front. My understanding is that the Supreme Court interpreted Ohio law as it stands and stated that the legislature can act. However, OCC's position is that the legislature does not need to act because the statutory framework and regulatory framework exists under Title 49 of the code.
Any other questions? Seeing none, thank you for your testimony. Thank you very much. Next witness is Rocco DiAcenzo. Close? Right on. Welcome to committee and you may begin when you're ready.
Thank you. Chair Wilkin, Vice Chair Reinecke, Ranking Member DeMora, and members of the Senate Public Utilities Commission. My name is Rocco DiAcenzo, and I am Deputy General Counsel for Duke Energy Ohio. In that role, I advise the company on legislative policy issues and represent the company in proceedings before the Public Utilities Commission of Ohio. Thank you for this opportunity to submit testimony regarding Substitute House Bill 173. I apologize for my voice this morning. I'm on the back end of a cold, and so in the interest of time and to preserve my voice for questioning, I will be summarizing my testimony. Submetering removes rights and protections that are afforded to regulated utility customers and increases costs for other remaining utility customers. The Ohio Supreme Court recently affirmed that submetering companies currently operate as public utilities under Ohio law, and that decision is currently under reconsideration by the court. If reconsideration is denied, the Public Utilities Commission can then proceed with bringing the industry into compliance with existing regulations that are applicable to utilities, including the rights and protections provided to non-submetered electric customers. Duke Energy Ohio recognizes that the substitute version of 173 is an improvement in some respects most notably by prohibiting the conversion of existing regulated utility customers to submetering service That is a positive step, but the bill still raises concerns, serious concerns, from a policy, legal, and practical perspective for both Ohio consumers and regulated utilities. Submetering, submetered customers still lose those fundamental rights and protections available to regulated utilities, including the ability to choose a competitive retail electric supplier despite Ohio's long-standing retail choice framework, and lose access to bill assistance programs that are available to direct utility customers, including Ohio's percentage of income payment program. Further, House Bill 173, under House Bill 173, utilities still face mandates that constrain our ability to plan, design, construct, and operate and maintain our energy delivery systems for the benefit of all customers. This is in two key respects. First, under 173, utilities are forced to sell their equipment to submetering companies or customers at mandated prices that may not reflect the equipment's true value. Solely to benefit submetering suppliers and make their entry into the business easier and less expensive. This forced sale prevents the utility from redeploying their equipment to the benefit of other customers. And second, House Bill 173 unreasonably limits the factors that utilities can consider when they plan and design and locate their equipment. It does this by requiring them to plan for possible future submetering installations that may or may not ever occur. Safety and reliability are indeed important, but so are other factors, including cost, access to the equipment in order to maintain it properly, meeting design standards, and complying with existing codes. Those factors must be considered by the utility when we locate or relocate our equipment. For these reasons, the substitute bill still does not adequately protect customers. Duke Energy Ohio urges the committee to delay passage of House Bill 173 and allow the court to rule on reconsideration and permit the PUCO's process to proceed. In the alternative, if House Bill 173 must move forward, at least three provisions must be addressed. The bill's prohibition on converting existing customers to sub-metering should be expanded to cover all conversion scenarios, scenarios, including the termination of utility service solely to force a utility asset sale and immediately commence submetering. To enable this, a simple lookback provision, for example, could be added, where if a customer, if a premises has been served by a utility within a reasonable period of time, 180 days, for example, that the conversion could be forestalled or prohibited. Second, the mandate in 49.3353 that would require a utility to sell its equipment to a customer or submetering supplier must be removed. And finally, the bill's restriction on how a utility plans designs constructs locates or relocates its equipment must be removed or amended to allow greater flexibility and consideration of additional necessary planning criteria Thank you. I'd be happy to take questions.
Thank you for your testimony. Are there any questions for the witness? Seeing none, thank you.
Thank you.
Chair, we now call Peggy Lee with Legal Aid of Southeast and Central Ohio. Welcome to committee. You may begin when you're ready.
