Ohio consumers have saved an average of $3 billion per year, or $15 billion over five years in electricity costs under deregulation, showing enough benefit to keep it, a new study released Thursday shows.

An executive summary of the study, sponsored by NOPEC, the Northeast Ohio Public Energy Council, was released Thursday afternoon. NOPEC is the state’s largest energy aggregation or consortium of more than 200 governments, including some communities in Northern Summit County and Portage County.

NOPEC is in favor of continued deregulation of the industry, said Chuck Keiper, executive director. Officials of several electric utilities, including Akron-based FirstEnergy Corp, parent of Ohio Edison, have said they favor re-regulation of the industry.

Two weeks ago, FirstEnergy said it was undertaking a “strategic review” of its competitive generation business that could lead to selling off as many as 13 power plants, including its three nuclear plants, where nearly 3,000 people work.

FirstEnergy’s CEO and president Charles Jones said the utility intended to act quickly and become a fully regulated electric utility again after operating under the state’s 1999 electric deregulation initiative.

But the study, “Electricity Customer Choice in Ohio: How competition has outperformed traditional monopoly regulation,” prepared by academics at Cleveland State University and Ohio State University, concludes that consumers are projected to continue to save another $15 billion in the next five years under deregulation.

A strategy to re-regulate “Would cost Ohio’s ratepayers significantly,” the study said.

The regulated portion of electricity, including distribution transmission and various riders have been “trending upwards at the same time that competition has been pushing the generation portion of the costs down,” the study said. “As a result, the overall cost of electricity has not fully reflected the savings achieved through deregulation.”

Re-regulating the generation portion of electricity will not reverse the rising costs, the study concluded. “This only makes the argument for deregulation more compelling, since deregulation has been most responsible for the relatively low cost of electricity in Ohio.”

Keiper said NOPEC wanted to release the executive summary of the study immediately to allow lawmakers time to consider it before January. On Friday, Republican leadership in the Ohio House of Representatives will be meeting with representatives of FirstEnergy, AEP and other utilities and lobbyists, a NOPEC official confirmed.

FirstEnergy released this statement: “There’s more to today’s low electric prices than competition. An abundant supply of natural gas has driven prices to record lows, and is putting pressure on other types of power plants that serve Ohio customers. More plants could potentially close, putting thousands of jobs at risk, and leaving Ohio with a single fuel source for producing electricity.”

Resisting higher costs

Bruce Weston, the Ohio Consumers’ Counsel, the state’s residential utility advocate, released the following statement: “Ohioans should be seeing on their monthly electric bills the low prices in the competitive energy market. Utility efforts to charge consumers above the market price for electricity should be resisted by policymakers.”

Todd Snitchler, spokesman for the competitors’ group Alliance for Energy Choice, said the study reflected what they have been saying: “competition has worked. Ratepayers are saving money and this has been a good outcome for the state of Ohio.”

“At the end of the day, when you look at it, we need to be finishing the job on deregulation rather than heading back to 1960s-era regulation,” said Snitchler, a former Public Utilities Commission of Ohio chairman from Lake Township. “Companies need to either adapt and change or get out of the portions of the business they no longer want to participate in,” not try to re-regulate the industry, he said.

Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com. Follow her @blinfisherABJ  on Twitter or http://www.facebook.com/BettyLinFisherABJ and see all her stories at http://www.ohio.com/betty

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