OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
S.B. 143 Bill Analysis
135th General Assembly
Click here for S.B. 143’s Fiscal Note
Version: As Introduced
Primary Sponsor: Sen. Romanchuk
Effective date:
Reid J. Fleeson, Attorney
SUMMARY
Requires an electric distribution utility (EDU) to file a rate case application regarding
distribution service at least every five years beginning not later than five years after the
effective date of the bill.
Requires an EDU’s standard service offer (SSO) to be established only as a market-rate
offer (MRO) by eliminating the electric security plan (ESP) option and making the MRO
mandatory.
Modifies the MRO process.
Prohibits electric utilities (EUs) from providing any competitive retail electric service in
Ohio, other than through an SSO, if that service was deemed competitive or otherwise
legally classified as competitive prior to the bill’s effective date.
Eliminates the corporate separation requirements for EUs that are in the business of
supplying both a noncompetitive and a competitive retail electric service in Ohio, since
the bill prohibits EUs from providing competitive retail service designated as such prior
to the bill’s effective date.
Modifies the corporate separation requirements that remain applicable to EUs that are
in the business of supplying a noncompetitive retail electric service and supplying a
product or service other than retail electric service regarding unfair competitive
advantage and abuse of market power.
Repeals the prohibition against an EDU selling or transferring any generating asset
without PUCO approval.
Requires PUCO to review each MRO application to ensure that the application and
resulting MRO does not contain any rate, price, term, condition, or provision that would
have an adverse effect on large-scale governmental aggregation in Ohio.
September 7, 2023
Office of Research and Drafting LSC Legislative Budget Office
Repeals provisions in sections amended by the bill that no longer serve a purpose or
have no applicability.
DETAILED ANALYSIS
Rate case application every five years
The bill requires an electric distribution utility (EDU) to file a rate case application
regarding distribution service at least every five years beginning not later than five years after
the effective date of the bill.1
Changes affecting the standard service offer (SSO)
Elimination of electric security plans (ESPs)
The bill requires an EDU’s standard service offer (SSO) to be established only as a
market-rate offer (MRO) by eliminating the electric security plan (ESP) option and making the
MRO mandatory.2 An SSO is an offer of all the competitive retail electric services that are
necessary to maintain essential electric service that an EDU is required to provide to its
customers (1) who did not shop for their own electric generation supplier or (2) whose supplier
defaulted and the customer did not obtain a new supplier.3 Under current law, an EDU may
establish its SSO as an ESP or an MRO.
The bill requires that an ESP that was approved prior to the bill’s effective date must
continue to serve as an EDU’s SSO until an MRO is approved.4 The bill provides that if a
customer does not receive retail electric generation service from a competitive generation
supplier and the EDU’s ESP is still in effect, the customer will default, after reasonable notice, to
that ESP until the customer chooses an alternative supplier or until the EDU’s MRO is
authorized.5 The bill prohibits an ESP that is approved after January 1, 2023, from extending
beyond June 1, 2027.6
Since the bill eliminates ESPs, the bill also repeals or amends all other provisions of the
Revised Code addressing or affecting ESPs.7
1 R.C. 4909.181. The bill does not define “electric distribution utility” for purposes of this rate case
application requirement. The term likely would be construed to mean such an entity as defined under
R.C. 4928.01, but that conclusion is not certain.
2 R.C. 4928.141(A)(1) and 4928.142(A); R.C. 4928.143, repealed.
3 R.C. 4928.14 and 4928.141.
4 R.C. 4928.141(A)(1) and (2).
5 R.C. 4928.14(C).
6 R.C. 4928.141(A)(2).
7 R.C. 4928.14, 4928.141, 4928.142, 4928.144, 4928.148, 4928.17, 4928.20, 4928.23, 4928.231,
4928.232, and 4928.542; R.C. 4928.143, repealed.