Thank you. Chair Wilkin, Vice Chair Reineke, Ranking Member DeMora, and members of the Senate Public Utilities Committee. My name is Peggy P. Lee, and I am a senior staff attorney with Legal Aid of Southeast and Central Ohio in the Athens office. I am testifying today in opposition to HB 173-3. Legal Aid of Southeast and Central Ohio serves 36 counties across rural Appalachian, Ohio, and Central Ohio. My office in Athens alone serves seven counties, where a lack of decent affordable housing has been a long-standing problem. Our client populations often have to look to manufactured home housing parks for affordable housing, quote-unquote, or in many cases affordable, quote-unquote, home ownership. It is within this context that I am speaking to you today about behind-the-meters utility service. In my 25-plus years of working in rural Appalachian, Ohio, one of the most common problems plaguing residents living in manufactured home parks is being at the mercy of whatever utility scheme is already present at the park or whatever submetering scheme the park decides to incorporate. Although most of our park residents have water submetered, which is not addressed in this bill, to their homes versus electricity, they still suffer the same indignity of being a consumer with fewer protections and a lack of access to assistance programs merely because they were not public utility customers. They do not benefit from PUCO's protections on when and how public utilities disconnect service. They do not benefit from PUCO's PIP Plus Assistance Program, nor do they get options for repayment assistance programs like budget billing when unexpected hardships arise. And in today's economy, that is surely going to happen. To add insult to injury, park residents currently cannot even expect to have transparent billing, explaining why their costs significantly increased under the proposed legislation. In fact, a major investigation by the Columbus Dispatch discovered that the practice of submetering inflated costs from 5% all the way up to 40% due to added fees and markups, which are not subject to any regulation. When compared to customers who are billed directly by a public utility ultimately submetering provides benefit to no one but the submetering companies and landlords The latest version, HB 173-3, is not much, if any, better. It eliminates statutory complaint rights and mandatory PUCO investigations of submetering company violations and leaves complaint processes to future rulemaking. This is both unnecessary and harmful given the formal complaint rights that currently are in place under our revised code section 4905.26. It mandates high quality, safe and reliable service, quote unquote, but this is already present and is required of public utilities under PUCO regulations. Most importantly, clients who are sub-metered would still not be on the same playing field as they are not now as public utility customers under the proposed legislation. Submeter tenants would not have the same consumer protections and benefits as customers of PUCO-regulated utility companies, including access to much-needed assistance like HEAP, home energy assistance programs during the winter so that they don't freeze to death, alternative payment plans, assistance programs, notifications of assistance programs, and disconnection requirements. It should not be the case in today's Ohio that a lesser protected utility customer be created with this legislation merely because their landlord or park owner decided to use submetering services. For the above reasons, I oppose HB 173 and 173-3. I thank the committee for the opportunity to speak this morning, and I'm happy to answer any questions.
Thank you for your testimony. Are there any questions for the witness? Seeing none, thank you. Chair would now call up Frank Strigari with AEP Ohio. Welcome to committee, and you may begin when you're ready.
Chairman, welcome Vice Chair Reinecke, Ranking Member DeMora, and members of the Senate Public Utilities Committee. My name is Frank Stragari, and I am the Vice President of External Affairs for AEP Ohio. Thank you for allowing me to testify in opposition to substitute House Bill 173 today. I'm going to try to not repeat, I think, a lot of the same messages you're hearing from some of these other folks that have already testified, and try to make sure to hit the top points, and so bear with me as I do that. House Bill 173 is nothing new to the General Assembly. For the past 13 years, the legislation has been proposed in one form or another. Yet every single time during those past 13 years, the General Assembly has heard and rightfully declined to enact legislation that would allow for unregulated companies to, number one, pay for electricity consumed at one price, and then charge tenants a higher price for that same electricity consumed.
