When did Noah build the ark? Before the rain.
There is a great storm forming on Ohio’s horizon. On January 1, 2009, the period of rate stabilization that has kept Ohio’s electric prices insulated from the rate shocks seen throughout the country will end. Today, all Ohio users, regulators, generators, and marketers of electricity need to come together and find a way to keep the state afloat when we reach this impending crisis.
Oftentimes, the dialogue is limited to proceeding to open market, re-entering regulation, or settling on a hybrid of the two. As Sam Randazzo, head counsel for the Industrial Energy Users of Ohio (IEU) likes to point out, once stakeholders define their goals, both regulation and open markets can be used as a means to achieve them. Really, the question that needs to be asked is, “What do you want and what are you willing to do to get it?” Once that question is answered, we can then begin worrying about what path will best achieve those goals and, perhaps most importantly, how can we ensure effective and rational execution of the agreed upon policy.
What will this post-2008 world look like? Based on the experiences of the numerous states that have taken the plunge into open markets, we are in store for far higher generation prices. This coupled with increasing transmission and delivery costs could dilute Ohio’s regional, national, and international competitive advantage for its already embattled energy intensive industrial base.
We, as energy users, must stress to the Ohio Legislature the importance of the having this issue at the forefront of their agenda. MICA companies are engaging the Legislature via their membership in IEU, the leading voice on energy policy for Ohio business. Within the coming months, the Industrial Energy Users will be finalizing what goals we believe to be most important to Ohio commercial and industrial customers. From there, energy stakeholders can collectively decide which vessel will best reach our goals.
Ohio can’t wait until the storm hits to take action. By then, our state’s economy, already awash in a sea of rising energy costs, could drown.
Matt Brakey
Vice President
Brakey Consulting, Inc.
