How will deregulation affect me?
Right now, all Ohio cooperatives have taken a "wait, watch and learn" approach. HWE welcomes this industry change, and we've been telling our members about deregulation for the last several years. But we realize that few people still really understand what the new law means.
The Governor of the State of Ohio signed an electric deregulation bill that allowed some customers to begin shopping for electric power on January 1, 2001. The bill "unbundled" the Investor Owned Utilities (IOUs), such as Toledo Edison and American Electric Power. Under the new deregulated system, various parts of the electric system were broken into separate companies, and customers were given the option to purchase some services from other providers.
The separate companies included:
- Generation: This segment of the system is the company that generates and sells the energy.
- Transmission: This is the company that transports energy on high voltage lines over long distances (i.e., from one part of the state to another or from one state to another).
- Distribution: This part of the system is the company that delivers the electricity from a local substation to the customer's home or business.
Under a special provision in the law, electric cooperatives and municipal owned utilities can either choose to introduce competition for energy supply in their service territory ("opt in") or not to introduce competition ("opt out"). As a cooperative, we have this luxury because the state legislature recognized that electric cooperatives and municipal utilities were small businesses with specific needs and included a number of special provisions in the legislation to avoid the potential of larger utility companies taking over the small utility companies. In providing these accommodations, the legislators recalled the reasons electric cooperatives had to be formed in the first place. They remembered that the IOUs refused to provide electricity to rural areas of the state that were not profitable for them to extend service. Ohio is fully electrified today, only because electric cooperatives were formed and distribution systems were built to extend service to rural Ohio. This commitment to the citizens of Ohio was recognized by legislatures by giving cooperatives an opportunity to "opt in" if desired.
An "opt out" policy for now will enable HWE to monitor the situation fully and let the "dust settle." This initial position is a way to avoid the mistakes that are inevitable when any new method of doing business is introduced. In spite of everything, our number-one priority is to do what is best for the cooperative and its members.
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