Although the proponents suggest otherwise, submetering companies in Ohio do not provide any unique value or services that are not currently offered by public utilities in Ohio. Don't just take that directly from me. You can obviously, I'll cite you a 2017 capital review article that said the following. Submetering companies do not add anything to the actual utility product being provided. They simply act as middlemen between the public utility company and the end-use consumer without altering the product. So what exactly is submetering? I think we all know that, but it's basically become big business, as the Ohio Supreme Court just recently said. Here's how the process works. A submetering company pays a landlord for the ability to provide the landlord's tenants with electricity. As the court noted in its case, that can range anywhere from $25,000 to $75,000 in a one-time payment. From there, either the submetering company or the landlord pays the electricity bill for all the electricity consumed by tenants at the wholesale commercial rate. And then the submetering company slash landlord charges the tenants at a higher price and puts the money in their pocket for the same electricity. Before April, legislation was arguably needed in Ohio on submetering. For the past 13 years, reasonable minds could debate what a submetering company's authority was under current Ohio law. In April, any uncertainty was put to bed once and for all. In April, as you've heard previously, the Ohio Supreme Court unanimously concluded that the Nationwide Energy Partners is in the business of supplying electricity to tenants, and as such, they are a public utility subject to the PUCO's jurisdiction. As the representative from Duke explained earlier, there's still a pending motion for reconsideration at the court, and once the court resolves and finalizes the case, that's when they send it down to the PUCO, and then the PUCO will go forward with their process on how to implement that. Yet here we are, a mere six weeks after the court's decision, and you are being asked to overturn the court's decision with far-reaching, sweeping legislation. For various reasons, you should decline that invitation to do so. To begin with, despite what you have heard in previous testimony prior to today, House Bill 173 would not only reverse the court's decision, but it would cause the quote-unquote big business of submetering to flourish in Ohio at the expense of ratepayers. How so, you may ask? Well, House Bill 173 would do the following. It would strip submetered customers of their existing statutory rights. that the Supreme Court just confirmed they all have. It would create a second set of rules just for submetering companies, and it would, contrary to what you were told last week, shift transmission and distribution costs onto non-submetered customers. Our folks internally did an analysis of this, just in the NEP properties that we are aware of. They currently have 35,000 customers who have been converted to 342 non-residential accounts. That would lead to approximately $8 million a year, and cost shifting that we have to then effectively charge other non-submetered customers. Not surprisingly, submetering in Ohio has led to many complaints. As you heard previously, the dispatch published an extensive article that explained the problems inherent in this practice. They noted in 2025 alone, 13 complaints were filed with the Attorney General's Office against one submetering company, and 555 complaints were filed with the Public Utilities Commission. In 2024, the plain dealer noted in the article that there was 316 cases that had been filed at either the Attorney General's office or the Public Utilities Commission between 2020 and 2024. So not only was there cases from 2020 and 2024 that were obviously totaled 316, they're increasing in the number of complaints because in 2025 alone there was more than that over the four-year period. Let me cite you some additional facts Over 60 of AEP Ohio residential customers receive their electric supply from a competitive source i they shop Anywhere between 30,000 to 50,000 customers are currently sub-metered in AEP Ohio's territory. If House Bill 173 were to pass, that number would significantly proliferate across the state. And those 30,000, 30 to 50,000 plus sub-metered customers, at least in AEP Ohio's territory, would no longer be able to shop for their generation supplier, which, as you all know, is a hallmark of Ohio's energy market. Some additional facts. Approximately 8% of AEP Ohio's residential customers are on PIP. In 2024, we examined what the potential impact would be on 92 specific customers at a particular central Ohio apartment complex if they were no longer on PIP. The results were pretty striking. Specifically, they would have went from having an average bill of approximately $47 a month to approximately $101 a month, 115% increase. Of those 92 customers, 17 were paying a PIP amount of only $10 a month. Those 17 customers would have faced an increase of nearly 1,000% by being taken off of PIP if they were submetered. Yet what would happen to those PIP customers if House Bill 173 was passed and lived in a submeter complex? Ohio law would now prohibit them from accessing PIP and raise their monthly bills significantly. In sum, House Bill 173 will take away statutory rights from sub-metered customers and codify electric bills for tens of thousands of sub-metered customers. Notwithstanding that, the most troubling aspect of all that I would suggest in House Bill 173 is the so-called standard service offer rate cap, which is really nothing more than a guaranteed profit that would be codified in law for sub-metering companies at the expense of tenants. But I do have good news for you. If the General Assembly would like to do something in the best interest of sub-metered customers, you can do one simple thing, allow the PUCO to do its job. The PUCO has all the authority it needs under current law to implement the Ohio Supreme Court's decision. Any contention to the contrary is nothing but hyperbole. At a time when affordability and rising electricity rates are on everyone's minds, we believe it makes very little sense to pass legislation that creates a new middleman in Ohio who pays for electricity at one price and then forces its ratepayers to pay for the electricity at a higher price, the same electricity at the higher price. As General Assemblies have done over the past 13 years, we would urge this committee to reject House Bill 173. I'm happy to answer any questions anyone may have.
Thank you for your testimony. Are there any questions for the witness? I'll start with Senator Brenner.
Thank you, Chair. Thank you for your testimony, Frank. What percentage of AEP's customers currently participate in competitive generation shopping today?
