As Pending in the House Public Utilities Committee

127th General Assembly Regular Session 2007-2008

Sub. S. B. No. 221

Senator Schuler 

(By Request)

Cosponsors: Senators Jacobson, Harris, Fedor, Boccieri, Miller, R., Morano, Mumper, Niehaus, Padgett, Roberts, Wilson, Spada 

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A BILL

To amend sections 1315.28, 4928.01, 4928.02,

1

4928.05, 4928.09, 4928.12, 4928.14, 4928.17,

2

4928.61, 4928.67, 4929.01, and 4929.02; to enact

3

sections 9.835, 4928.141, 4928.142, 4928.143,

4

4928.144, 4928.145, 4928.24, 4928.241,

5

4928.621, 4928.64, 4928.65, 4928.66, 4928.68, and

6

4929.051; and to repeal sections 4928.41,

7

4928.42, 4928.431, and 4928.44 of the Revised

8

Code to revise state energy policy to address

9

electric service price regulation, establish

10

alternative energy benchmarks for electric

11

distribution utilities and electric services

12

companies, provide for the use of renewable

13

energy credits, establish energy efficiency

14

standards for electric distribution utilities,

15

require greenhouse gas emission reporting and

16

carbon control planning for utility-owned

17

generating facilities, authorize energy price

18

risk management contracts, authorize the

19

phasing-in of the rates of any public utility,

20

and authorize for natural gas utilities revenue

21

decoupling related to energy conservation and

22

efficiency.

23

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 1315.28, 4928.01, 4928.02, 4928.05,	24
4928.09, 4928.12, 4928.14, 4928.17, 4928.61, 4928.67, 4929.01, and	25
4929.02 be amended and sections 9.835, 4928.141, 4928.142,	26
4928.143, 4928.144, 4928.145, 4928.24, 4928.241, 4928.621,	27
4928.64, 4928.65, 4928.66, 4928.68, and 4929.051 of the Revised	28
Code be enacted to read as follows:	29

Sec. 9.835. (A) As used in this section:

30

(1) "Energy price risk management contract" means a contract	31
that mitigates for the term of the contract the price volatility	32
of energy sources, including, but not limited to, natural gas,	33
gasoline, oil, and diesel fuel, and that is a budgetary and	34
financial tool only and not a contract for the procurement of an	35
energy source.	36

(2) "Political subdivision" means a county, city, village,	37
township, park district, or school district.	38

(3) "State entity" means the general assembly, the supreme	39
court, the court of claims, the office of an elected state	40
officer, or a department, bureau, board, office, commission,	41
agency, institution, or other instrumentality of this state	42
established by the constitution or laws of this state for the	43
exercise of any function of state government, but excludes a	44
political subdivision, an institution of higher education, the	45
public employees retirement system, the Ohio police and fire	46
pension fund, the state teachers retirement system, the school	47
employees retirement system, the state highway patrol retirement	48
system, or the city of Cincinnati retirement system.	49

(4) "State official" means the elected or appointed official,	50
or that person's designee, charged with the management of a state	51
entity.	52

(B) If it determines that doing so is in the best interest of	53
the state entity or the political subdivision, and subject to,	54
respectively, state or local appropriation to pay amounts due, a	55
state official or the legislative authority of a political	56
subdivision may enter into an energy price risk management	57
contract. The term of the contract shall not extend beyond the end	58
of the fiscal year in which the contract is entered into. Money	59
received pursuant to such a contract entered into by a state	60
official shall be deposited to the credit of the general revenue	61
fund of this state, and, unless otherwise provided by ordinance or	62
resolution enacted or adopted by the legislative authority of a	63
political subdivision authorizing any such contract, money	64
received under the contract shall be deposited to the credit of	65
the general fund of the political subdivision.	66

Sec. 1315.28.  (A)(1) No check-cashing business shall	67
knowingly make any incorrect statement of a material fact or omit	68
to state a material fact in any application made, investigation	69
conducted, or hearing held pursuant to sections 1315.22 to 1315.24	70
of the Revised Code.	71

(2) No check-cashing business shall engage in the business of	72
paying any utility bill on behalf of, at the request of, or as an	73
agent of any person or engage in the business of making a loan if	74
the loan is for the sole purpose of paying a utility bill. The	75
check-cashing business shall display in a conspicuous place a sign	76
that prominently and clearly states "Ohio law prohibits this	77
business paying utility bills for its customers or making a loan	78
solely for the purpose of a customer paying a utility bill (O.R.C.	79
1315.28(A)(2))."	80

(B) No person shall:

81

(1) Obstruct or refuse to permit any lawful investigation by	82
the superintendent of financial institutions, a person acting on	83
behalf of an agency of the state or a political subdivision, or a	84
law enforcement officer;	85

(2) Fail to comply with division (A) of section 1315.22 of	86
the Revised Code;	87

(3) Violate or participate in the violation of sections	88
1315.21 to 1315.28 of the Revised Code or the rules adopted	89
thereunder.	90

(C) Any person that knowingly violates any provision of	91
sections 1315.21 to 1315.28 of the Revised Code shall forfeit to	92
the injured party an amount equal to twice the actual damages	93
suffered by the injured party by reason of the violation.	94

Sec. 4928.01.  (A) As used in this chapter:

95

(1) "Ancillary service" means any function necessary to the	96
provision of electric transmission or distribution service to a	97
retail customer and includes, but is not limited to, scheduling,	98
system control, and dispatch services; reactive supply from	99
generation resources and voltage control service; reactive supply	100
from transmission resources service; regulation service; frequency	101
response service; energy imbalance service; operating	102
reserve-spinning reserve service; operating reserve-supplemental	103
reserve service; load following; back-up supply service;	104
real-power loss replacement service; dynamic scheduling; system	105
black start capability; and network stability service.	106

(2) "Billing and collection agent" means a fully independent	107
agent, not affiliated with or otherwise controlled by an electric	108
utility, electric services company, electric cooperative, or	109
governmental aggregator subject to certification under section	110
4928.08 of the Revised Code, to the extent that the agent is under	111
contract with such utility, company, cooperative, or aggregator	112
solely to provide billing and collection for retail electric	113
service on behalf of the utility company, cooperative, or	114
aggregator.	115

(3) "Certified territory" means the certified territory	116
established for an electric supplier under sections 4933.81 to	117
4933.90 of the Revised Code as amended by Sub. S.B. No. 3 of the	118
123rd general assembly.	119

(4) "Competitive retail electric service" means a component	120
of retail electric service that is competitive as provided under	121
division (B) of this section.	122

(5) "Electric cooperative" means a not-for-profit electric	123
light company that both is or has been financed in whole or in	124
part under the "Rural Electrification Act of 1936," 49 Stat. 1363,	125
7 U.S.C. 901, and owns or operates facilities in this state to	126
generate, transmit, or distribute electricity, or a not-for-profit	127
successor of such company.	128

(6) "Electric distribution utility" means an electric utility	129
that supplies at least retail electric distribution service.	130

(7) "Electric light company" has the same meaning as in	131
section 4905.03 of the Revised Code and includes an electric	132
services company, but excludes any self-generator to the extent it	133
consumes electricity it so produces or to the extent it sells for	134
resale electricity it so produces.	135

(8) "Electric load center" has the same meaning as in section	136
4933.81 of the Revised Code.	137

(9) "Electric services company" means an electric light	138
company that is engaged on a for-profit or not-for-profit basis in	139
the business of supplying or arranging for the supply of only a	140
competitive retail electric service in this state. "Electric	141
services company" includes a power marketer, power broker,	142
aggregator, or independent power producer but excludes an electric	143
cooperative, municipal electric utility, governmental aggregator,	144
or billing and collection agent.	145

(10) "Electric supplier" has the same meaning as in section	146
4933.81 of the Revised Code.	147

(11) "Electric utility" means an electric light company that	148
has a certified territory and is engaged on a for-profit basis	149
either in the business of supplying a noncompetitive retail	150
electric service in this state or in the businesses of supplying	151
both a noncompetitive and a competitive retail electric service	152
in this state. "Electric utility" excludes a municipal electric	153
utility or a billing and collection agent.	154

(12) "Firm electric service" means electric service other	155
than nonfirm electric service.	156

(13) "Governmental aggregator" means a legislative authority	157
of a municipal corporation, a board of township trustees, or a	158
board of county commissioners acting as an aggregator for the	159
provision of a competitive retail electric service under authority	160
conferred under section 4928.20 of the Revised Code.	161

(14) A person acts "knowingly," regardless of the person's	162
purpose, when the person is aware that the person's conduct will	163
probably cause a certain result or will probably be of a certain	164
nature. A person has knowledge of circumstances when the person is	165
aware that such circumstances probably exist.	166

(15) "Level of funding for low-income customer energy	167
efficiency programs provided through electric utility rates" means	168
the level of funds specifically included in an electric utility's	169
rates on October 5, 1999, pursuant to an order of the public	170
utilities commission issued under Chapter 4905. or 4909. of the	171
Revised Code and in effect on October 4, 1999, for the purpose of	172
improving the energy efficiency of housing for the utility's	173
low-income customers. The term excludes the level of any such	174
funds committed to a specific nonprofit organization or	175
organizations pursuant to a stipulation or contract.	176

(16) "Low-income customer assistance programs" means the	177
percentage of income payment plan program, the home energy	178
assistance program, the home weatherization assistance program,	179
and the targeted energy efficiency and weatherization program.	180

(17) "Market development period" for an electric utility	181
means the period of time beginning on the starting date of	182
competitive retail electric service and ending on the applicable	183
date for that utility as specified in section 4928.40 of the	184
Revised Code, irrespective of whether the utility applies to	185
receive transition revenues under this chapter.	186

(18) "Market power" means the ability to impose on customers	187
a sustained price for a product or service above the price that	188
would prevail in a competitive market.	189

(19) "Mercantile commercial customer" means a commercial or	190
industrial customer if the electricity consumed is for	191
nonresidential use and the customer consumes more than seven	192
hundred thousand kilowatt hours per year or is part of a national	193
account involving multiple facilities in one or more states.	194

(20) "Municipal electric utility" means a municipal	195
corporation that owns or operates facilities to generate,	196
transmit, or distribute electricity.	197

(21) "Noncompetitive retail electric service" means a	198
component of retail electric service that is noncompetitive as	199
provided under division (B) of this section.	200

(22) "Nonfirm electric service" means electric service	201
provided pursuant to a schedule filed under section 4905.30 of the	202
Revised Code or pursuant to an arrangement under section 4905.31	203
of the Revised Code, which schedule or arrangement includes	204
conditions that may require the customer to curtail or interrupt	205
electric usage during nonemergency circumstances upon notification	206
by an electric utility.	207

(23) "Percentage of income payment plan arrears" means funds	208
eligible for collection through the percentage of income payment	209
plan rider, but uncollected as of July 1, 2000.	210

(24) "Person" has the same meaning as in section 1.59 of the	211
Revised Code.	212

(25) "Advanced energy project" means any technologies,	213
products, activities, or management practices or strategies that	214
facilitate the generation or use of electricity and that reduce or	215
support the reduction of energy consumption or support the	216
production of clean, renewable energy for industrial,	217
distribution, commercial, institutional, governmental, research,	218
not-for-profit, or residential energy users. Such energy includes,	219
including, but is not limited to, wind power; geothermal energy;	220
solar thermal energy; and energy produced by micro turbines in	221
distributed generation applications with high electric	222
efficiencies, by combined heat and power applications, by fuel	223
cells powered by hydrogen derived from wind, solar, biomass,	224
hydroelectric, landfill gas, or geothermal sources, or by solar	225
electric generation, landfill gas, or hydroelectric generation	226
advanced energy resources and renewable energy resources.	227
"Advanced energy project" also includes any project described in	228
division (A), (B), or (C) of section 4928.621 of the Revised Code.	229

(26) "Regulatory assets" means the unamortized net	230
regulatory assets that are capitalized or deferred on the	231
regulatory books of the electric utility, pursuant to an order or	232
practice of the public utilities commission or pursuant to	233
generally accepted accounting principles as a result of a prior	234
commission rate-making decision, and that would otherwise have	235
been charged to expense as incurred or would not have been	236
capitalized or otherwise deferred for future regulatory	237
consideration absent commission action. "Regulatory assets"	238
includes, but is not limited to, all deferred demand-side	239
management costs; all deferred percentage of income payment plan	240
arrears; post-in-service capitalized charges and assets recognized	241
in connection with statement of financial accounting standards no.	242
109 (receivables from customers for income taxes); future nuclear	243
decommissioning costs and fuel disposal costs as those costs have	244
been determined by the commission in the electric utility's most	245
recent rate or accounting application proceeding addressing such	246
costs; the undepreciated costs of safety and radiation control	247
equipment on nuclear generating plants owned or leased by an	248
electric utility; and fuel costs currently deferred pursuant to	249
the terms of one or more settlement agreements approved by the	250
commission.	251

(27) "Retail electric service" means any service involved in	252
supplying or arranging for the supply of electricity to ultimate	253
consumers in this state, from the point of generation to the	254
point of consumption. For the purposes of this chapter, retail	255
electric service includes one or more of the following "service	256
components": generation service, aggregation service, power	257
marketing service, power brokerage service, transmission service,	258
distribution service, ancillary service, metering service, and	259
billing and collection service.	260

