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Deregulation and Choice

Ohio co-op member systems look forward to wholesale rate stability, but around them regulated utilities struggle with issues ranging from aggregation and retail competition to electric security plans that are providing a bumpy transition to the envisioned fully deregulated market.

People frustrated by deregulation literatureOhio’s electric cooperatives did not opt in when the state General Assembly deregulated the wholesale power market in 2001.

Lawmakers recognized the nonprofit, member-owned status of the cooperatives and their G&T, and they realized the advantages of local governance by G&T member boards and the strength of cost-based rates.

Electric cooperatives have watched while deregulation and retail choice in the early years failed to deliver savings for IOU customers. The plunge of electricity prices on the wholesale market, driven by the recession and a glut of natural gas, changed this situation.

Today, the IOUs are fighting each other for consumers. Competitive retail electric suppliers are busy signing up customers on short-term contracts. Cities, villages, counties and townships are holding load aggregation votes. Ohio’s regulated power industry is churning and full of uncertainty.

Day-time image of the Cardinal Power Plant at Brilliant, OhioBuckeye Power and its member systems continue to reap the benefits of stability and certainty. Over the decades, the cost of wholesale power for Ohio electric co-ops has been mostly stable, except during periods when capacity investment was required to meet growth demands or because of EPA compliance costs. Because Buckeye Power is a G&T cooperative owned by its member systems, corporate profits have never been the goal of power supply planning.

Buckeye Power provides safe, reliable and affordable electricity at cost-based rates. The planning and investment that resulted in upgrading power plants to world-class environmental performance did affect the cost of wholesale power, but it also ushered in at least a decade of rate stability, protecting members from the volatility of the market and the possibility of power supply pinches.

“Our members understand that long-range strategy has always guided our generation decisions,” says CEO Tony Ahern. “Our core business is meeting the electricity needs of Ohio’s cooperatives. To some it might be called a niche. To us, it’s our mission.”

 


 

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