Mr. Chairman, Senator Brenner, as I noted earlier, about 60% of AEP Ohio's residential customers receive their electric supply from competitive sources.
So would AEP support if submetering customers chose competitive suppliers under legislation that would be drafted underneath this bill?
We support their ability to shop like every other residential, I'm sorry, Mr. Chairman, to Senator Brenner. We would support their ability to shop just like every other residential customer has who is not submetered.
We'll give you a pass. We know it's your first time. Thank you, sir. Thank you. Follow up? Follow up. Can you point to me any specific sections of the code established in billing standards fee limitations consumer protections disconnect procedures and rate regulations for sub companies that exist Mr Chairman Senator Brenner I not an expert when it comes to landlord law
in particular, so I don't have any particular sites for you today. I'm happy to get that information for you, though. And a last follow-up.
Thank you. Are there any other utility companies that were regulated based on a Supreme Court decision and not actual legislation?
Mr. Chairman, Senator Brunner, I'm not sure if I understand your question specifically. Could you ask that again?
Are there any other utility type of companies that were regulated based on a Supreme Court decision and not underlying legislation, giving authority to do that, such as submetering?
Mr. Chairman, Senator Brunner, The Supreme Court did not regulate Nationwide Energy Partners in their decision. They simply answered the legal question that was posed to them, is Nationwide Energy Partners a public utility as current law is defined? Last follow-up.
Follow-up. So then would it not be prudent for the General Assembly to follow the Supreme Court ruling and put in legislation to regulate the submetering companies in a way that puts in the consumer protections and everything else that is associated with a submetering company.
Mr. Chairman, Senator Brenner, if the General Assembly wishes to implement the court's decision as it was written, there's nothing that the General Assembly needs to do. The PUCO has the full authority to regulate them as a public utility.
Senator Blackshear.
Thank you, Mr. Chairman, and thank you so much for your testimony. Tony. My question is, how has the Supreme Court decision changed the landscape regarding submetering?
Mr. Chairman, Senator Blackshear, it hasn't changed anything yet because that's what I tried to highlight a little bit, and I think the individual from Duke did too, is that the court hasn't even disposed of the case yet. The court is currently in the process of hearing a motion for reconsideration that was filed by Nationwide Energy Partners. once they dispose or once they rule on that motion, they could reconsider it or they might not reconsider it. But once after they make their final ruling, they then send the order back to the PUCO who then has to then implement their order. So as of now, nothing has changed when it comes to the submetering industry because the court hasn't even technically disposed of the case. Follow-up.
Follow-up. Thank you, Mr. Chair. I guess my last question is, What rights are submetering customers giving up?
Mr. Chairman, Senator Blackshear, number one, I would suggest that the customers themselves are not giving anything up. But what the law would be giving them up if 173 was passed is it would be taking away, affirmatively taking away their rights that the Supreme Court just recognized that they have to programs like PIP, which there's great examples that I could share with you about the folks that had their bills raised significantly because of that. But they would no longer have the access to the PIP if they qualified for it. And most importantly, as you've probably heard from a couple of folks and even myself earlier, they would lose the ability to shop which everyone else in this state has the authority to do More follow Seeing no other questions thank you for your testimony Thank you Chair would now call Christy Ortiz with the Advocates for Basic Legal Equalities Housing and Community Economic Development
That is quite a title. Welcome to committee. You may begin when you're ready.
