Before electricity deregulation in Ohio, investor-owned utilities accounted for more than 90% of electric sales in the state. These utilities sold bundled services as they operated generation, transmission and distribution, controlling the bulk of how energy was generated in Ohio.
The big four energy companies dominated, with AEP Ohio, Dayton Power & Light, Duke Energy, and FirstEnergy setting their own prices. The only other option was the Public Utilities Commission of Ohio (PUCO) and even still, those consumers didn’t have much selection in their electric service.
In 1999, the Ohio electricity industry began a restructure as the Ohio Electric Restructuring Act was passed. With other states also revolutionising their energy markets, Ohio chose to freeze their electricity rates by 5% from 2001 to 2005. Now, customers should decide who to buy their energy from.
Unfortunately, the first few years of energy deregulation in Ohio didn’t go to plan, as many customers were hesitant about making the switch. There wasn’t much of a price difference and there weren’t many options available to customers. In the areas where suppliers were less abundant, customers were limited to choosing community aggregation or more frequently incumbent utility.
It was a concerting time, as even with a rise in customers switching to new suppliers, there was low market activity, with a stop to the freeze being labelled as a bad idea. Later on, rates were negotiated across all utilities in a bid to try and see an increase in market levels.
Fast forward to current times and Ohio has lower prices, more variants and improved reliability for all customers. As of 2014, 59% of customers in Ohio had swapped suppliers thanks to competition lowering prices.
Taking a place at statistics from October 2021 and we can see that the current commercial electricity rates for Ohio are 16% lower than the national average at 9.69 ¢/kWh. On the other hand, residential electricity rates are 5% lower than the national average at 13.12 ¢/kWh.
Energy deregulation often leads to a higher percentage of renewable energy being used across the state. More suppliers will entice customers with deals for green energy, which then translates to the state using more energy that is greener.
In Ohio, almost all of the natural gas is produced from the Utica Shale and it is more 30 times higher in 2020 than in 2010. Ohio is also the eighth-largest ethanol-producing state in the United States, with seven ethanol plants based in the state.
For electricity, Ohio ranked as the fourth-largest electricity consumer in the nation, placing in the top 10 states in electricity net generation. But how green efficient is Ohio? Well, if we take a look at the electricity fuel mix for Ohio, we can see that natural gas accounts for almost half of the fuel mix, with coal at just under 40%.
- 43.3% natural gas.
- 39.6% coal and petroleum coke.
- 14.3% nuclear.
- 1.7% wind.
- 0.6% biomass.
- 0.3% hydroelectric.
- 0.1% solar.
- 0.1% petroleum.