Ohio lawmakers propose utility commission overhaul

by Nick Evans, Ohio Capital Journal
January 12, 2024

Ohio Democrats believe they can improve a powerful state utility regulator by changing the nomination criteria. The governor selects the Public Utility Commission of Ohio’s five-member board, but he works from a short list devised by a nominating commission with experience in the field.

The legislation, sponsored by Rep. Daniel Troy, D-Willowick, would alter not just who can serve as a PUCO commissioner, but also who can serve on the PUCO nominating commission. In both cases those changes aim to provide greater consumer protection.

The effort is notable in light of the PUCO’s role in the biggest corruption case in Ohio’s history, House Bill 6. According to court filings, FirstEnergy admitted to bribing former PUCO chairman Sam Randazzo to draft provisions ensuring the company could bill consumers more if its revenue fell below a 2018 benchmark. That year was its best in a decade.

Still, the proposal’s supporters have their work cut out for them. Although lawmakers now distance themselves from HB 6, the GOP controlled legislature hasn’t mustered the will to repeal the measure. In addition, the consumer watchdog office, the Ohio Consumers’ Counsel, has urged the PUCO nominating commission to voluntarily take up similar reforms for years. Those requests have so far fallen on deaf ears.

Who would serve as a PUCO commissioner?

Troy’s legislation would require one of the five commissioners be a “bona fide consumer representative.” Importantly, the shortlist for that commission seat would be in the hands of the Ohio Consumer Counsel, not the typical nominating commission. That member would be added to the commission at the next vacancy.

The measure also bars any commissioner from having a previous business relationship with a regulated company. It further requires applicants to disclose any services rendered to a public utility regardless of whether that work was paid. The applications themselves would be public records.

State law already requires commissioners have three years’ experience in a handful of disciplines. The bill adds “social sciences, social services, consumer representation, or education and research in utility regulation,” to the list.

Who would serve on the nominating council?

The measure also makes several changes to the group charged with identifying nominees. Currently the 12-member council is comprised of designees selected by the leaders of the Ohio House and Senate as well as the heads of several state organizations like the state bar and the Ohio Municipal League. The governor gets to pick three members of the council representing the interests of utilities, business and labor.

Troy’s proposal would eliminate a seat for the state board of engineers and surveyors. In its place, the bill grants the governor an additional selection representing minority communities. The House Speaker and Senate President’s designees would have to be members of a consumer protection organization. Each chamber’s minority leader would get to select a councilmember for the first time—notably without the consumer protection requirements.

The measure tweaks eligibility requirements for two other seats as well to ensure the designees are part of a recognized trade association or advocacy group. Those changes apply to members tapped by the governor to represent business interests and the director of aging to represent seniors.

The bill would also place new restrictions on council members’ relationship to the utility industry. Outside of the councilmember selected to represent utilities’ interests, no other councilmember could currently or previously have been “a representative or employee” of a regulated company. Similarly, no member of the council would be allowed to “engage in business with, hold stocks or bonds in, or have pecuniary interest” in those companies either.

Public input

Troy’s measure would also take several steps to increase transparency. For instance, the nominating council would be required, rather than allowed, to solicit public comment on potential commissioners.

Additionally, the PUCO would have to host video recordings of council meetings and applicant interviews on its website and provide a way for the public to comment electronically on applicants and the nominating process overall.

In a statement Consumer Counsel spokesman J.P. Blackwood praised the new proposal.

“OCC’s call for reform of the PUCO Commissioner selection process have gone unanswered until now,” Blackwood said. “The need for reform has never been more apparent, as former PUCO Chair Randazzo faces 11 indictment charges by the U.S. Government including accepting bribes from FirstEnergy.”

“We would love to see this pro-consumer reform legislation fast-tracked,” he added, “like the recent gas utility infrastructure bill, since the selection of the next PUCO commissioner is already underway.”

So far, the measure has yet to get a hearing.

Follow OCJ Reporter Nick Evans on Twitter.

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