(28) "Small electric generation facility" means an electric	261
generation plant and associated facilities designed for, or	262
capable of, operation at a capacity of less than two megawatts.	263

(29)(28) "Starting date of competitive retail electric	264
service" means January 1, 2001, except as provided in division (C)	265
of this section.	266

(30)(29) "Customer-generator" means a user of a net metering	267
system.	268

(31)(30) "Net metering" means measuring the difference in an	269
applicable billing period between the electricity supplied by an	270
electric service provider and the electricity generated by a	271
customer-generator that is fed back to the electric service	272
provider.	273

(32)(31) "Net metering system" means a facility for the	274
production of electrical energy that does all of the following:	275

(a) Uses as its fuel either solar, wind, biomass, landfill	276
gas, or hydropower, or uses a microturbine or a fuel cell;	277

(b) Is located on a customer-generator's premises;

278

(c) Operates in parallel with the electric utility's	279
transmission and distribution facilities;	280

(d) Is intended primarily to offset part or all of the	281
customer-generator's requirements for electricity.	282

(33)(32) "Self-generator" means an entity in this state that	283
owns an electric generation facility that produces electricity	284
primarily for the owner's consumption and that may provide any	285
such excess electricity to retail electric service providers,	286
whether the facility is installed or operated by the owner or by	287
an agent under a contract.	288

(33) "Rate plan" means the standard service offer in effect	289
on the effective date of the amendment of this section by S.B. 221	290
of the 127th general assembly.	291

(34) "Advanced energy resource" means both of the following:

292

(a) Any method or any modification or replacement of any	293
property, process, device, structure, or equipment that increases	294
the generation output of an electric generating facility in this	295
state to the extent such efficiency is achieved without additional	296
carbon dioxide emissions by that facility and that consists of any	297
of the following:	298

(i) Any distributed generation system consisting of customer	299
cogeneration of electricity and thermal output simultaneously,	300
primarily to meet the energy needs of the customer's facilities;	301

(ii) Clean coal technology, integrated combined cycle coal	302
gasification technology, and any technology that includes the	303
design capability to control or prevent the emission of carbon	304
dioxide, which design capability the commission shall adopt by	305
rule and shall be based on economically feasible best available	306
technology or, in the absence of a determined best available	307
technology, shall be of the highest level of economically feasible	308
design capability for which there exists generally accepted	309
scientific opinion;	310

(iii) Advanced nuclear energy technology consisting of	311
generation III technology as defined by the nuclear regulatory	312
commission; other, later technology; or significant improvements	313
to existing facilities;	314

(iv) Any fuel cell used in the generation of electricity,	315
including, but not limited to, a proton exchange membrane fuel	316
cell, phosphoric acid fuel cell, molten carbonate fuel cell, or	317
solid oxide fuel cell.	318

(b) Demand-side management and any energy efficiency	319
improvement.	320

(35) "Hydropower" means energy produced by a hydroelectric	321
generating facility that is located at a dam on a river within or	322
bordering this state or an adjoining state and meets all of the	323
following standards:	324

(a) The facility provides for river flows that are not	325
detrimental for fish, wildlife, and water quality, including	326
seasonal flow fluctuations as defined by the applicable licensing	327
agency for the facility.	328

(b) The facility demonstrates that it complies with the	329
water quality standards of this state, which compliance may	330
consist of certification under Section 401 of the "Clean Water	331
Act of 1977," 91 Stat. 1598, 1599, 33 U.S.C. 1341, and	332
demonstrates that it has not contributed to a finding by this	333
state that the river has impaired water quality under Section	334
303(d) of the "Clean Water Act of 1977," 114 Stat. 870, 33	335
U.S.C. 1313.	336

(c) The facility complies with mandatory prescriptions	337
regarding fish passage as required by the federal energy	338
regulatory commission license issued for the project, regarding	339
fish protection for riverine, anadromous, and catadromus fish.	340

(d) The facility complies with the recommendations of the	341
Ohio environmental protection agency and with the terms of its	342
federal energy regulatory commission license regarding watershed	343
protection, mitigation, or enhancement.	344

(e) The facility complies with provisions of the "Endangered	345
Species Act of 1973," 87 Stat. 884, 16 U.S.C. 1531 to 1544, as	346
amended.	347

(f) The facility does not harm cultural resources of the	348
area. This can be shown through compliance with the terms of its	349
federal energy regulatory commission license or, if the facility	350
is not regulated by that commission, through development of a plan	351
approved by the Ohio historic preservation office.	352

(g) The facility complies with the terms of its federal	353
energy regulatory commission license or exemption that are related	354
to recreational access, accommodation, and facilities or, if the	355
facility is not regulated by that commission, the facility	356
complies with similar requirements as are recommended by resource	357
agencies; and the facility provides access to water to the public	358
without fee or charge.	359

(h) The facility is not recommended for removal by any	360
federal agency or agency of any state.	361

(36) "Renewable energy resource" means solar photovoltaic or	362
solar thermal energy, wind energy, hydropower, geothermal energy,	363
fuel derived from solid wastes, as defined in section 3734.01 of	364
the Revised Code, through fractionation, biological decomposition,	365
or other process that does not principally involve combustion,	366
biomass energy, biologically derived methane gas, or energy	367
derived from nontreated by-products of the pulping process or	368
wood manufacturing process, including bark, wood chips,	369
sawdust, and lignin in spent pulping liquors. "Renewable energy	370
resources" includes, but is not limited to, any fuel cell used	371
in the generation of electricity, including, but not limited to,	372
a proton exchange membrane fuel cell, phosphoric acid fuel cell,	373
molten carbonate fuel cell, or solid oxide fuel cell; wind turbine	374
located in the state's territorial waters of Lake Erie; storage	375
facility that will promote the better utilization of renewable	376
energy resources that primarily operates off peak; or distributed	377
generation system used by a customer to generate electricity	378
from any such energy.	379

(B) For the purposes of this chapter, a retail electric	380
service component shall be deemed a competitive retail electric	381
service if the service component is competitive pursuant to a	382
declaration by a provision of the Revised Code or pursuant to an	383
order of the public utilities commission authorized under division	384
(A) of section 4928.04 of the Revised Code. Otherwise, the	385
service component shall be deemed a noncompetitive retail electric	386
service.	387

(C) Prior to January 1, 2001, and after application by an	388
electric utility, notice, and an opportunity to be heard, the	389
public utilities commission may issue an order delaying the	390
January 1, 2001, starting date of competitive retail electric	391
service for the electric utility for a specified number of days	392
not to exceed six months, but only for extreme technical	393
conditions precluding the start of competitive retail electric	394
service on January 1, 2001.	395

Sec. 4928.02.  It is the policy of this state to do the	396
following throughout this state beginning on the starting date of	397
competitive retail electric service:	398

(A) Ensure the availability to consumers of adequate,	399
reliable, safe, efficient, nondiscriminatory, and reasonably	400
priced retail electric service;	401

(B) Ensure the availability of unbundled and comparable	402
retail electric service that provides consumers with the supplier,	403
price, terms, conditions, and quality options they elect to meet	404
their respective needs;	405

(C) Ensure diversity of electricity supplies and suppliers,	406
by giving consumers effective choices over the selection of those	407
supplies and suppliers and by encouraging the development of	408
distributed and small generation facilities;	409

(D) Encourage innovation and market access for cost-effective	410
supply- and demand-side retail electric service including, but not	411
limited to, demand-side management, time-differentiated pricing,	412
and implementation of advanced metering infrastructure;	413

(E) Encourage cost-effective and efficient access to	414
information regarding the operation of the transmission and	415
distribution systems of electric utilities in order to promote	416
both effective customer choice of retail electric service and the	417
development of performance standards and targets for service	418
quality for all consumers, including annual achievement reports	419
written in plain language;	420

(F) Ensure that an electric utility's transmission and	421
distribution systems are available to a customer-generator or	422
owner of distributed generation, so that the customer-generator or	423
owner can market and deliver the electricity it produces;	424

(G) Recognize the continuing emergence of competitive	425
electricity markets through the development and implementation of	426
flexible regulatory treatment;	427

(G)(H) Ensure effective competition in the provision of	428
retail electric service by avoiding anticompetitive subsidies	429
flowing from a noncompetitive retail electric service to a	430
competitive retail electric service or to a product or service	431
other than retail electric service, and vice versa, including by	432
prohibiting the recovery of any generation-related costs through	433
distribution or transmission rates;	434

(H)(I) Ensure retail electric service consumers protection	435
against unreasonable sales practices, market deficiencies, and	436
market power;	437

(I)(J) Provide coherent, transparent means of giving	438
appropriate incentives to technologies that can adapt	439
successfully to potential environmental mandates;	440

(K) Encourage implementation of distributed generation across	441
customer classes through regular review and updating of	442
administrative rules governing critical issues such as, but not	443
limited to, interconnection standards, standby charges, and net	444
metering;	445

(L) Protect at-risk populations, including, but not limited	446
to, when considering the implementation of any new alternative	447
energy resource;	448

(M) Encourage the education of small business owners in this	449
state regarding the use of, and encourage the use of, energy	450
efficiency programs and alternative energy resources in their	451
businesses;	452

(N) Facilitate the state's effectiveness in the global	453
economy.	454

In carrying out this policy, the commission shall consider	455
rules as they apply to the costs of electric distribution	456
infrastructure, including, but not limited to, line extensions,	457
for the purpose of development in this state.	458

Sec. 4928.05.  (A)(1) On and after the starting date of	459
competitive retail electric service, a competitive retail electric	460
service supplied by an electric utility or electric services	461
company shall not be subject to supervision and regulation by a	462
municipal corporation under Chapter 743. of the Revised Code or by	463
the public utilities commission under Chapters 4901. to 4909.,	464
4933., 4935., and 4963. of the Revised Code, except section	465
sections 4905.10, division (B) of section 4905.33, and sections	466
4905.35, 4909.50, and 4933.81 to 4933.90; except sections	467
4905.06, 4935.03, 4963.40, and 4963.41 of the Revised Code only	468
to the extent related to service reliability and public safety;	469
and except as otherwise provided in this chapter. The	470
commission's authority to enforce those excepted provisions with	471
respect to a competitive retail electric service shall be such	472
authority as is provided for their enforcement under Chapters	473
4901. to 4909., 4933., 4935., and 4963. of the Revised Code and	474
this chapter.	475

On and after the starting date of competitive retail	476
electric service, a competitive retail electric service supplied	477
by an electric cooperative shall not be subject to supervision and	478
regulation by the commission under Chapters 4901. to 4909., 4933.,	479
4935., and 4963. of the Revised Code, except as otherwise	480
expressly provided in sections 4928.01 to 4928.10 and 4928.16 of	481
the Revised Code.	482

(2) On and after the starting date of competitive retail	483
electric service, a noncompetitive retail electric service	484
supplied by an electric utility shall be subject to supervision	485
and regulation by the commission under Chapters 4901. to 4909.,	486
4933., 4935., and 4963. of the Revised Code and this chapter, to	487
the extent that authority is not preempted by federal law. The	488
commission's authority to enforce those provisions with respect to	489
a noncompetitive retail electric service shall be the authority	490
provided under those chapters and this chapter, to the extent the	491
authority is not preempted by federal law. Notwithstanding	492
Chapters 4905. and 4909. of the Revised Code, commission authority	493
under this chapter shall include the authority to provide, through	494
a reconcilable rider on an electric distribution utility's	495
distribution rates, for the recovery of all transmission and	496
transmission-related costs, including ancillary and congestion	497
costs, imposed on or charged to the utility by the federal energy	498
regulatory commission or a regional transmission organization,	499
independent transmission operator, or similar organization	500
approved by the federal energy regulatory commission.	501

The commission shall exercise its jurisdiction with respect	502
to the delivery of electricity by an electric utility in this	503
state on or after the starting date of competitive retail electric	504
service so as to ensure that no aspect of the delivery of	505
electricity by the utility to consumers in this state that	506
consists of a noncompetitive retail electric service is	507
unregulated.	508

On and after that starting date, a noncompetitive retail	509
electric service supplied by an electric cooperative shall not be	510
subject to supervision and regulation by the commission under	511
Chapters 4901. to 4909., 4933., 4935., and 4963. of the Revised	512
Code, except sections 4933.81 to 4933.90 and 4935.03 of the	513
Revised Code. The commission's authority to enforce those excepted	514
sections with respect to a noncompetitive retail electric service	515
of an electric cooperative shall be such authority as is provided	516
for their enforcement under Chapters 4933. and 4935. of the	517
Revised Code.	518

(B) Nothing in this chapter affects the authority of the	519
commission under Title XLIX of the Revised Code to regulate an	520
electric light company in this state or an electric service	521
supplied in this state prior to the starting date of competitive	522
retail electric service.	523

(C)(1) No electric utility shall enter into a schedule or	524
arrangement under, or in the nature of a schedule or arrangement	525
under, section 4905.31 of the Revised Code.	526