P a g e |2 S.B. 143
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
Changes affecting the market-rate offer
The bill generally retains the MRO process under current law providing for (1) the EDU
to file an application with the Public Utilities Commission (PUCO) prior to initiating a
competitive bidding process for the EDU’s MRO, (2) the MRO to be competitively bid in
accordance with certain requirements under continuing law, (3) PUCO to determine within 90
days of the application’s filing date whether the EDU and its MRO meet all requirements,
(4) the EDU to initiate its competitive bidding process if PUCO determines all requirements are
met, and (5) PUCO to select the EDU’s MRO from the least-cost bid winner or winners.8 The also
bill makes (4) above mandatory instead of discretionary as provided under current law (MRO
competitive bidding must be initiated – instead of may be initiated – if PUCO determines all
requirements are met).9
The bill, however, eliminates the following provisions from the MRO requirements
under current law:
The requirement that an EDU withdraw its application, as an alternative to timely
remedying a deficiency, if PUCO finds that the MRO does not meet MRO requirements.
The limitation that an EDU cannot initiate the competitive bidding process for at least
150 days after an application’s filing if (1) PUCO finds that the MRO does not meet MRO
requirements, (2) the EDU remedies the MRO deficiency, (3) PUCO determines the
remedied application meets the MRO requirements, and (4) the MRO was filed
simultaneously with an ESP application.10
The blended price requirements for EDUs that directly owned operating generating
facilities that were used and useful as of July 31, 2008.11
The restriction that an EDU may not ever file or be required to file an ESP application if
its initial MRO application is approved.12
Prohibition against providing competitive service outside of an
SSO
The bill prohibits electric utilities (EUs) from providing any competitive retail electric
service in Ohio, other than through an SSO, if that service was deemed competitive or
otherwise legally classified as competitive prior to the bill’s effective date. The bill explicitly
requires that EUs continue to supply SSOs to consumers in Ohio.13 “Competitive retail electric
8 R.C. 4928.142(A) to (C).
9 R.C. 4928.142(B).
10 R.C. 4928.142(B)(3).
11 R.C. 4928.142(D) and (E).
12 R.C. 4928.142(F).
13 R.C. 4928.041.
P a g e |3 S.B. 143
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
service” is a component of retail electric service that is deemed competitive under Ohio
statutory law or a PUCO order. All retail electric generation, aggregation, power marketing, and
power brokerage services supplied to consumers within the certified territory of an EU are
competitive.14
Definition of an electric utility
The bill changes the definition of EU to mean “an electric light company that has a
certified territory and is engaged on a for-profit basis in the business of supplying at least a
noncompetitive retail electric service in this state.” Current law, however, defines an EU as “an
electric light company that has a certified territory and is engaged on a for-profit basis either in
the business of supplying a noncompetitive retail electric service in this state or in the business
of supplying both a noncompetitive and a competitive retail electric service in this state.” An EU
is also defined under continuing law to exclude a municipal electric utility and a billing and
collection agent.15
Applicability of the prohibition to electric distribution utilities
The bill’s prohibition against providing competitive retail electric service outside of an
SSO extends to EDUs because, under continuing law, an EDU is an EU that supplies at least retail
electric distribution service.16
Future designation of competitive retail electric services
The effect of limiting the prohibition to services deemed or classified as competitive
prior to the bill’s effective date is that if a different service is deemed or classified as
competitive in the future, an EU could provide that service outside of an SSO. PUCO has
continuing authority to declare the following additional services as competitive: retail ancillary,
metering, or billing and collection service.17
Changes to corporate separation requirements
Requirements not applicable to certain electric utilities
The bill eliminates the corporate separation requirements for certain EUs that are in the
business in Ohio of supplying a noncompetitive and a competitive retail electric service. If an EU
is in the business of supplying noncompetitive retail electric service and supplying a product or
service other than retail electric service, the requirements would still apply.
