The History of Energy Deregulation in Ohio

Natural Gas Deregulation

In 1997, the Public Utilities Commission of Ohio (PUCO) began unbundling natural gas services which separated natural gas delivery charges from the cost of the actual gas itself. This allowed for customers to purchase their gas from an actual supplier. Since this time, the market competition has grown, which allows consumers the choice to select natural gas rates and plans that fit their specific commercial or residential needs.

Electricity Deregulation

In July 1999, The Ohio General Assembly passed Senate Bill 3, which restructured the electricity market to allow consumer choice in selecting an electricity supplier. At that time, an outline of the deregulation process was established, which allowed for the market to determine the cost of energy using supplier competition. Prior to deregulation, the cost of electricity was based on a process that was dependent on the power companies cost to produce electricity, which in turn resulted in a rate cap. Deregulation removed the rate cap and allowed for market competition.

In January 2001, Senate Bill 3 took effect and energy consumers were given direct access to different competitive energy suppliers. To allow the market to grow, the law required a 5% reduction in residential rates, along with a rate freeze until 2005. According to the PUCO, at the end of this 5-year period, “there was a growing concern that an immediate shift to market-based rates in 2006 would not be in the best interest of customers.” To ease this process for consumers, the PUCO, along with the utility companies, developed “rate stabilization plans”.

These plans, which were set to end at the close of 2008, provided reliable rates for consumers. In 2008, Senate Bill 221 passed, which required the PUCO to approve all rates starting in 2009. Since 2009, the competitive market continues to grow. Now consumers have more choice in selecting rates and plans that meet their specific needs for their home or business.