Thank you. Yeah, it's quite a tiny one you say my title as well as the organization. It's a lot. So I thank you for the opportunity to provide testimony regarding House Bill 173-3. I'm Christy Ortiz. As we said, advocates for basic legal equality. I'm the managing attorney for our housing and community economic development. ABLE is a nonprofit law firm that offers civil legal services, including housing and tenant advocacy, to 32 counties of the 88 counties in western Ohio. So we urge the Senate to reject the bill at its current status, though we appreciate the bill's attempt to provide needs to provide, sorry, attempt to address the needs of Ohio's tenants who receive sub-metered electricity. It creates a second class of protections for all electricity consumers who receive sub-metered services because they don't receive the same protections as consumers who receive directly metered electric service. It also leaves wholly unprotected consumers of water and other utility services. Whether it's electricity, gas, or water, consumers of each service need uniform protection and transparent billing, which they're not receiving currently. The proposed bill would offer protections only to residents receiving sub-meter electricity who live at properties with 50 or more units. This excludes state protections from residents residing in smaller and rural communities where the number of units per property is less than 50. So another concern is the growing use of utility billing practices called ratio utility billing systems, or RUBS. So you can see this in National Consumer Law Center. It's an introduction to ratio utility billing system, and I cited that in my written testimony. So with RUBS, tenants who live in buildings or manufacture home parks with one meter, a master meter, are charged a proportionate rate based on the OPEG formula. RUBS uses factors like the number of rooms or units per building rather than the actual consumption. So consumers' bills using RUBS include added administrative fees that benefits the servicer using RUBS and landlords, while worsening the housing affordability crisis for tenants. The RUBS system also allows landlords to pass on the cost of leaks and common area usage without transparency. Tenants have no control over their individual bills and no agency is available to help. landlord should be prohibited from using rubs as a minimum as its use should be regulated. So I'm going to give a personal example. I'm representing a tenant union currently in Dayton. They are under the rubs system, and there is currently a facade issue. And so during the winter months, the facade or the entire front of the building, all the way down from the line, it was 11 floors, was exposed. And so because of that, it took more energy to heat the building. Also, there was extensive leaks throughout the entire building. And so because of that, everybody's utility bill under the RUB system doubled. So their usual bill was $40. The next month was $125. There was no explanation, and they were not provided the master bill. And so the entire building is carrying the cost of building-wide issues, which should be the responsibility of the landlord. So PUCO does not currently exercise its oversight authority over RUBS and the landlords who use this service. The Ohio Supreme Court recently created an opportunity to address this gap for all Ohio's utility consumers who rent their homes or lots. By not ensuring the same level of oversight in all sub-metered and master-metered utility services, the bill leaves open a loophole that will impact a growing number of tenants. So ABLE respectfully requests this committee to reject the bill or pass a version with significant changes. So the changes include extending PUCA protection to all residents, whether they are sub-metered or master-metered, extending protections to each type of utility consumed by Ohio tenants rather than just electricity. It should also include water and gas. And then adding an amendment to ensure PUCO's jurisdiction includes tenants and landlords whose utility bills are using rub systems or just prohibiting the use of rubs altogether. So these changes would ensure renters and residents of manufactured homes who rent their lot are afforded the same protections available to single-family homeowners. and thank you for the opportunity to provide testimony on the importance of protections for tenants, including those whose access to utilities is controlled by a landlord who uses rubs. I am open for any questions.
Thank you for your testimony. Are there any questions?
I have a question, a hypothetical for you. When we're talking about the inability for tenants to shop, Do you believe that if I'm trying to buy 1,000 kilowatts a month versus a sub-meter that says I'm buying 100,000 kilowatts a month, that the 100,000 could get a lower rate than, say, the standard service offer from a utility? So you're saying because it's a larger property, in essence, we're paying less? Or even multiple properties that I pull all together and say, give me a bid on all of this electric. So you're saying whether – I'm sorry. So the question is, do you think they can get a better rate than typically the standard service offer? So generally if you buy in bulk, everybody knows if you shop in Sam's Club, you're probably going to get cheaper, right? So I would assume that if you're buying larger numbers that that's possible. Practically speaking, I don't know the number. I don't know for sure. Okay. Then my next question would be, if we took a look at something and said, all right, here's the standard service offer, but you have to be less than that, and then the spread is the spread. We couldn't get that rate because we're a small individual buyer. Is that something you think would be beneficial to the people you represent? Absolutely Anything that would make the utility more affordable of course is better for the tenant because affordability is an issue Okay thank you Any other questions Seeing none thank you for your testimony Chair now calls up Nolan Is it Rushling Sorry Welcome to committee You may begin when you ready. Thank you, Chair. It's a German name. It's a use to that my whole life. So appreciate it,
the effort. Chair Wilkin, Vice Chair Reinecke, Ranking Member DeMora, and members of the committee, My name is Nolan Rutschling, Managing Director of Energy Policy for the Ohio Environmental Council Action Fund. Thank you for the opportunity to provide opponent testimony on HB 173. The OEC Action Fund supports clean, affordable, and reliable energy for all Ohioans. We also support strong consumer protections and meaningful oversight of entities that provide utility services to families. Sometimes we get questions on why we are active on submetering. What we would say to that is if customers can't pay their bills, it doesn't matter where the electricity is generated, where the source of electricity is. We oppose HB 173 because it would limit the opportunity for stronger consumer protections and accountability that emerged from the Ohio Supreme Court's recent decision. In April, the court concluded that any nationwide energy partners' submetering operations are subject to PUCO regulation and oversight, and remanded the matter to the Commission for further action. The decision opened the door to greater oversight of submetered utility providers and the potential for stronger consumer protections and accountability. H.B. 173 moves Ohio in the opposite direction. The bill has been described as a consumer protection measure. we agree that consumer protection should exist. The question before this committee is whether Ohio consumers will receive the full protections available under Ohio utility law or a narrower set of protections created specifically for this industry. Many Ohioans, as you've heard from numerous folks before me, living in sub-meter properties have long been denied the same consumer protections available to traditional utility customers. Rather than extending those protections, HP 173 creates a separate regulatory framework for sub-metered utility providers and their customers. Ohio consumers should not receive fewer rights simply because they live in housing that was set up through a behind-the-meter provider rather than connecting directly to the utility. If an entity is selling electricity to Ohio families, those families deserve the same consumer protections available to every other Ohio utility customer Now is the time to ensure consumers are protected Don take us backwards For these reasons we respectfully urge the committee to reject HB 173 Thank you for the opportunity to testify. I'm happy to answer any questions.