(2) Notwithstanding division (C)(1) of this section, a	527
state-chartered elementary, middle, or high school or a public or	528
not-for-profit hospital may apply for commission approval of such	529
a schedule or arrangement. The commission may approve the schedule	530
or arrangement if it finds the schedule or arrangement is in the	531
public interest and, accordingly, may order the utility to effect	532
the schedule or arrangement. The process for approval shall be	533
open and transparent, with the terms and conditions of the	534
schedule or arrangement available on the commission's web site.	535

Sec. 4928.09.  (A)(1) No person shall operate in this state	536
as an electric utility, an electric services company, or a billing	537
and collection agent, or a regional transmission organization	538
approved by the federal energy regulatory commission and having	539
the responsibility for maintaining reliability in all or part of	540
this state on and after the starting date of competitive retail	541
electric service unless that person first does both of the	542
following:	543

(a) Consents irrevocably to the jurisdiction of the courts of	544
this state and service of process in this state, including,	545
without limitation, service of summonses and subpoenas, for any	546
civil or criminal proceeding arising out of or relating to such	547
operation, by providing that irrevocable consent in accordance	548
with division (A)(4) of this section;	549

(b) Designates an agent authorized to receive that service of	550
process in this state, by filing with the commission a document	551
designating that agent.	552

(2) No person shall continue to operate as such an electric	553
utility, electric services company, or billing and collection	554
agent, or regional transmission organization described in division	555
(A)(1) of this section unless that person continues to consent to	556
such jurisdiction and service of process in this state and	557
continues to designate an agent as provided under this division,	558
by refiling in accordance with division (A)(4) of this section the	559
appropriate documents filed under division (A)(1) of this section	560
or, as applicable, the appropriate amended documents filed under	561
division (A)(3) of this section. Such refiling shall occur during	562
the month of December of every fourth year after the initial	563
filing of a document under division (A)(1) of this section.	564

(3) If the address of the person filing a document under	565
division (A)(1) or (2) of this section changes, or if a person's	566
agent or the address of the agent changes, from that listed on the	567
most recently filed of such documents, the person shall file an	568
amended document containing the new information.	569

(4) The consent and designation required by divisions (A)(1)	570
to (3) of this section shall be in writing, on forms prescribed by	571
the public utilities commission. The original of each such	572
document or amended document shall be legible and shall be filed	573
with the commission, with a copy filed with the office of the	574
consumers' counsel and with the attorney general's office.	575

(B) A person who enters this state pursuant to a summons,	576
subpoena, or other form of process authorized by this section is	577
not subject to arrest or service of process, whether civil or	578
criminal, in connection with other matters that arose before the	579
person's entrance into this state pursuant to such summons,	580
subpoena, or other form of process.	581

(C) Divisions (A) and (B) of this section do not apply to any	582
of the following:	583

(1) A corporation incorporated under the laws of this state	584
that has appointed a statutory agent pursuant to section 1701.07	585
or 1702.06 of the Revised Code;	586

(2) A foreign corporation licensed to transact business in	587
this state that has appointed a designated agent pursuant to	588
section 1703.041 of the Revised Code;	589

(3) Any other person that is a resident of this state or that	590
files consent to service of process and designates a statutory	591
agent pursuant to other laws of this state.	592

Sec. 4928.12.  (A) Except as otherwise provided in sections	593
4928.31 to 4928.40 of the Revised Code, no entity shall own or	594
control transmission facilities as defined under federal law and	595
located in this state on or after the starting date of competitive	596
retail electric service unless that entity is a member of, and	597
transfers control of those facilities to, one or more qualifying	598
transmission entities, as described in division (B) of this	599
section, that are operational.	600

(B) An entity that owns or controls transmission facilities	601
located in this state complies with division (A) of this section	602
if each transmission entity of which it is a member meets all of	603
the following specifications:	604

(1) The transmission entity is approved by the federal energy	605
regulatory commission.	606

(2) The transmission entity effects separate control of	607
transmission facilities from control of generation facilities.	608

(3) The transmission entity implements, to the extent	609
reasonably possible, policies and procedures designed to minimize	610
pancaked transmission rates within this state.	611

(4) The transmission entity improves service reliability	612
within this state.	613

(5) The transmission entity achieves the objectives of an	614
open and competitive electric generation marketplace, elimination	615
of barriers to market entry, and preclusion of control of	616
bottleneck electric transmission facilities in the provision of	617
retail electric service.	618

(6) The transmission entity is of sufficient scope or	619
otherwise operates to substantially increase economical supply	620
options for consumers.	621

(7) The governance structure or control of the transmission	622
entity is independent of the users of the transmission facilities,	623
and no member of its board of directors has an affiliation, with	624
such a user or with an affiliate of a user during the member's	625
tenure on the board, such as to unduly affect the transmission	626
entity's performance. For the purpose of division (B)(7) of this	627
section, a "user" is any entity or affiliate of that entity that	628
buys or sells electric energy in the transmission entity's region	629
or in a neighboring region.	630

(8) The transmission entity operates under policies that	631
promote positive performance designed to satisfy the electricity	632
requirements of customers.	633

(9) The transmission entity is capable of maintaining	634
real-time reliability of the electric transmission system,	635
ensuring comparable and nondiscriminatory transmission access and	636
necessary services, minimizing system congestion, and further	637
addressing real or potential transmission constraints.	638

(C) To the extent that a transmission entity under division	639
(A) of this section is authorized to build transmission	640
facilities, that transmission entity has the powers provided in	641
and is subject to sections 1723.01 to 1723.08 of the Revised Code.	642

(D) For the purpose of forming or participating in a regional	643
regulatory oversight body or mechanism developed for any	644
transmission entity under division (A) of this section that is of	645
regional scope and operates within this state:	646

(1) The commissionfederal energy advocate appointed under	647
section 4928.68 of the Revised Code shall make joint	648
investigations, hold joint hearings, within or outside this state,	649
and issue joint or concurrent orders in conjunction or concurrence	650
with any official or agency of any state or of the United States,	651
whether in the holding of those investigations or hearings, or in	652
the making of those orders, the commissionfederal energy advocate	653
is functioning under agreements or compacts between states, under	654
the concurrent power of states to regulate interstate commerce, as	655
an agency of the United States, or otherwise. The federal energy	656
advocate also shall represent this state with regard to all	657
matters that may come before a qualifying transmission entity or	658
before any federal agency or any court on all matters affecting	659
the price or availability of electricity in this state.	660

(2) The commissionfederal energy advocate, on behalf of this	661
state, shall negotiate and enter into agreements or compacts with	662
agencies of other states for cooperative regulatory efforts and	663
for the enforcement of the respective state laws regarding the	664
transmission entity.	665

(E) If a qualifying transmission entity is not operational as	666
contemplated in division (A) of this section, division (A)(13) of	667
section 4928.34 of the Revised Code, or division (G) of section	668
4928.35 of the Revised Code, the commission by rule or order shall	669
take such measures or impose such requirements on all for-profit	670
entities that own or control electric transmission facilities	671
located in this state as the commissionfederal energy advocate	672
determines necessary and proper to achieve independent,	673
nondiscriminatory operation of, and separate ownership and control	674
of, such electric transmission facilities on or after the starting	675
date of competitive retail electric service.	676

(F) Notwithstanding any other provision of this section and	677
upon request by any person including the federal energy advocate	678
or upon the initiative of the public utilities commission, the	679
commission by order may relieve any entity that owns or controls	680
electric transmission facilities in this state of its obligation	681
to comply with division (A) of this section, if the commission,	682
after notice and hearing, determines that that action will promote	683
the state policy specified in section 4928.02 of the Revised Code.	684

Sec. 4928.14. (A) After its market development period, an	685
electric distribution utility in this state shall provide	686
consumers, on a comparable and nondiscriminatory basis within its	687
certified territory, a market-based standard service offer of all	688
competitive retail electric services necessary to maintain	689
essential electric service to consumers, including a firm supply	690
of electric generation service. Such offer shall be filed with the	691
public utilities commission under section 4909.18 of the Revised	692
Code.	693

(B) After that market development period, each electric	694
distribution utility also shall offer customers within its	695
certified territory an option to purchase competitive retail	696
electric service the price of which is determined through a	697
competitive bidding process. Prior to January 1, 2004, the	698
commission shall adopt rules concerning the conduct of the	699
competitive bidding process, including the information	700
requirements necessary for customers to choose this option and the	701
requirements to evaluate qualified bidders. The commission may	702
require that the competitive bidding process be reviewed by an	703
independent third party. No generation supplier shall be	704
prohibited from participating in the bidding process, provided	705
that any winning bidder shall be considered a certified supplier	706
for purposes of obligations to customers. At the election of the	707
electric distribution utility, and approval of the commission, the	708
competitive bidding option under this division may be used as the	709
market-based standard offer required by division (A) of this	710
section. The commission may determine at any time that a	711
competitive bidding process is not required, if other means to	712
accomplish generally the same option for customers is readily	713
available in the market and a reasonable means for customer	714
participation is developed.	715

(C) After the market development period, theThe failure of a	716
supplier to provide retail electric generation service to	717
customers within the certified territory of thean electric	718
distribution utility shall result in the supplier's customers,	719
after reasonable notice, defaulting to the utility's standard	720
service offer filed under division (A) of this sectionsections	721
4928.141, 4928.142, and 4928.143 of the Revised Code until the	722
customer chooses an alternative supplier. A supplier is deemed	723
under this divisionsection to have failed to provide such service	724
if the commission finds, after reasonable notice and opportunity	725
for hearing, that any of the following conditions are met:	726

(1)(A) The supplier has defaulted on its contracts with	727
customers, is in receivership, or has filed for bankruptcy.	728

(2)(B) The supplier is no longer capable of providing the	729
service.	730

(3)(C) The supplier is unable to provide delivery to	731
transmission or distribution facilities for such period of time as	732
may be reasonably specified by commission rule adopted under	733
division (A) of section 4928.06 of the Revised Code.	734

(4)(D) The supplier's certification has been suspended,	735
conditionally rescinded, or rescinded under division (D) of	736
section 4928.08 of the Revised Code.	737

Sec. 4928.141. (A) Beginning January 1, 2009, an electric	738
distribution utility shall provide consumers, on a comparable and	739
nondiscriminatory basis within its certified territory, a	740
market-based standard service offer of all competitive retail	741
electric services necessary to maintain essential electric service	742
to consumers, including a firm supply of electric generation	743
service. To that end, the electric distribution utility shall	744
apply to the public utilities commission to establish the	745
standard service offer in accordance with section 4928.142 or	746
4928.143 of the Revised Code and, at its discretion, may apply	747
simultaneously under both sections, except that the utility's	748
first standard service offer application at minimum shall include	749
a filing under section 4928.143 of the Revised Code. Only a	750
standard service offer authorized in accordance with section	751
4928.142 or 4928.143 of the Revised Code, shall serve as the	752
utility's standard service offer for the purpose of compliance	753
with this section; and that standard service offer shall serve	754
as the utility's default standard service offer for the purpose	755
of section 4928.14 of the Revised Code. However, pursuant to	756
division (D) of section 4928.143 of the Revised Code, any rate	757
plan that extends beyond December 31, 2008, shall continue to be	758
in effect for the subject electric distribution utility for the	759
duration of the plan's term.	760

(B) The commission shall set the time for hearing of a filing	761
under section 4928.142 or 4928.143 of the Revised Code, send	762
written notice of the hearing to the electric distribution	763
utility, and publish notice in a newspaper of general circulation	764
in each county in the utility's certified territory. The	765
commission shall adopt rules regarding filings under those	766
sections.	767

Sec. 4928.142. (A) For the purpose of complying with section	768
4928.141 of the Revised Code and subject to division (D) of this	769
section and, as applicable, subject to the rate plan requirement	770
of division (A) of section 4928.141 of the Revised Code, an	771
electric distribution utility may establish a standard service	772
offer price for retail electric generation service that is	773
delivered to the utility under a market-rate offer.	774

(1) The market-rate offer shall be determined through a	775
competitive bidding process that provides for all of the	776
following:	777

(a) Open, fair, and transparent competitive solicitation;

778

(b) Clear product definition;

779

(c) Standardized bid evaluation criteria;

780

(d) Oversight by an independent third party that shall design	781
the solicitation, administer the bidding, and ensure that the	782
criteria specified in division (A)(1)(a) to (c) of this section	783
are met;	784

(e) Evaluation of the submitted bids prior to the selection	785
of the least-cost bid winner or winners.	786

No generation supplier shall be prohibited from participating	787
in the bidding process.	788

(2) The public utilities commission shall modify rules, or	789
adopt new rules as necessary, concerning the conduct of the	790
competitive bidding process and the qualifications of bidders,	791
which rules shall foster supplier participation in the bidding	792
process and shall be consistent with the requirements of division	793
(A)(1) of this section.	794

(B) Prior to initiating a competitive bidding process for a	795
market-rate offer under division (A) of this section, the electric	796
distribution utility shall file an application with the	797
commission. An electric distribution utility may file its	798
application with the commission prior to the effective date of	799
the commission rules required under division (A)(2) of this	800
section, and, as the commission determines necessary, the utility	801
shall immediately conform its filing to the rules upon their	802
taking effect.	803