Under current law, an EU can be engaged in the business of supplying both a
noncompetitive retail electric service and a competitive retail electric service, so long as a
corporate separation plan meeting certain requirements of utility law are met. Because the bill
14 R.C. 4928.01(A)(4) and (B); R.C. 4928.03, not in the bill
15 R.C. 4928.01(A)(11).
16 R.C. 4928.01(A)(6).
17 R.C. 4928.041(A); R.C. 4928.04(A), not in the bill.
P a g e |4 S.B. 143
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
prohibits an EU from providing a competitive retail electric service other than through an SSO,
eliminating the corporate separation requirement means that the EU generally cannot provide
both a noncompetitive retail electric service and a competitive retail electric service even by
following a corporate separation plan. However, as mentioned above (see “Future
designation of competitive retail electric services” above), the prohibition on EU’s
providing competitive retail electric service applies only to retail electric service deemed
competitive prior to the effective date of the bill.18
Unfair competitive advantages and the abuse of market power
The bill makes a change to the corporate separation requirements that would still apply
to EUs supplying a noncompetitive retail electric service and a product or service other than
retail electric service. The bill eliminates the requirement that the EU’s corporate separation
plan satisfy the public interest in “preventing unfair competitive advantage.” Instead, the bill
just retains the requirement that the plan satisfy the public interest in “preventing the abuse of
market power.” With respect to PUCO rules establishing limitations on affiliate practices solely
for the purpose of maintaining a separation of the affiliate’s business from the EU’s business to
prevent unfair competitive advantage, the bill replaces “unfair competitive advantage” with
“abuse of market power.” Under continuing law, “market power” means the ability to impose
on customers a sustained price for a product or service above the price that would prevail in a
competitive market.19
Sale or transfer of generation assets
The bill repeals a provision from the corporate separation requirements that prohibits
an EDU from selling or transferring any generating asset it wholly or partly owns without prior
PUCO approval. Additionally, the prohibition against PUCO approving part of an EU’s transition
plan if the transition plan would constitute an abandonment of service is no longer subject to
the requirement that PUCO approve the selling or transferring of generation assets. 20
Large-scale governmental aggregation
The bill amends Ohio law governing governmental aggregation to require PUCO to
review each MRO application filed by an EDU to ensure that the application and resulting MRO
does not contain any rate, price, term, condition, or provision that would have an adverse
effect on large-scale governmental aggregation in Ohio. The bill also requires PUCO to adopt
rules and issue orders in proceedings under the MRO and SSO requirements to encourage and
promote large-scale governmental aggregation in Ohio. The requirement that PUCO consider
the effect of large-scale governmental aggregation of certain nonbypassable generation
charges in the context of an ESP when adopting large-scale governmental aggregation rules is
repealed. Governmental aggregation refers to a municipal corporation, township, or county
18 R.C. 4928.01(A)(11), 4928.041, and 4928.17(A).
19 R.C. 4928.01(A)(18) and 4928.17(A)(2) and (B).
20 R.C. 4928.17(E) and 4928.34(B).
P a g e |5 S.B. 143
As Introduced
Office of Research and Drafting LSC Legislative Budget Office
that aggregates retail electric loads in their jurisdiction in order to enter into an agreement for
the sale or purchase of electricity for those loads.21
Governmental aggregation ESP standby service
The bill repeals a provision which permitted a legislative authority that formed or is
forming governmental aggregation to elect not to receive standby service under an ESP, subject
to certain requirements.22
Repeal of obsolete provisions
The bill repeals, only in Revised Code sections amended by the bill, provisions
referencing the starting date of competitive retail service, as they no longer serve a purpose.
The bill also repeals various other provisions of the utility law that no longer have applicability
or that serve no purpose.23
HISTORY
Action Date
Introduced 08-17-23
ANSB0143IN-135/ks
21 R.C. 4928.20(J).
22 R.C. 4928.20(J), repealed.
23 R.C. 4928.05, 4928.141, 4928.17(A) and (E), and 4928.20(A).
P a g e |6 S.B. 143
As Introduced
Statutes affected: As Introduced: 4928.01, 4928.05, 4928.14, 4928.141, 4928.142, 4928.144, 4928.148, 4928.17, 4928.20, 4928.23, 4928.231, 4928.232, 4928.34, 4928.542, 4928.143