PUCO: Should Retailers Serving Condos Be Regulated As Utilities?

by | Jan 5, 2016

The Public Utilities Commission of Ohio (PUCO) opened an investigation (Case No. 15-1594-AU-C01) on December 16 into whether companies that competitively resell energy to apartments and condominiums instead should be treated as utilities.

“The commission finds that an investigation should be initiated regarding the proper regulatory framework that should be applied to sub-metering and condominium associations in the state of Ohio,” PUCO said in its filing.

The case has been prompted by an April 2015 complaint (Case No. 15-697-EL-CSS) against Nationwide Energy Partners (NEP) of Columbus filed by Mark Whitt, owner of a residential condominium, also in Columbus.

In that filing, the complainant held that, when he purchased his unit in November 2014, he “was informed that NEP is the exclusive provider of utility service to North Bank [condominiums].…Complainant was required to executive a service agreement with NEP.”

Whitt further alleged that, not only did NEP buy electricity and water in bulk and resell them to the condominium owners at a profit, but “On information and belief, the rates and charges billed by NEP exceed the rates and charges of utility service providers and suppliers of competitive retail electric service that would serve North Bank, but for NEP’s unlawful provision of such services.”

He asked for relief, saying that the PUCO should regulate the activities of NEP as a utility on the grounds that:

  • NEP is knowingly engaged in the business of a public utility, and conducting such business in a manner contrary to law; c
  • The rates, charges, and other sums exacted by NEP, as well as the services rendered by NEP,  are unjust, unreasonable, unfair, discriminatory, and in violation of law;
  • The books and records of NEP should be examined and audited to determine the profits derived from its unlawful provision of service; and
  • Complainant is entitled to refunds for the difference between the rates charged by NEP and a lawful rate, as determined by the commission.

The case does have a precedent, harking back to 1992, according to the The Columbus Dispatch. At that time, the commission ruled that it did not have the authority to regulate the resale of water in a manufactured-home park (such as a condominium). The ruling has helped to establish that sub-metering

Nationwide Energy’s CEO, Gary Morsches, had this statement: “Bottom line, sub-metering is commonly used in deregulated states across the country because it results in greater transparency and reduces energy usage.”

The commission has asked interested parties to comment by January 21, and for reply comments to be submitted by February 5.

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