An application under this division shall detail the electric	804
distribution utility's proposed compliance with the requirements	805
of division (A)(1) of this section and with commission rules	806
under division (A)(2) of this section and that all of the	807
following requirements are met:	808

(1) The electric distribution utility or its transmission	809
service affiliate belongs to at least one regional transmission	810
organization that has been approved by the federal energy	811
regulatory commission; or there otherwise is comparable and	812
nondiscriminatory access to the electric transmission grid.	813

(2) Any such regional transmission organization has a	814
market-monitor function and the ability to take actions to	815
identify and mitigate market power or the electric distribution	816
utility's market conduct; or the electric distribution utility	817
otherwise establishes that a similar market monitoring function	818
exists with commensurate ability to identify and monitor market	819
conditions and mitigate conduct associated with the exercise of	820
market power.	821

(3) A published source of information is available publicly	822
or through subscription that identifies pricing information for	823
traded, electricity, on- and off-peak energy products that are	824
scheduled for delivery beginning at least two years from the date	825
of the publication and is updated on a regular basis.	826

The commission shall initiate a proceeding and, within ninety	827
days after the application's filing date, shall determine by order	828
whether the electric distribution utility and its market-rate	829
offer meet all of the foregoing requirements. If the finding is	830
positive, the electric distribution utility may initiate its	831
competitive bidding process. If the finding is negative as to one	832
or more requirements, the commission in the order may direct the	833
electric distribution utility regarding how any deficiency may be	834
remedied in a timely manner to the commission's satisfaction;	835
otherwise, the electric distribution utility shall withdraw the	836
application. However, if such remedy is made or the finding is	837
positive and also if the electric distribution utility made a	838
simultaneous filing under this section and section 4928.143 of the	839
Revised Code, the utility shall not initiate its competitive bid	840
until at least one hundred twenty days after the filing date of	841
those applications.	842

(C) Upon the completion of the competitive bidding process	843
authorized by division (C) of this section, including for the	844
purpose of division (D) of this section, the commission shall	845
select the least-cost bid winner or winners of that process, and	846
such selected bid or bids shall be the electric distribution	847
utility's standard service offer unless the commission, by order	848
issued before the third calendar day following the conclusion of	849
the competitive bidding process for the market rate offer,	850
determines that one or more of the following criteria are not	851
met:	852

(1) Each portion of the bidding process was oversubscribed,	853
such that the amount of supply bid upon was greater than the	854
amount of the load bid out.	855

(2) There were four or more bidders.

856

(3) At least twenty-five per cent of the load is bid upon by	857
one or more persons other than the electric distribution utility.	858

All costs incurred by the electric distribution utility as a	859
result of or related to the competitive bidding process or to	860
procuring generation service to provide the standard service	861
offer, including the costs of energy and capacity and the costs	862
of all other products and services procured as a result of the	863
competitive bidding process, shall be timely recovered through	864
the standard service offer price, and, for that purpose, the	865
commission shall approve a reconciliation mechanism, other	866
recovery mechanism, or a combination of such mechanisms for the	867
utility.	868

(D) The first application filed under this section by an	869
electric distribution utility that, as of the effective date of	870
this section, directly owns, in whole or in part, operating	871
electric generating facilities that had been used and useful in	872
this state shall require that a portion of that's utility's	873
standard service offer load for the first five years of the	874
market rate offer be competitively bid under division (A) of	875
this section as follows: not less than ten per cent of the	876
load in year one and not less than twenty per cent in year two,	877
thirty per cent in year three, forty per cent in year four, and	878
fifty per cent in year five. Consistent with those percentages,	879
the commission shall determine the actual percentages for each	880
year of years one through five. The standard service offer price	881
for retail electric generation service under this first	882
application shall be a proportionate blend of the bid price and	883
the generation service price for the remaining standard service	884
offer load, which latter price shall be equal to the electric	885
distribution utility's most recent standard service offer price,	886
adjusted, upward or downward, as the commission determines	887
reasonable, relative to the jurisdictional portion of any known	888
and measurable changes in one or more of the following:	889

(1) The electric distribution utility's prudently incurred	890
cost of fuel used to produce electricity;	891

(2) Its prudently incurred purchased power costs;

892

(3) Its costs of satisfying the supply and demand portfolio	893
requirements of this state, including, but not limited to,	894
renewable energy resource and energy efficiency requirements;	895

(4) Its costs prudently incurred to comply with environmental	896
laws and regulations.	897

In making any adjustment to the most recent standard service	898
offer price on the basis of costs described in division (D)(4) of	899
this section, the commission shall consider the benefits that may	900
become available to the electric distribution utility as a result	901
of or in connection with the costs included in the adjustment,	902
including, but not limited to, the utility's receipt of emissions	903
credits or its receipt of tax benefits or of other benefits, and,	904
accordingly, the commission may impose such conditions on the	905
adjustment to ensure that any such benefits are properly aligned	906
with the associated cost responsibility.	907

Additionally, the commission may adjust the electric	908
distribution utility's most recent standard service offer price by	909
such just and reasonable amount that the commission determines	910
necessary to address any emergency that threatens the utility's	911
financial integrity or to ensure that the resulting revenue	912
available to the utility for providing the standard service offer	913
is not so inadequate as to result, directly or indirectly, in a	914
taking of property without compensation pursuant to Section 19 of	915
Article I, Ohio Constitution. The electric distribution utility	916
has the burden of demonstrating that any adjustment to its most	917
recent standard service offer price is proper in accordance with	918
this division. The commission's determination of the electric	919
distribution utility's most recent standard service offer price	920
shall exclude any previously authorized allowance for transition	921
costs with such exclusion being effective on and after the date	922
the allowance is scheduled to end under the utility's rate plan.	923

(E) Beginning in the second year of a blended price under	924
division (D) of this section and notwithstanding any other	925
requirement of this section, the commission may alter	926
prospectively the proportions specified in that division to	927
mitigate any effect of an abrupt change in the electric	928
distribution utility's standard service offer price that would	929
otherwise result in general or with respect to any rate group of	930
rate schedule but for such alteration. Any such alteration shall	931
be made not more often than annually, and the commission shall	932
not, by altering those proportions and in any event, cause the	933
duration of the blending period to exceed ten years as counted	934
from the effective date of the approved market rate offer.	935
Additionally, any such alteration shall be limited to an	936
alteration affecting the prospective proportions used during the	937
blending period and shall not affect any blending proportion	938
previously approved and applied by the commission under this	939
division.	940

(F) An electric distribution utility that has received	941
commission approval of its first application under division (C) of	942
this section shall not, nor ever shall be authorized or required	943
by the commission to, file an application under section 4928.143	944
of the Revised Code.	945

Sec. 4928.143. (A) For the purpose of complying with section	946
4928.141 of the Revised Code, an electric distribution utility may	947
file an application for public utilities commission approval of an	948
electric security plan as prescribed under division (B) of this	949
section. The utility may file that application prior to the	950
effective date of any rules the commission may adopt for the	951
purpose of this section, and, as the commission determines	952
necessary, the utility immediately shall conform its filing to	953
those rules upon their taking effect.	954

(B) Notwithstanding any other provision of Title XLIX of the	955
Revised Code to the contrary except division (D) of this section:	956

(1) An electric security plan shall include provisions	957
relating to the supply and pricing of electric generation	958
service. In addition, if the proposed electric security plan has a	959
term longer than three years, it shall include provisions in the	960
plan to permit the public utilities commission to test the plan	961
pursuant to division (E) of this section and any transitional	962
conditions that should be adopted by the commission if the	963
commission terminates the plan as authorized under that division.	964

(2) The plan may provide for or include, without limitation,	965
any of the following:	966

(a) Automatic recovery of the electric distribution utility's	967
costs of fuel used to generate the electricity supplied under the	968
offer; purchased power supplied under the offer, including the	969
cost of energy and capacity, and including purchased power	970
acquired from an affiliate; emission allowances; and federally	971
mandated carbon or energy taxes;	972

(b) A reasonable allowance for construction work in progress	973
for any of the electric distribution utility's cost of	974
constructing an electric generating facility or for an	975
environmental expenditure for any electric generating facility of	976
the electric distribution utility, provided the cost is incurred	977
or the expenditure occurs on or after January 1, 2009. Any such	978
allowance shall be subject to the construction work in progress	979
allowance limitations of division (A) of section 4909.15 of the	980
Revised Code, except that the commission may authorize such an	981
allowance upon the incurrence of the cost or occurrence of the	982
expenditure. No such allowance for generating facility	983
construction shall be authorized, however, unless the commission	984
first determines in the proceeding that there is need for the	985
facility based on resource planning projections submitted by the	986
electric distribution utility. Further, no such allowance shall be	987
authorized unless the facility's construction was sourced through	988
a competitive bid process, regarding which process the commission	989
may adopt rules. An allowance approved under division (B)(2)(b) of	990
this section shall be established as a nonbypassable surcharge	991
for the life of the facility.	992

(c) The establishment of a nonbypassable surcharge for the	993
life of an electric generating facility that is owned or operated	994
by the electric distribution utility, was sourced through a	995
competitive bid process subject to any such rules as the	996
commission adopts under division (B)(2)(b) of this section, and is	997
newly used and useful on or after January 1, 2009, which	998
surcharge shall cover all costs of the utility specified in the	999
application, excluding costs recovered through a surcharge under	1000
division (B)(2)(b) of this section. However, no surcharge shall	1001
be authorized unless the commission first determines in the	1002
proceeding that there is need for the facility based on resource	1003
planning projections submitted by the electric distribution	1004
utility. Additionally, if a surcharge is authorized for a	1005
facility pursuant to plan approval under division (D) of this	1006
section and as a condition of the continuation of the surcharge,	1007
the electric distribution utility shall dedicate to Ohio	1008
consumers for the life of the facility all the electricity	1009
generated by that facility.	1010

(d) Terms, conditions, or charges relating to limitations on	1011
customer shopping for retail electric generation service,	1012
bypassability, back-up or supplemental power service; default	1013
service, carrying costs, amortization periods, and accounting or	1014
deferrals, including future recovery of such deferrals, as would	1015
have the effect of stabilizing or providing certainty regarding	1016
retail electric service;	1017

(e) Automatic increases or decreases in any component of the	1018
standard service offer price;	1019

(f) Provisions for the electric distribution utility to	1020
securitize any phase-in, inclusive of carrying charges, of the	1021
utility's standard service offer price, which phase-in is	1022
authorized pursuant to section 4909.50 of the Revised Code; and	1023
provisions for the recovery of the utility's cost of	1024
securitization. If the commission's order includes such a	1025
phase-in, the order also shall provide for the creation of	1026
regulatory assets pursuant to generally accepted accounting	1027
principles, by authorizing the deferral of incurred costs equal	1028
to the amount not collected, plus carrying charges on that	1029
amount. Further, the order shall authorize the collection of	1030
those deferrals through a nonbypassable surcharge on the	1031
utility's rates.	1032

(g) Provisions relating to transmission, ancillary,	1033
congestion, or any related service required for the standard	1034
service offer, including provisions for the recovery of any cost	1035
of such service that the electric distribution utility incurs on	1036
or after that date pursuant to the standard service offer;	1037

(h) Provisions regarding the utility's distribution service,	1038
including, without limitation and notwithstanding any provision	1039
of Title XLIX of the Revised Code to the contrary, provisions	1040
regarding single issue ratemaking, a revenue decoupling mechanism	1041
or any other incentive ratemaking, and provisions regarding	1042
distribution infrastructure and modernization incentives for	1043
the electric distribution utility. The latter may include a	1044
long-term energy delivery infrastructure modernization plan for	1045
that utility or any plan providing for the utility's recovery	1046
of costs, including lost revenue, shared savings, and avoided	1047
costs, and a just and reasonable rate of return on such	1048
infrastructure modernization.	1049

(i) Provisions under which the electric distribution utility	1050
may implement economic development, job retention, and energy	1051
efficiency programs, which provisions may allocate program costs	1052
across all classes of customers of the utility and those of	1053
electric distribution utilities in the same holding company	1054
system.	1055

(C)(1) The burden of proof in the proceeding shall be on the	1056
electric distribution utility. Subject to division (D) of this	1057
section, the commission shall issue an order under this division	1058
not later than one hundred twenty days after the application's	1059
filing date. The commission by order shall approve or modify and	1060
approve an application filed under division (A) of this section if	1061
it finds that the electric security plan so approved, including	1062
its pricing and all other terms and conditions, including any	1063
deferrals and any future recovery of deferrals, is favorable in	1064
the aggregate as compared to the expected results that would	1065
otherwise apply. Additionally, if the commission so approves an	1066
application that contains a surcharge under division (B)(2)(b) or	1067
(c) of this section, the commission shall ensure that the benefits	1068
derived for any purpose for which the surcharge is established are	1069
reserved and made available to those that bear the surcharge.	1070
Otherwise, the commission by order shall disapprove the	1071
application.	1072

