Before
The Ohio Senate Energy and Public Utilities Committee
Interested Party Testimony on Senate Bill 307
By
Michael Haugh
Analytical Department Director – Competitive Services
Office of the Ohio Consumers’ Counsel
May 17, 2022
Hello Chair McColley, Vice-Chair Schuring, Ranking Member Williams, and Committee members. I hope you and your colleagues are well. Consumers’ Counsel Bruce Weston and I thank you and the bill sponsor (Senator Rulli) for this opportunity to testify on Senate Bill 307. I am testifying, on behalf of the Office of the Ohio Consumers’ Counsel (OCC), for Ohio residential utility consumers. We look forward to our upcoming meeting with the bill sponsor.
In general, you will find the OCC testifying for competitive electric markets and against subsidies for utilities that tend to subvert or even prevent Ohio consumers from receiving the benefits of the free market: lower electric prices and greater innovation. Ohio started on a path to a fully competitive marketplace for electricity in 1999. Ohio has unfortunately taken some steps backwards instead of towards the deregulated markets that it had endorsed.
Here we are talking about something similar: Subsidizing utilities – that means making your constituents pay extra – so that the utilities can compete against private businesses in the competitive market for electric vehicle charging. OCC generally opposes interjecting monopoly utilities into competitive markets. We especially oppose monopoly utility involvement when it comes with government-ordered subsidies and other preferences including charges to the utility’s captive customers.
OCC is testifying today as an interested party. But OCC will be an opponent of SB307 if lines 510 to 621 remain in the bill with charges (subsidies) for monopoly electric utilities at consumer expense. Specifically, LSC’s Fiscal Note on SB307 states “the bill will create a charge on [consumers’] future electric bills.” SB307 allows utilities, as part of their electric security plans (ESPs), to develop programs that promote, prepare and support vehicle electrification. The bill references “minimizing overall program costs” (line 546). But history informs us that the utilities and the PUCO can be expected to lack a strict definition for “minimizing” charges to consumers.
As an example of the subsidy culture of electric security plans, the utilities and the PUCO have used electric security plans, under the bad ratemaking of the 2008 energy law, to charge consumers for the infamous FirstEnergy and Dayton Power & Light distribution modernization riders. Thankfully the Supreme Court ended that charge but not before FirstEnergy consumers were charged nearly a half-billion dollars and DP&L consumers were charged over 200 million dollars.
Moreover, AEP is already known for seeking electric vehicle charging subsidies. It currently has a PUCO-approved subsidy for EV charging, at consumer expense. AEP is also known for seeking other subsidies from its consumers related to electric security plans, such as its receipt of OVEC coal plant subsidies courtesy of the PUCO. AEP (plus Duke and DP&L) are currently receiving massive consumer subsidies under House Bill 6 for the OVEC Clifty Creek and Kyger Creek coal plants. Statewide, Ohioans have been charged over a quarter-billion dollars to date for House Bill 6 coal subsidies to AEP, DP&L (now AES) and Duke.
Attached is OCC’s Subsidy Scorecard, giving a history of some but not all subsidies for electric utilities. Given this history, the legislature should be skeptical about the utilities and the PUCO “minimizing” electric vehicle subsidy charges to Ohio consumers under SB307.
EV charging should be a competitive service. Just as in the early 1900s, when privately-owned gas stations started popping up to serve motorists, the competitive market will meet the needs of EV owners – without forcing Ohio utility customers to subsidize it. This bill should leave electric vehicle charging to American and Ohio entrepreneurs. This line of business should not be opened to monopoly utilities who issue monthly electric bills to their captive Ohio customers. What’s more, the utilities have unregulated side businesses that can and do compete in competitive markets like this – but without Ohioans having to subsidize them. If EV charging is a market the utility affiliates wish to get involved in, then it should be done like any other competitive business. However, strict corporate separation requirements would be needed given the affiliation with utilities.
As far as the monopoly utility business goes, the utility role regarding EV charging should be in making prudent investment in their distribution systems where needed (if “used and useful” for consumers under R.C. 4909.15). Moreover, the cost of any needed utility distribution upgrade should be paid for by the developer involved with EV charging businesses, not subsidized by utility consumers.
The LSC Fiscal Note does not provide any cost estimates for the utility subsidy that would result from SB307. AEP currently charges its million consumers for a “Smart City Rider,” under a pilot program that the PUCO approved. Under SB307 all Ohio electric utilities would be able to charge consumers to build and operate EV charging stations. The consumer cost of AEP’s current small-scale EV pilot program is $10 million. This charge can only be expected to increase significantly if all four electric utilities are allowed to install and operate EV charging stations through this bill.
Please note that the federal government is making substantial funds available to local governments for electric vehicle charging stations. Under the federal bipartisan infrastructure bill, $5 billion was earmarked for developing EV charging stations. Ohio’s share of that is $140 million over five years. Attached is a news story. This funding source is another reason to avoid allowing monopoly utilities to charge consumers for their venture into what should be a competitive business.
Accordingly, lines 510-621 should be deleted to promote a competitive electric vehicle charging market for Ohioans and to protect utility consumers from subsidy charges for FirstEnergy, AEP, Duke, and DP&L. As stated, OCC will be an opponent of the bill if these lines are not deleted. Further, the bill should have language prohibiting utilities from charging their consumers for EV charging.
Thank you for your consideration.