RESOLUTION CALLING FOR ELECTRICITY REFORM LEGISLATION
Adopted June 13, 2007
WHEREAS, the State of Ohio is one of the top three steel-producing states with nearly 100,000 direct and indirect jobs tied to the steel industry; and
WHEREAS, the Ohio steel industry annually provides for over $1.3 billion in direct wages, $2.2 billion of purchased Ohio goods and services and has a $7.2 billion total impact on Ohio’s economy; and
WHEREAS, the Ohio steel industry is heavily energy dependent and is the largest industrial sector user of energy in the State of Ohio, using nearly $1.8 billion of energy per year, of which $270 million is purchased electricity; and
WHEREAS, with enactment of Senate Bill 3 in 1999, there was a widely held belief that effective competition in wholesale and retail electric markets would develop after a reasonable Transition Period to provide customers in Ohio with lower prices and better service; and
WHEREAS, after more than five years since the enactment of Senate Bill 3, effective competition in wholesale and retail markets failed to develop and instead became dysfunctional, requiring an extension of the original Transition Period by establishing Rate Stabilization Plans ("RSPs") in 2004 for the purpose of stabilizing generation prices; and
WHEREAS, industries in states that have adopted electricity deregulation are facing a huge competitive disadvantage and are at risk of failing; and
WHEREAS, Ohio's current RSPs impose caps on generation rates through December 31, 2008 and all Ohio energy consumers will be adversely affected if power markets continue to be dysfunctional at the end of 2008 when the RSPs expire; and
WHEREAS, the Federal Energy Regulatory Commission (FERC) has taken no action to reform dysfunctional market pricing (“last-bid-in” marginal pricing) and there is no indication it intends to take any such action soon; and
WHEREAS, Governor Strickland has proposed an Ohio Energy Compact that recognizes the critical role electricity plays in the state and includes a call for a permanent solution to the price and reliability risks facing Ohio at the end of 2008;
NOW, THEREFORE, BE IT RESOLVED that the Ohio Steel Council, after investigation and deliberation, hereby urgently requests that Ohio, through the coordinated efforts of its Governor, General Assembly, Department of Development, Office of Consumer Counsel and Public Utilities Commission:
a) Enact legislation in 2007 to restructure the Ohio electricity industry utilizing a hybrid of reregulation and market forces, to bring long term stability to the price and reliability of electricity and; b) Develop a favorable regulatory climate in Ohio for co-generation, self-generation, distributed generation and cost effective renewable energy technologies.
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