(2)(a) If the commission modifies and approves an application	1073
under division (C)(1) of this section, the electric distribution	1074
utility may withdraw the application, thereby terminating it, and	1075
may file a new standard service offer under this section or a	1076
standard service offer under section 4928.142 of the Revised Code	1077

(b) If the utility terminates an application pursuant to	1078
division (C)(2)(a) of this section or if the commission	1079
disapproves an application under division (C)(1) of this section,	1080
the commission shall issue such order as is necessary to continue	1081
the utility's most recent standard service offer, along with any	1082
expected increases or decreases in fuel costs from those contained	1083
in that offer, until a subsequent offer is authorized pursuant to	1084
this section or section 4928.142 of the Revised Code,	1085
respectively.	1086

(D) Regarding the rate plan requirement of division (A) of	1087
section 4928.141 of the Revised Code, if an electric distribution	1088
utility that has a rate plan that extends beyond December 31,	1089
2008, files an application under this section for the purpose of	1090
its compliance with division (A) of section 4928.141 of the	1091
Revised Code, that rate plan and its terms and conditions are	1092
hereby incorporated into its proposed electric security plan and	1093
shall continue in effect until the date scheduled under the rate	1094
plan for its expiration, and that portion of the electric	1095
security plan shall not be subject to commission approval or	1096
disapproval under division (C) of this section. However, that	1097
utility may include in its electric security plan under this	1098
section, and the commission may approve, modify and approve, or	1099
disapprove subject to division (C) of this section, provisions	1100
for the incremental recovery or the deferral of any costs that	1101
are not being recovered under the rate plan and that the utility	1102
incurs during that continuation period to comply with section	1103
4928.141, division (B) of section 4928.64, or division (A) of	1104
section 4928.66 of the Revised Code.	1105

(E) If an electric security plan approved under division (C)	1106
of this section, except one withdrawn by the utility as authorized	1107
under that division, has a term, exclusive of phase-ins or	1108
deferrals, that exceeds three years from the effective date of the	1109
plan, the commission shall test the plan in the fourth year, and	1110
if applicable, every fourth year thereafter, to determine whether	1111
the plan, including its then-existing pricing and all other terms	1112
and conditions, including any deferrals and any future recovery of	1113
deferrals, continues to be favorable in the aggregate and duaring	1114
the remaining term of the plan as compared to the expected	1115
results that would otherwise apply. If the test results are in the	1116
negative, the commission may terminate the electric security	1117
plan, but not until it shall have provided interested parties	1118
with notice and an opportunity to be heard. The commission may	1119
impose such conditions on the plan's termination as it considers	1120
reasonable and necessary to accommodate the transition from an	1121
approved plan to the more advantageous alternative. In the event	1122
of an electric security plan's termination pursuant to this	1123
division, the commission shall permit the continued deferral and	1124
phase-in of any amounts that occurred prior to that termination	1125
and the recovery of those amounts as contemplated under that	1126
electric security plan.	1127

Sec. 4928.144.  The public utilities commission by order may	1128
authorize any just and reasonable phase-in of any electric	1129
distribution utility rate or price established under sections	1130
4928.141 to 4928.143 of the Revised Code, and inclusive of	1131
carrying charges, as the commission considers necessary to ensure	1132
rate or price stability for consumers. If the commission's order	1133
includes such a phase-in, the order shall also provide for the	1134
creation of regulatory assets, by authorizing the deferral of	1135
incurred costs equal to the amount not collected, plus	1136
carrying charges on that amount. Further, the order shall	1137
authorize the collection of those deferrals through a	1138
nonbypassable surcharge on the electric distribution utility's	1139
rates.	1140

Sec. 4928.145.  Nothing in sections 4928.141 to 4928.144 of	1141
the Revised Code precludes or prohibits an electric distribution	1142
utility providing competitive retail electric service to electric	1143
load centers within the certified territory of another such	1144
utility.	1145

Sec. 4928.17.  (A) Except as otherwise provided in sections	1146
4928.31 to 4928.40 of the Revised Code and beginning on the	1147
starting date of competitive retail electric service, no	1148
electric utility shall engage in this state, either directly or	1149
through an affiliate, in the businesses of supplying a	1150
noncompetitive retail electric service and supplying a	1151
competitive retail electric service, or in the businesses of	1152
supplying a noncompetitive retail electric service and supplying	1153
a product or service other than retail electric service, unless	1154
the utility implements and operates under a corporate separation	1155
plan that is approved by the public utilities commission under	1156
this section, is consistent with the policy specified in section	1157
4928.02 of the Revised Code, and achieves all of the following:	1158

(1) The plan provides, at minimum, for the provision of the	1159
competitive retail electric service or the nonelectric product or	1160
service through a fully separated affiliate of the utility, and	1161
the plan includes separate accounting requirements, the code of	1162
conduct as ordered by the commission pursuant to a rule it shall	1163
adopt under division (A) of section 4928.06 of the Revised Code,	1164
and such other measures as are necessary to effectuate the policy	1165
specified in section 4928.02 of the Revised Code.	1166

(2) The plan satisfies the public interest in preventing	1167
unfair competitive advantage and preventing the abuse of market	1168
power.	1169

(3) The plan is sufficient to ensure that the utility will	1170
not extend any undue preference or advantage to any affiliate,	1171
division, or part of its own business engaged in the business of	1172
supplying the competitive retail electric service or nonelectric	1173
product or service, including, but not limited to, utility	1174
resources such as trucks, tools, office equipment, office space,	1175
supplies, customer and marketing information, advertising, billing	1176
and mailing systems, personnel, and training, without compensation	1177
based upon fully loaded embedded costs charged to the affiliate;	1178
and to ensure that any such affiliate, division, or part will not	1179
receive undue preference or advantage from any affiliate,	1180
division, or part of the business engaged in business of supplying	1181
the noncompetitive retail electric service. No such utility,	1182
affiliate, division, or part shall extend such undue preference.	1183
Notwithstanding any other division of this section, a utility's	1184
obligation under division (A)(3) of this section shall be	1185
effective January 1, 2000.	1186

(B) The commission may approve, modify and approve, or	1187
disapprove a corporate separation plan filed with the commission	1188
under division (A) of this section. As part of the code of conduct	1189
required under division (A)(1) of this section, the commission	1190
shall adopt rules pursuant to division (A) of section 4928.06 of	1191
the Revised Code regarding corporate separation and procedures for	1192
plan filing and approval. The rules shall include limitations on	1193
affiliate practices solely for the purpose of maintaining a	1194
separation of the affiliate's business from the business of the	1195
utility to prevent unfair competitive advantage by virtue of that	1196
relationship. The rules also shall include an opportunity for any	1197
person having a real and substantial interest in the corporate	1198
separation plan to file specific objections to the plan and	1199
propose specific responses to issues raised in the objections,	1200
which objections and responses the commission shall address in its	1201
final order. Prior to commission approval of the plan, the	1202
commission shall afford a hearing upon those aspects of the plan	1203
that the commission determines reasonably require a hearing. The	1204
commission may reject and require refiling of a substantially	1205
inadequate plan under this section.	1206

(C) The commission shall issue an order approving or	1207
modifying and approving a corporate separation plan under this	1208
section, to be effective on the date specified in the order, only	1209
upon findings that the plan reasonably complies with the	1210
requirements of division (A) of this section and will provide for	1211
ongoing compliance with the policy specified in section 4928.02 of	1212
the Revised Code. However, for good cause shown, the commission	1213
may issue an order approving or modifying and approving a	1214
corporate separation plan under this section that does not comply	1215
with division (A)(1) of this section but complies with such	1216
functional separation requirements as the commission authorizes to	1217
apply for an interim period prescribed in the order, upon a	1218
finding that such alternative plan will provide for ongoing	1219
compliance with the policy specified in section 4928.02 of the	1220
Revised Code.	1221

(D) Any party may seek an amendment to a corporate separation	1222
plan approved under this section, and the commission, pursuant to	1223
a request from any party or on its own initiative, may order as it	1224
considers necessary the filing of an amended corporate separation	1225
plan to reflect changed circumstances.	1226

(E) Notwithstanding section 4905.20, 4905.21, 4905.46, or	1227
4905.48 of the Revised Code, an(1) No electric utility may divest	1228
itself ofshall sell or transfer before the later of January 1,	1229
2013, or the end of its first, approved market rate offer under	1230
section 4928.142 of the Revised Code, any generating asset at any	1231
timeit wholly or partly owns, without obtaining prior	1232
commission approval, subject to the provisions of Title XLIX of	1233
the Revised Code relating to the transfer of transmission,	1234
distribution, or ancillary service provided by such generating	1235
asset.	1236

(2) No electric distribution utility shall sell or transfer	1237
without prior commission approval any generating asset for which a	1238
nonbypassable surcharge is in effect pursuant to division	1239
(B)(2)(c) of section 4928.143 of the Revised Code.	1240

Sec. 4928.24.  (A) There is hereby created the office of the	1241
federal energy advocate, which shall be an independent division of	1242
the public utilities commission.	1243

(B) The federal energy advocate shall be appointed by the	1244
majority vote of the governor, the speaker of the house of	1245
representatives, and the president of the senate and shall hold	1246
office at their pleasure, except pursuant to such a majority vote.	1247

(1) No person shall be appointed federal energy advocate	1248
unless that person is admitted to the practice of law in this	1249
state and is qualified by knowledge and experience to practice in	1250
regulatory proceedings concerning the price and availability of	1251
electricity in this state.	1252

(2) None of the following shall be appointed federal energy	1253
advocate: a person in the employ of, or acting in an official	1254
capacity with, an electric distribution utility or with any public	1255
utility subject to regulation by the federal energy commission, a	1256
person who actively owns securities issued by any such utility, or	1257
a person who is a candidate for elective public office. If,	1258
subsequent to his or her appointment, the federal energy advocate	1259
becomes the owner of such securities or otherwise has a pecuniary	1260
interest in such a utility, the advocate shall divest that	1261
ownership or interest within a reasonable time or else the	1262
advocate's tenure shall be terminated. The federal energy advocate	1263
shall be treated as a commissioner for the purpose of section	1264
4901.24 of the Revised Code.	1265

(3) The federal energy advocate shall be a resident of this	1266
state and shall devote full time to the duties of advocate and	1267
that office.	1268

(C) Before entering upon the duties of office, the federal	1269
energy advocate shall subscribe to an oath of office, which shall	1270
be filed in the office of the secretary of state.	1271

(D) The federal energy advocate shall be considered a state	1272
officer for the purpose of Section 24 of Article II, Ohio	1273
Constitution.	1274

(E) The salary of the federal energy advocate shall be	1275
determined by majority vote of the governor, the speaker of the	1276
house of representatives, and the president of the senate and set	1277
within pay range 49 as set forth in section 124.152 of the Revised	1278
Code.	1279

(F) The office of the federal energy advocate shall be	1280
located in the office of the public utilities commission, and the	1281
commission shall supply the office of the federal energy advocate	1282
and the advocate, at no charge, with all books, maps, charts, and	1283
such other items as may be necessary for carrying out this section	1284
and section 4928.241 of the Revised Code. For the purpose of	1285
carrying out the advocate's duties, the advocate shall have access	1286
to all books, contracts, records, documents, and papers in the	1287
possession of the commission at any time, subject to the same	1288
limitations on the use or distribution of the information that may	1289
apply to the commission.	1290

(G) Notwithstanding any provision of Chapter 4117. of the	1291
Revised Code, the federal energy advocate may employ and fix the	1292
compensations of such experts, lawyers, engineers, economists,	1293
statisticians, accountants, investigators, and employees in	1294
fiduciary, supervisory, or policy-making positions as are	1295
necessary to carry out this section or section 4928.241 of the	1296
Revised Code or perform the powers and duties conferred or	1297
established for the advocate by law. These employees shall be in	1298
the unclassified civil service, shall not be considered public	1299
employees for the purposes of Chapter 4117. of the Revised Code,	1300
and shall serve at the pleasure of the advocate. The advocate also	1301
may employ such clerical employees, including clerks and	1302
stenographers, as are similarly necessary. These clerical	1303
employees shall be in the classified civil service. All officers,	1304
lawyers, engineers, economists, statisticians, accountants,	1305
investigators, stenographers, clerks, and other employees of the	1306
office of the federal energy advocate and the office's expenses	1307
shall be paid from revenue obtained from all electric distribution	1308
utilities and electric services companies in this state based on	1309
assessments on each in such amount as the advocate shall	1310
determine, and the public utilities commission shall levy, to	1311
provide adequate funding for the office. That revenue shall be	1312
deposited to the credit of the federal energy advocate fund, which	1313
is hereby created in the state treasury, to be used by the office	1314
of the federal energy advocate and the advocate to carry out	1315
powers and duties conferred or established by law.	1316

(H) The federal energy advocate may contract for the services	1317
of technically qualified persons in the area of public utility	1318
matters to obtain assistance in carrying out the duties of the	1319
advocate. Any such person shall be paid from the federal energy	1320
advocate fund.	1321

(I) Nothing in this section or section 4928.12 or 4928.241	1322
of the Revised Code alters the responsibility of the attorney	1323
general with regard to representing the commission in federal	1324
court or agency proceedings.	1325