Thank you for your testimony. Any questions for the witness? Seeing none, thank you very much. Thank you. Looks like our next and final witness is Elaine Miracle with the St. Michael St. Vincent DePaul Society Conference. Is Elaine here? All right. Seeing it does not appear that Elaine is here, we will convert that to written testimony only. There is other written testimony on your iPads. If you take a peek, and at this point, having no further business before the committee, we will stand in recess at the call of the chair. The Senate Public Utility Committee will come back to order. The chair recognizes Vice Chair Reineke for a motion.
Thank you, Mr. Chair. I move to accept substitute House Bill 1-136-3230-6. The amendment is in order and I will go through and explain the bill.
Thank you, Vice Chair.
So the dash six version, all water provisions have been removed. We realize there are some intricate details when it comes to water. We plan to regulate water submetered utilities and lame duck. Utilities are not obligated to sell equipment to submetering companies. However, they will have the option to sell. If they do not wish to sell, they will have to remove the equipment in a timely manner. This allows submetering companies to bill tenants in common areas rather than landlords, as in the previous version. It requires submetering companies to bill at 3% lower than the standard service offer to individually metered tenants. Common areas in submitted utilities will bill tenants at a flat rate that they purchase the electric with no admin fees or additional fees. If they choose to put in EV charging stations the charging stations are going to be on an as basis and cannot be passed on to tenants in the form of common area charges Conversions will be allowed for current buildings if within the previous calendar year of the conversion substantial improvements were made Substantial improvements are defined as 50 or more in upgrades as determined by the most recent valuation of the dwelling as determined by the county auditor There's also additional penalties for violations in submetering billing that are located or violation sections of the revised code.
What is the pleasure of the committee?
I move to forward this to rules and reference.
There's been a motion. Will the clerk take the roll? Chair Wilkin? Yes.
Vice Chair Reineke?
Yes.
Senator Brenner?
Yes.
Senator Chavez?
Yes.
Senator Gabaron?
Yes.
Senator Manchester?
Yes.
Senator Romanchuk?
Yes.
Senator Wilson? Yes.
Ranking Member DeMora? No.
Senator Blackshear? No.
Senator Smith? Yes.
Excuse me. The committee will stand at ease.
We had the sub-bill. It was explained. Is the sub-bill a motion to reconsider? Is there any objections or a motion to reconsider by the vice chair?
I move to favorably reconsider.
Motion to reconsider? Is there any objections? Hearing none. What is the pleasure to adopting the sub bill? What is the pleasure to adopting the sub bill? Are there any objections? Hearing none, the sub bill will become the working document. What is the pleasure of the committee? I move to favorably report this to rules and reference.
Clerk will take the roll.
Chair Wilkin? Yes.
Vice Chair Reineke?
Yes.
Senator Brenner?
Yes.
Senator Chavez?
Yes.
Senator Gaborone?
Yes.
Senator Manchester?
Yes.
Senator Romanchuk?
Yes.
Senator Wilson?
Yes.
Ranking Member DeMoron?
Still no.
Senator Blackshear?
No.
Senator Smith?
Yes. With a vote of nine yays and two nays, the sub-bill has received the appropriate constitutional votes and will be referred back to rules and reference. With no other business before the committee, we will stand adjourned.