Q: Ohio's electric utility industry began its restructuring on January 1, 2001, with the start of a "market development period." What's the status of Ohio's competitive market?

A: Ohio's retail competitive electricity market is opening slowly, principally because of strains within the wholesale electric market and caution created by regional and national events. Volatile wholesale electricity prices, greater risks for suppliers and ongoing reports of continuing problems in California's electric markets are slowing Ohio's developing retail market. While over 40 suppliers have been certified by the Public Utilities Commission of Ohio (PUCO) to provide electric generation services, less than a dozen are actively marketing to business consumers.

In passing legislation, Ohio's legislators wisely included a "market development period" to give a competitive market time to be nurtured and developed. What happens during our summer months, traditionally times of peak usage, will also impact the market's development. While many predictions say that Ohio has sufficient capacity (and even some small excess), high wholesale market prices will translate into few or no competitive retail prices as suppliers struggle to meet rising costs and live with narrowing margins.

Q: What's the possibility of California events happening in Ohio?

A: While it's not impossible, the factors contributing to the California energy crisis are somewhat different in Ohio. Ohio's legislation has structured the Ohio market differently, most significantly, by including a five-year "market development" period. Ohio has been adding generating capacity for some time now, and the Power Siting Board has a number of applications for the building of additional generating sites. So Ohio is in a different place than California with respect to power supply.

Our biggest problem area has to do with the movement of power from one place to another. The constraints on our existing electricity transmission system are considerable and have been evident in power supply problems in Ohio (and the Midwest) in prior years. The Federal Energy Regulatory Commission (FERC), the regulatory body with authority to improve the reliability of the transmission system, has dragged its feet in making much-needed reforms and so our delivery problems still exist. We can have a plentiful amount of generating capacity in Ohio, but without a reliable transmission system to get that power from place to place, we may still experience shortages during peak times. The FERC needs to get off dead center and act.

Have a question to ask?