Sec. 4928.241.  (A) The federal energy advocate may sue or be	1326
sued and has the powers and duties conferred and established under	1327
this section and all necessary powers to carry out the advocate's	1328
duties under this chapter.	1329

(B) Without limitation because of enumeration, the federal	1330
energy advocate:	1331

(1) On behalf of this state for the purpose of promoting and	1332
protecting outcomes that serve the state policy specified in	1333
section 4928.02 of the Revised Code, may institute, intervene in,	1334
or otherwise participate in state, regional, and federal	1335
proceedings, whether before courts or administrative agencies or	1336
regional entities receiving authority from the federal government;	1337

(2) Shall carry out the advocate's duties under section	1338
4928.12 of the Revised Code;	1339

(3) Shall promote coordination and consistency between the	1340
agencies and branches of government of this state with regard to	1341
this state's efforts to secure useful outcomes at the federal	1342
level on issues affecting the price and availability of	1343
electricity within this state;	1344

(4) Shall work with the federal energy regulatory commission,	1345
other federal agencies, the market monitors of regional	1346
transmission organizations, and the regulatory authorities of	1347
other states to identify and remedy anticompetitive structures or	1348
conditions in the electric market, including, but not limited to,	1349
vertical and horizontal market power;	1350

(5) Shall be responsible for monitoring the activities of the	1351
federal energy regulatory commission and other federal agencies	1352
for the purposes specified in this division;	1353

(6) May seek comments and suggestions from the consumers'	1354
counsel, the chairperson of the public utilities commission, and	1355
other persons and may hold technical conferences or workshops to	1356
facilitate the federal energy advocate's efforts to advance such	1357
state policy or to otherwise educate members of the public	1358
regarding federal or regional actions;	1359

(7) Shall have, on behalf of this state, the same rights of	1360
participation, notice, and opportunity to be heard and to request	1361
initiation of proceedings as those rights are available to a state	1362
regulatory authority pursuant to federal law as they and pertain,	1363
directly or indirectly, to issues affecting the price or	1364
availability of electric service within this state;	1365

(8) May meet with and advise members of the Ohio	1366
congressional delegation for the purpose of promoting legislative	1367
and regulatory policy outcomes that serve the state policy	1368
specified in section 4928.02 of the Revised Code;	1369

(9) May, either directly or through the public utilities	1370
commission, exercise the same authority as the commission for the	1371
purpose of examining all books, contracts, records, documents, and	1372
papers of any electric distribution utility, and by subpoena duces	1373
tecum may compel the production thereof or of verified copies.	1374
Upon the request of the advocate, the commission shall compel the	1375
attendance of such witnesses as the advocate requires to give	1376
evidence at such an examination. The advocate's access to and use	1377
of any information obtained through the exercise of authority	1378
under division (B)(9) of this section shall be subject to the	1379
limitations that would apply had the commission conducted the	1380
examination.	1381

(C) The federal energy advocate shall examine the costs and	1382
benefits of the participation by entities that own or control	1383
electric transmission facilities, as defined under federal law and	1384
located in this state, in any regional transmission organization	1385
approved by the federal energy regulatory commission. Within one	1386
hundred eighty days after the effective date of the appointment of	1387
the first federal energy advocate, the advocate shall submit a	1388
public report to the public utilities commission with the	1389
advocate's finding regarding whether continued participation of	1390
those entities is the most effective and efficient means of	1391
advancing the state policy specified in section 4928.02 of the	1392
Revised Code. The report also shall include findings and	1393
recommendations based on the requirements in section 4928.12 of	1394
the Revised Code.	1395

Sec. 4928.61.  (A) There is hereby established in the state	1396
treasury the advanced energy fund, into which shall be deposited	1397
all advanced energy revenues remitted to the director of	1398
development under division (B) of this section, for the exclusive	1399
purposes of funding the advanced energy program created under	1400
section 4928.62 of the Revised Code and paying the program's	1401
administrative costs. Interest on the fund shall be credited to	1402
the fund.	1403

(B) Advanced energy revenues shall include all of the	1404
following:	1405

(1) Revenues remitted to the director after collection by	1406
each electric distribution utility in this state of a temporary	1407
rider on retail electric distribution service rates as such rates	1408
are determined by the public utilities commission pursuant to this	1409
chapter. The rider shall be a uniform amount statewide, determined	1410
by the director of development, after consultation with the public	1411
benefits advisory board created by section 4928.58 of the Revised	1412
Code. The amount shall be determined by dividing an aggregate	1413
revenue target for a given year as determined by the director,	1414
after consultation with the advisory board, by the number of	1415
customers of electric distribution utilities in this state in the	1416
prior year. Such aggregate revenue target shall not exceed more	1417
than fifteen million dollars in any year through 2005 and shall	1418
not exceed more than five million dollars in any year after 2005.	1419
The rider shall be imposed beginning on the effective date of the	1420
amendment of this section by Sub. H.B. 251 of the 126th general	1421
assembly, January 4, 2007, and shall terminate at the end of ten	1422
years following the starting date of competitive retail electric	1423
service or until the advanced energy fund, including interest,	1424
reaches one hundred million dollars, whichever is first.	1425

(2) Revenues from payments, repayments, and collections	1426
under the advanced energy program and from program income;	1427

(3) Revenues remitted to the director after collection by a	1428
municipal electric utility or electric cooperative in this state	1429
upon the utility's or cooperative's decision to participate in the	1430
advanced energy fund;	1431

(4) Revenues from renewable energy compliance payments as	1432
provided under division (C)(1) of section 4928.64 of the Revised	1433
Code;	1434

(5) Revenue from forfeitures under division (C) of section	1435
4928.66 of the Revised Code;	1436

(6) Interest earnings on the advanced energy fund.

1437

(C)(1) Each electric distribution utility in this state shall	1438
remit to the director on a quarterly basis the revenues described	1439
in divisions (B)(1) and (2) of this section. Such remittances	1440
shall occur within thirty days after the end of each calendar	1441
quarter.	1442

(2) Each participating electric cooperative and participating	1443
municipal electric utility shall remit to the director on a	1444
quarterly basis the revenues described in division (B)(3) of this	1445
section. Such remittances shall occur within thirty days after	1446
the end of each calendar quarter. For the purpose of division	1447
(B)(3) of this section, the participation of an electric	1448
cooperative or municipal electric utility in the energy efficiency	1449
revolving loan program as it existed immediately prior to the	1450
effective date of the amendment of this section by Sub. H.B. 251	1451
of the 126th general assembly, January 4, 2007, does not	1452
constitute a decision to participate in the advanced energy fund	1453
under this section as so amended.	1454

(3) All remittances under divisions (C)(1) and (2) of this	1455
section shall continue only until the end of ten years following	1456
the starting date of competitive retail electric service or until	1457
the advanced energy fund, including interest, reaches one hundred	1458
million dollars, whichever is first.	1459

(D) Any moneys collected in rates for non-low-income customer	1460
energy efficiency programs, as of October 5, 1999, and not	1461
contributed to the energy efficiency revolving loan fund	1462
authorized under this section prior to the effective date of its	1463
amendment by Sub. H.B. 251 of the 126th general assembly, January	1464
4, 2007, shall be used to continue to fund cost-effective,	1465
residential energy efficiency programs, be contributed into the	1466
universal service fund as a supplement to that required under	1467
section 4928.53 of the Revised Code, or be returned to ratepayers	1468
in the form of a rate reduction at the option of the affected	1469
electric distribution utility.	1470

Sec. 4928.621. (A) Any Edison technology center in this state	1471
is eligible to apply for and receive assistance pursuant to	1472
section 4928.62 of the Revised Code for the purposes of creating	1473
an advanced energy manufacturing center in this state that will	1474
provide for the exchange of information and expertise regarding	1475
advanced energy, assisting with the design of advanced energy	1476
projects, developing workforce training programs for such	1477
projects, and encouraging investment in advanced energy	1478
manufacturing technologies for advanced energy products and	1479
investment in sustainable manufacturing operations that create	1480
high-paying jobs in this state.	1481

(B) A university or group of universities in this state that	1482
conducts research on any advanced energy resource as defined in	1483
section 4928.64 of the Revised Code is eligible to apply for and	1484
receive assistance pursuant to section 4928.62 of the Revised Code	1485
for the purpose of encouraging research in this state that is	1486
directed at innovation in or the refinement of those resources or	1487
for the purpose of educational outreach regarding those resources	1488
and, to that end, shall use that assistance to establish such a	1489
program of research or education outreach. Any such educational	1490
outreach shall be directed at an increase in, innovation	1491
regarding, or refinement of access by or of application or	1492
understanding of businesses and consumers in this state	1493
regarding, advanced energy resources.	1494

(C) Any independent group located in this state the express	1495
objective of which is to educate small businesses in this state	1496
regarding renewable energy resources and energy efficiency	1497
programs, or any small business located in this state electing to	1498
utilize an advanced energy project or participate in an energy	1499
efficiency program, is eligible to apply for and receive	1500
assistance pursuant to section 4928.62 of the Revised Code.	1501

(D) Nothing in this section shall be construed as limiting	1502
the eligibility of any qualifying entity to apply for or receive	1503
assistance pursuant to section 4928.62 of the Revised Code.	1504

Sec. 4928.64. (A)(1) As used in sections 4928.64 and 4928.65	1505
of the Revised Code, "alternative energy resource" means an	1506
advanced energy resource that is located in this state and has a	1507
placed-in-service date on or after January 1, 1998; a renewable	1508
energy resource that is located within this state, including a	1509
facility located at a dam on a river within or bordering this	1510
state or an adjoining state, and that has a placed-in-service	1511
date on or after January 1, 1998; or a mercantile customer-sited	1512
advance energy resource or renewable energy resource, whether new	1513
or existing, that the mercantile customer commits for integration	1514
into the electric distribution utility's demand-response, energy	1515
efficiency, or peak demand reduction programs as provided under	1516
division (B)(2)(b) of section 4928.66 of the Revised Code,	1517
including, but not limited to, any of the following:	1518

(a) A resource that has the effect of improving the	1519
relationship between real and reactive power;	1520

(b) A resource that makes efficient use of waste heat or	1521
other thermal capabilities owned or controlled by a mercantile	1522
customer;	1523

(c) Storage technology that allows a mercantile customer more	1524
flexibility to modify its demand or load and usage	1525
characteristics.	1526

(d) Electric generation equipment owned or controlled by a	1527
mercantile customer that uses an advanced energy resource or	1528
renewable energy resource;	1529

(e) Any advanced energy resource or renewable energy resource	1530
of the mercantile customer that can be utilized effectively as	1531
part of any advanced energy resource plan of an electric	1532
distribution utility and would otherwise qualify as an alternative	1533
energy resource if it were utilized directly by an electric	1534
distribution utility.	1535

(2) For the purpose of this section and as it considers	1536
appropriate, the public utilities commission may classify any new	1537
technology as such an advanced energy resource or a renewable	1538
energy resource.	1539

(B) By 2025 and thereafter, an electric distribution utility	1540
shall provide from alternative energy resources, including, at	1541
its discretion, alternative energy resources obtained pursuant to	1542
an electricity supply contract, a portion of the electricity	1543
supply required for its standard service offer under section	1544
4928.141 of the Revised Code, and an electric services company	1545
shall provide a portion of its electricity supply for retail	1546
consumers in this state from alternative energy resources,	1547
including, at its discretion, alternative energy resources	1548
obtained pursuant to an electricity supply contract. That portion	1549
shall equal twenty-five per cent of the total number of	1550
kilowatt hours of electricity sold by the subject utility or	1551
company to any and all retail electric consumers whose electric	1552
load centers are served by that utility and are located within	1553
the utility's certified territory or, in the case of an	1554
electric services company, are served by the company and are	1555
located within this state. However, nothing in this section	1556
precludes a utility or company from providing a greater	1557
percentage. The baseline for a utility's or company's compliance	1558
with the alternative energy resource requirements of this section	1559
shall be the average of such total kilowatt hours it sold in the	1560
preceding three calendar years, except that the commission may	1561
reduce a utility's or company's baseline to adjust for new	1562
economic growth in the utility's certified territory or, in the	1563
case of an electric services company, in the company's service	1564
area in this state.	1565

Of the alternative energy resources implemented by the	1566
subject utility or company by 2025 and thereafter:	1567

(1) Half may be generated from advanced energy resources;

1568

(2) At least half shall be generated from renewable energy	1569
resources, including one per cent from solar energy resources, in	1570
accordance with the following benchmarks:	1571

By end of year	Renewable energy resources	Solar energy resources		1572
2009	0.25%	.005%		1573
2010	0.50%	.025%		1574
2011	1%	.08%		1575
2012	1.5%	.15%		1576
2013	2%	.2%		1577
2014	2.5%	.25%		1578
2015	3.5%	.3%		1579
2016	4.5%	.35%		1580
2017	5.5%	.4%		1581
2018	6.5%	.45%		1582
2019	7.5%	.5%		1583
2020	8.5%	.6%		1584
2021	9.5%	.7%		1585
2022	10.5%	.8%		1586
2023	11.5%	.9%		1587
2024 and each calendar year thereafter	12.5%	1%		1588

(3) At least one-half of the renewable energy resources	1589
implemented by the utility or company shall be met through	1590
facilities located in this state; the remainder shall be met with	1591
resources that can be shown to be deliverable into this state.	1592

(C)(1) The commission annually shall review an electric	1593
distribution utility's or electric services company's compliance	1594
with the most recent applicable benchmark under division (B)(2)	1595
of this section and, in the course of that review, shall identify	1596
any undercompliance or noncompliance of the utility or company	1597
that it determines is weather-related, related to equipment or	1598
resource shortages for advanced energy or renewable energy	1599
resources as applicable, or is otherwise outside the utility's or	1600
company's control. If the commission determines, after notice	1601
and opportunity for hearing, and based upon its findings in that	1602
review regarding avoidable undercompliance or noncompliance, that	1603
the utility or company has failed to comply with any such	1604
benchmark, the commission shall impose a renewable energy	1605
compliance payment on the utility or company.	1606

(a) The compliance payment pertaining to the solar energy	1607
resource benchmarks under division (B)(2) of this section shall be	1608
an amount per megawatt hour of undercompliance or noncompliance in	1609
the period under review, starting at four hundred fifty dollars	1610
for 2009, four hundred dollars for 2010 and 2011, and similarly	1611
reduced every two years thereafter through 2024 by fifty dollars,	1612
to a minimum of fifty dollars.	1613

(b) The compliance payment pertaining to the renewable	1614
energy resource benchmarks under division (B)(2) of this section	1615
shall equal the number of additional renewable energy credits	1616
that the electric distribution utility or electric services	1617
company would have needed to comply with the applicable	1618
benchmark in the period under review times an amount that shall	1619
begin at forty-five dollars and shall be adjusted annually by the	1620
commission to reflect any change in the consumer price index as	1621
defined in section 101.27 of the Revised Code, but shall not be	1622
less than forty-five dollars.	1623

(c) The compliance payment shall not be passed through by the	1624
electric distribution utility or electric services company to	1625
consumers. The compliance payment shall be remitted to the	1626
commission, for deposit to the credit of the advanced energy fund	1627
created under section 4928.61 of the Revised Code. Payment of the	1628
compliance payment shall be subject to such collection and	1629
enforcement procedures as apply to the collection of a	1630
forfeiture under sections 4905.55 to 4905.60 and 4905.64 of the	1631
Revised Code.	1632

(2) The commission shall establish a process to provide for	1633
at least an annual review of the alternative energy resource	1634
market in this state and in the service territories of the	1635
regional transmission organizations that manage transmission	1636
systems located in this state. The commission shall use the	1637
results of this study to identify any needed changes to the	1638
amount of the renewable energy compliance payment specified	1639
under divisions (C)(1)(a) and (b) of this section.	1640
Specifically, the commission may increase the amount to ensure	1641
that payment of compliance payments is not used to achieve	1642
compliance with this section in lieu of actually acquiring or	1643
realizing energy derived from renewable energy resources.	1644
However, if the commission finds that the amount of the	1645
compliance payment should be otherwise changed, the commission	1646
shall present this finding to the general assembly for	1647
legislative enactment.	1648

(D)(1) The commission annually shall submit to the general	1649
assembly in accordance with section 101.68 of the Revised Code a	1650
report describing the compliance of electric distribution	1651
utilities and electric services companies with division (B) of	1652
this section and any strategy for utility and company compliance	1653
or for encouraging the use of alternative energy resources in	1654
supplying this state's electricity needs in a manner that	1655
considers available technology, costs, job creation, and	1656
economic impacts. The commission shall allow and consider	1657
public comments on the report prior to its submission to the	1658
general assembly. Nothing in the report shall be binding on any	1659
person, including any utility or company for the purpose of its	1660
compliance with any benchmark under division (B) of this	1661
section, or the enforcement of that provision under division	1662
(C) of this section.	1663

(2) The governor, in consultation with the commission	1664
chairperson, shall appoint an alternative energy advisory	1665
committee. The committee shall examine available technology for	1666
and related timetables, goals, and costs of the alternative	1667
energy resource requirements under division (B) of this section	1668
and shall submit to the commission a semiannual report of its	1669
recommendations.	1670

(E) All costs incurred by an electric distribution utility	1671
in complying with the requirements of this section shall be	1672
bypassable by any consumer that has exercised choice of supplier	1673
under section 4928.03 of the Revised Code.	1674

Sec. 4928.65. An electric distribution utility or electric	1675
services company may use renewable energy credits any time in the	1676
five calendar years following the date of their purchase or	1677
acquisition from any entity, including a mercantile customer, for	1678
the purpose of complying with the renewable energy and solar	1679
energy resource requirements of division (B)(2) of section	1680
4928.64 of the Revised Code. The public utilities commission	1681
shall adopt rules specifying that one unit of credit shall	1682
equal one megawatt hour of electricity derived from	1683
renewable energy resources. The rules also shall provide for	1684
this state a system of registering renewable energy credits	1685
by specifying which of any generally available registries	1686
shall be used for that purpose and not by creating a	1687
registry. Renewable energy credits obtained for the purpose of	1688
meeting Ohio, voluntary, green pricing programs shall not be	1689
counted toward that compliance.	1690

Sec. 4928.66. (A)(1)(a) Beginning in 2009, an electric	1691
distribution utility shall implement energy efficiency programs	1692
that achieve energy savings equivalent to at least three-tenths	1693
of one per cent of the total, annual average, and normalized	1694
kilowatt-hour sales of the electric distribution utility during	1695
the preceding three calendar years to customers in this state. The	1696
savings requirement, using such a three-year average, shall	1697
increase to an additional five-tenths of one per cent in 2010,	1698
seven-tenths of one per cent in 2011, eight-tenths of one per	1699
cent in 2012, nine-tenths of one per cent in 2013, one per cent	1700
from 2014 to 2018, and two per cent each year thereafter,	1701
achieving a cumulative, annual energy savings in excess of	1702
twenty-two per cent by the end of 2025.	1703

(b) Beginning in 2009, an electric distribution utility shall	1704
implement peak demand reduction programs designed to achieve a one	1705
per cent reduction in peak demand in 2009 and an additional	1706
seventy-five hundredths of one per cent reduction each year	1707
through 2018. In 2018, the standing committees in the house of	1708
representatives and the senate primarily dealing with energy	1709
issues shall make recommendations to the general assembly	1710
regarding future peak demand reduction targets.	1711

(2) For the purposes of divisions (A)(1)(a) and (b) of this	1712
section:	1713

(a) The baseline for energy savings under division (A)(1)(a)	1714
of this section shall be the average of the total kilowatt hours	1715
the electric distribution utility sold in the preceding three	1716
calendar years, and the baseline for a peak demand reduction under	1717
division (A)(1)(b) of this section shall be the average peak	1718
demand on the utility in the preceding three calendar years,	1719
except that the commission may reduce either baseline to adjust	1720
for new economic growth in the utility's certified territory.	1721

(b) Compliance with those divisions shall be measured by	1722
including the effects of all demand-response programs for	1723
mercantile customers of the subject electric distribution utility	1724
or electric services company and all such mercantile	1725
customer-sited energy efficiency and peak demand reduction	1726
programs, adjusted upward by the appropriate loss factors. Any	1727
mechanism designed to recover the cost of energy efficiency and	1728
peak demand reduction programs under divisions (A)(1)(a) and (b)	1729
of this section may exempt mercantile customers that commit their	1730
demand-response or other customer-sited capabilities, whether	1731
existing or new, for integration into the electric distribution	1732
utility's demand-response, energy efficiency, or peak demand	1733
reduction programs, if the commission determines that that	1734
exemption reasonably encourages such customers to commit those	1735
capabilities to those programs. If a mercantile customer makes	1736
such existing or new demand-response, energy efficiency, or peak	1737
demand reduction capability available to an electric distribution	1738
utility pursuant to division (A)(2)(b) of this section, the	1739
electric utility's baseline under division (A)(2)(a) of this	1740
section shall be adjusted to exclude the effects of all such	1741
demand-response, energy efficiency, or peak demand reduction	1742
programs that may have existed during the period used to establish	1743
the baseline. The baseline also shall be normalized for changes in	1744
numbers of customers, sales, weather, peak demand, and other	1745
appropriate factors so that the compliance measurement is not	1746
unduly influenced by factors outside the control of the electric	1747
distribution utility.	1748

(c) Programs implemented by a utility may include	1749
demand-response programs, customer-sited programs, and	1750
transmission and distribution infrastructure improvements that	1751
reduce line losses.	1752

(d) No programs or improvements described in division	1753
(A)(2)(c) of this section shall conflict with any statewide	1754
building code adopted by the board of building standards.	1755

(B) In accordance with rules it shall adopt, the public	1756
utilities commission shall produce and docket at the commission an	1757
annual report containing the results of its verification of the	1758
annual levels of energy usage and peak demand reductions achieved	1759
by each electric distribution utility pursuant to division (A) of	1760
this section. A copy of the report shall be provided to the	1761
consumers' counsel.	1762

(C) If the commission determines, after notice and	1763
opportunity for hearing and based upon its report under division	1764
(B) of this section, that an electric distribution utility has	1765
failed to comply with an energy usage or peak demand reduction	1766
required by division (A) of this section, the commission shall	1767
assess a forfeiture on the utility as provided under sections	1768
4905.55 to 4905.60 and 4905.64 of the Revised Code, either in	1769
the amount, per day per undercompliance or noncompliance,	1770
relative to the period of the report, equal to that prescribed	1771
for noncompliances under section 4905.54 of the Revised Code,	1772
or in an amount equal to the then existing market value of one	1773
renewable energy credit per megawatt hour of undercompliance or	1774
noncompliance. Revenue from any forfeiture assessed under this	1775
division shall be deposited to the credit of the advanced energy	1776
fund created under section 4928.61 of the Revised Code.	1777

(D) The commission may establish rules regarding the content	1778
of an application by an electric distribution utility for	1779
commission approval of a revenue decoupling mechanism under this	1780
division. Such an application shall not be considered an	1781
application to increase rates and may be included as part of a	1782
proposal to establish, continue, or expand energy efficiency or	1783
conservation programs. The commission by order may approve an	1784
application under this division if it determines both that the	1785
revenue decoupling mechanism provides for the recovery of revenue	1786
that otherwise may be foregone by the utility as a result of or in	1787
connection with the implementation by the electric distribution	1788
utility of any energy efficiency or energy conservation programs	1789
and reasonably aligns the interests of the utility and of its	1790
customers in favor of those programs.	1791

(E) The commission additionally shall adopt rules that	1792
require an electric distribution utility to provide a customer	1793
upon request with two years' consumption data in an accessible	1794
form.	1795

Sec. 4928.67.  (A)(1) Beginning on the starting date of	1796
competitive retail electric service, a retail electric service	1797
provider in this stateExcept as provided in division (A)(2) of	1798
this section, an electric utility shall develop a standard	1799
contract or tariff providing for net energy metering., subject to	1800
both of the following:	1801

(a) Any time that the total rated generating capacity used	1802
by customer-generators, exclusive of such capacity used by any	1803
hospital customer-generator that is a party to or subject to a	1804
contract or tariff under division (A)(2) of this section, is less	1805
than one per cent of the provider'sutility's aggregate customer	1806
peak demand in this state, the providerutility shall make this	1807
contract or tariff available to customer-generators, upon request	1808
and on a first-come, first-served basis. The	1809

(b) The contract or tariff shall be identical in rate	1810
structure, all retail rate components, and any monthly charges,	1811
to the contract or tariff to which the same customer would be	1812
assigned if that customer were not a customer-generator.	1813
Transmission and distribution charges in the contract or tariff	1814
shall apply to the flow of electricity both to the customer and	1815
from the customer to the electric utility.	1816

(2) An electric utility shall also develop a separate	1817
standard contract or tariff providing for net energy metering for	1818
a hospital, as defined in section 3701.01 of the Revised Code,	1819
that is also a customer-generator, subject to all of the	1820
following:	1821

(a) No limitation, including that in division (A)(1)(a) of	1822
this section, shall apply regarding the availability of the	1823
contract or tariff to such hospital customer-generators.	1824

(b) The contract or tariff shall be based both upon the rate	1825
structure, rate components, and any charges to which the hospital	1826
would otherwise be assigned if the hospital were not a	1827
customer-generator and upon the market value of the	1828
customer-generated electricity at the time it is generated.	1829
Transmission and distribution charges in the contract or tariff	1830
shall apply to the flow of electricity both to the customer and	1831
from the customer to the electric utility.	1832

(c) The contact or tariff shall allow the hospital	1833
customer-generator to operate its electric generating facilities	1834
individually or collectively without any wattage limitation on	1835
size.	1836

(2)(B)(1) Net metering under this section shall be	1837
accomplished using a single meter capable of registering the flow	1838
of electricity in each direction. If its existing electrical	1839
meter is not capable of measuring the flow of electricity in two	1840
directions, the customer-generator shall be responsible for all	1841
expenses involved in purchasing and installing a meter that is	1842
capable of measuring electricity flow in two directions.	1843

(3) Such an(2) The electric service providerutility, at its	1844
own expense and with the written consent of the	1845
customer-generator, may install one or more additional meters to	1846
monitor the flow of electricity in each direction.	1847

(B)(3) Consistent with the other provisions of this section,	1848
the measurement of net electricity supplied or generated shall be	1849
calculated in the following manner:	1850

(1)(a) The electric service providerutility shall measure	1851
the net electricity produced or consumed during the billing	1852
period, in accordance with normal metering practices.	1853

(2)(b) If the electricity supplied by the electric service	1854
providerutility exceeds the electricity generated by the	1855
customer-generator and fed back to the electric service provider	1856
utility during the billing period, the customer-generator shall	1857
be billed for the net electricity supplied by the electric	1858
service providerutility, in accordance with normal metering	1859
practices. If electricity is provided to the electric service	1860
providerutility, the credits for that electricity shall appear	1861
in the next billing cycle.	1862

(C)(1)(4) A net metering system used by a customer-generator	1863
shall meet all applicable safety and performance standards	1864
established by the national electrical code, the institute of	1865
electrical and electronics engineers, and underwriters	1866
laboratories.	1867

(2)(C) The public utilities commission shall adopt rules	1868
relating to additional control and testing requirements for	1869
customer-generators whichthat the commission determines are	1870
necessary to protect public and worker safety and system	1871
reliability.	1872

(D) An electric service providerutility shall not require a	1873
customer-generator whose net metering system meets the standards	1874
and requirements provided for in divisions (B)(4) and (C)(1) and	1875
(D) of this section to do any of the following:	1876

(1) Comply with additional safety or performance standards;

1877

(2) Perform or pay for additional tests;

1878

(3) Purchase additional liability insurance.

1879

Sec. 4928.68.  To the extent permitted by federal law, the	1880
public utilities commission shall adopt rules establishing	1881
greenhouse gas emission reporting requirements, including	1882
participation in the climate registry, and carbon control	1883
planning requirements for each electric generating facility	1884
that is located in this state, is owned or operated by a public	1885
utility that is subject to the commission's jurisdiction, and	1886
emits greenhouse gases, including facilities in operation on	1887
the effective date of this section.	1888

Sec. 4929.01.  As used in this chapter:

1889

(A) "Alternative rate plan" means a method, alternate to the	1890
method of section 4909.15 of the Revised Code, for establishing	1891
rates and charges, under which rates and charges may be	1892
established for a commodity sales service or ancillary service	1893
that is not exempt pursuant to section 4929.04 of the Revised Code	1894
or for a distribution service. Alternative rate plans may	1895
include, but are not limited to, methods that provide adequate and	1896
reliable natural gas services and goods in this state; minimize	1897
the costs and time expended in the regulatory process; tend to	1898
assess the costs of any natural gas service or goods to the	1899
entity, service, or goods that cause such costs to be incurred;	1900
afford rate stability; promote and reward efficiency, quality of	1901
service, or cost containment by a natural gas company; or provide	1902
sufficient flexibility and incentives to the natural gas industry	1903
to achieve high quality, technologically advanced, and readily	1904
available natural gas services and goods at just and reasonable	1905
rates and charges; or establish revenue decoupling mechanisms.	1906
Alternative rate plans also may include, but are not limited to,	1907
automatic adjustments based on a specified index or changes in a	1908
specified cost or costs.	1909

(B) "Ancillary service" means a service that is ancillary to	1910
the receipt or delivery of natural gas to consumers, including,	1911
but not limited to, storage, pooling, balancing, and transmission.	1912

(C) "Commodity sales service" means the sale of natural gas	1913
to consumers, exclusive of any distribution or ancillary service.	1914

(D) "Comparable service" means any regulated service or goods	1915
whose availability, quality, price, terms, and conditions are the	1916
same as or better than those of the services or goods that the	1917
natural gas company provides to a person with which it is	1918
affiliated or which it controls, or, as to any consumer, that the	1919
natural gas company offers to that consumer as part of a bundled	1920
service that includes both regulated and exempt services or goods.	1921

(E) "Consumer" means any person or association of persons	1922
purchasing, delivering, storing, or transporting, or seeking to	1923
purchase, deliver, store, or transport, natural gas, including	1924
industrial consumers, commercial consumers, and residential	1925
consumers, but not including natural gas companies.	1926

(F) "Distribution service" means the delivery of natural gas	1927
to a consumer at the consumer's facilities, by and through the	1928
instrumentalities and facilities of a natural gas company,	1929
regardless of the party having title to the natural gas.	1930

(G) "Natural gas company" means a natural gas company, as	1931
defined in section 4905.03 of the Revised Code, that is a public	1932
utility as defined in section 4905.02 of the Revised Code and	1933
excludes a retail natural gas supplier.	1934

(H) "Person," except as provided in division (N) of this	1935
section, has the same meaning as in section 1.59 of the Revised	1936
Code, and includes this state and any political subdivision,	1937
agency, or other instrumentality of this state and includes the	1938
United States and any agency or other instrumentality of the	1939
United States.	1940

(I) "Billing or collection agent" means a fully independent	1941
agent, not affiliated with or otherwise controlled by a retail	1942
natural gas supplier or governmental aggregator subject to	1943
certification under section 4929.20 of the Revised Code, to the	1944
extent that the agent is under contract with such supplier or	1945
aggregator solely to provide billing and collection for	1946
competitive retail natural gas service on behalf of the supplier	1947
or aggregator.	1948

(J) "Competitive retail natural gas service" means any retail	1949
natural gas service that may be competitively offered to consumers	1950
in this state as a result of revised schedules approved under	1951
division (C) of section 4929.29 of the Revised Code, a rule or	1952
order adopted or issued by the public utilities commission under	1953
Chapter 4905. of the Revised Code, or an exemption granted by the	1954
commission under sections 4929.04 to 4929.08 of the Revised Code.	1955

(K) "Governmental aggregator" means either of the following:

1956

(1) A legislative authority of a municipal corporation, a	1957
board of township trustees, or a board of county commissioners	1958
acting exclusively under section 4929.26 or 4929.27 of the Revised	1959
Code as an aggregator for the provision of competitive retail	1960
natural gas service;	1961

(2) A municipal corporation acting exclusively under Section	1962
4 of Article XVIII, Ohio Constitution, as an aggregator for the	1963
provision of competitive retail natural gas service.	1964

(L)(1) "Mercantile customer" means a customer that consumes,	1965
other than for residential use, more than five hundred thousand	1966
cubic feet of natural gas per year at a single location within	1967
this state or consumes natural gas, other than for residential	1968
use, as part of an undertaking having more than three locations	1969
within or outside of this state. "Mercantile customer" excludes a	1970
customer for which a declaration under division (L)(2) of this	1971
section is in effect pursuant to that division.	1972

(2) A not-for-profit customer that consumes, other than for	1973
residential use, more than five hundred thousand cubic feet of	1974
natural gas per year at a single location within this state or	1975
consumes natural gas, other than for residential use, as part of	1976
an undertaking having more than three locations within or outside	1977
this state may file a declaration under division (L)(2) of this	1978
section with the public utilities commission. The declaration	1979
shall take effect upon the date of filing, and by virtue of the	1980
declaration, the customer is not a mercantile customer for the	1981
purposes of this section and sections 4929.20 to 4929.29 of the	1982
Revised Code or the purposes of a governmental natural gas	1983
aggregation or arrangement or other contract entered into after	1984
the declaration's effective date for the supply or arranging of	1985
the supply of natural gas to the customer to a location within	1986
this state. The customer may file a rescission of the declaration	1987
with the commission at any time. The rescission shall not affect	1988
any governmental natural gas aggregation or arrangement or other	1989
contract entered into by the customer prior to the date of the	1990
filing of the rescission and shall have effect only with respect	1991
to any subsequent such aggregation or arrangement or other	1992
contract. The commission shall prescribe rules under section	1993
4929.10 of the Revised Code specifying the form of the declaration	1994
or a rescission and procedures by which a declaration or	1995
rescission may be filed.	1996

(M) "Retail natural gas service" means commodity sales	1997
service, ancillary service, natural gas aggregation service,	1998
natural gas marketing service, or natural gas brokerage service.	1999

(N) "Retail natural gas supplier" means any person, as	2000
defined in section 1.59 of the Revised Code, that is engaged on a	2001
for-profit or not-for-profit basis in the business of supplying or	2002
arranging for the supply of a competitive retail natural gas	2003
service to consumers in this state that are not mercantile	2004
customers. "Retail natural gas supplier" includes a marketer,	2005
broker, or aggregator, but excludes a natural gas company, a	2006
governmental aggregator as defined in division (K)(1) or (2) of	2007
this section, an entity described in division (B) or (C) of	2008
section 4905.02 of the Revised Code, or a billing or collection	2009
agent, and excludes a producer or gatherer of gas to the extent	2010
such producer or gatherer is not a natural gas company under	2011
section 4905.03 of the Revised Code.	2012

(O) "Revenue decoupling mechanism" means a rate design or	2013
other cost recovery mechanism that provides recovery of the fixed	2014
costs of service and a fair and reasonable rate of return,	2015
irrespective of system throughput or volumetric sales.	2016

Sec. 4929.02.  (A) It is the policy of this state to,	2017
throughout this state:	2018

(1) Promote the availability to consumers of adequate,	2019
reliable, and reasonably priced natural gas services and goods;	2020

(2) Promote the availability of unbundled and comparable	2021
natural gas services and goods that provide wholesale and retail	2022
consumers with the supplier, price, terms, conditions, and quality	2023
options they elect to meet their respective needs;	2024

(3) Promote diversity of natural gas supplies and suppliers,	2025
by giving consumers effective choices over the selection of those	2026
supplies and suppliers;	2027

(4) Encourage innovation and market access for cost-effective	2028
supply- and demand-side natural gas services and goods;	2029

(5) Encourage cost-effective and efficient access to	2030
information regarding the operation of the distribution systems of	2031
natural gas companies in order to promote effective customer	2032
choice of natural gas services and goods;	2033

(6) Recognize the continuing emergence of competitive natural	2034
gas markets through the development and implementation of flexible	2035
regulatory treatment;	2036

(7) Promote an expeditious transition to the provision of	2037
natural gas services and goods in a manner that achieves effective	2038
competition and transactions between willing buyers and willing	2039
sellers to reduce or eliminate the need for regulation of natural	2040
gas services and goods under Chapters 4905. and 4909. of the	2041
Revised Code;	2042

(8) Promote effective competition in the provision of natural	2043
gas services and goods by avoiding subsidies flowing to or from	2044
regulated natural gas services and goods;	2045

(9) Ensure that the risks and rewards of a natural gas	2046
company's offering of nonjurisdictional and exempt services and	2047
goods do not affect the rates, prices, terms, or conditions of	2048
nonexempt, regulated services and goods of a natural gas company	2049
and do not affect the financial capability of a natural gas	2050
company to comply with the policy of this state specified in this	2051
section;	2052

(10) Facilitate the state's competitiveness in the global	2053
economy;	2054

(11) Facilitate additional choices for the supply of natural	2055
gas for residential consumers, including aggregation;	2056

(12) Promote an alignment of natural gas company interests	2057
with consumer interest in energy efficiency and energy	2058
conservation.	2059

(B) The public utilities commission and the office of the	2060
consumers' counsel shall follow the policy specified in this	2061
section in carrying outexercising their respective authorities	2062
relative to sections 4929.03 to 4929.30 of the Revised Code.	2063

(C) Nothing in Chapter 4929. of the Revised Code shall be	2064
construed to alter the public utilities commission's construction	2065
or application of division (A)(6) of section 4905.03 of the	2066
Revised Code.	2067

Sec. 4929.051. An alternative rate plan filed by a natural	2068
gas company under section 4929.05 of the Revised Code and	2069
proposing a revenue decoupling mechanism may be an application not	2070
for an increase in rates if the rates, joint rates, tolls,	2071
classifications, charges, or rentals are based upon the billing	2072
determinants and revenue requirement authorized by the public	2073
utilities commission in the company's most recent rate case	2074
proceeding and the plan also establishes, continues, or expands an	2075
energy efficiency or energy conservation program.	2076

Section 2.  That existing sections 1315.28, 4928.01,	2077
4928.02, 4928.05, 4928.09, 4928.12, 4928.14, 4928.17, 4928.61,	2078
4928.67, 4929.01, and 4929.02 and sections 4928.41, 4928.42,	2079
4928.431, and 4928.44 of the Revised Code are hereby repealed.	2080

Section 3. Nothing in this act affects the legal validity or	2081
the force and effect of an electric distribution utility's rate	2082
plan, as defined in section 4928.01 of the Revised Code as amended	2083
by this act, or the plan's terms and conditions, including any	2084
provisions regarding cost recovery.	2085

Section 4. Section 4929.051 of the Revised Code, as enacted	2086
by this act, shall not be applied in favor of a claim or finding	2087
that an application described in that section but submitted to the	2088
Public Utilities Commission prior to the act's effective date is	2089
an application to increase rates.	2090