As Reported by 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 

Representatives Hagan, J., Blessing, Coley, Jones, Uecker 

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A BILL

To amend sections 4905.31, 4928.01, 4928.02,

1

4928.05, 4928.09, 4928.14, 4928.17, 4928.20,

2

4928.31, 4928.34, 4928.35, 4928.61, 4928.67,

3

4929.01, and 4929.02; to enact sections 9.835,

4

4928.141, 4928.142, 4928.143, 4928.144,

5

4928.145, 4928.146, 4928.151, 4928.24, 4928.621,

6

4928.64, 4928.65, 4928.66, 4928.68, 4928.69, and

7

4929.051; and to repeal sections 4928.41,

8

4928.42, 4928.431, and 4928.44 of the Revised

9

Code to revise state energy policy to address

10

electric service price regulation, establish

11

alternative energy benchmarks for electric

12

distribution utilities and electric services

13

companies, provide for the use of renewable

14

energy credits, establish energy efficiency

15

standards for electric distribution utilities,

16

require greenhouse gas emission reporting and

17

carbon dioxide control planning for

18

utility-owned generating facilities, authorize

19

energy price risk management contracts, and

20

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 4905.31, 4928.01, 4928.02, 4928.05,	24
4928.09, 4928.14, 4928.17, 4928.20, 4928.31, 4928.34, 4928.35,	25
4928.61, 4928.67, 4929.01, and 4929.02 be amended and sections	26
9.835, 4928.141, 4928.142, 4928.143, 4928.144, 4928.145,	27
4928.146, 4928.151, 4928.24, 4928.621, 4928.64, 4928.65, 4928.66,	28
4928.68, 4928.69, and 4929.051 of the Revised Code be enacted	29
to read as follows:	30

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

31

(1) "Energy price risk management contract" means a contract	32
that mitigates for the term of the contract the price volatility	33
of energy sources, including, but not limited to, natural gas,	34
gasoline, oil, and diesel fuel, and that is a budgetary and	35
financial tool only and not a contract for the procurement of an	36
energy source.	37

(2) "Political subdivision" means a county, city, village,	38
township, park district, or school district.	39

(3) "State entity" means the general assembly, the supreme	40
court, the court of claims, the office of an elected state	41
officer, or a department, bureau, board, office, commission,	42
agency, institution, or other instrumentality of this state	43
established by the constitution or laws of this state for the	44
exercise of any function of state government, but excludes a	45
political subdivision, an institution of higher education, the	46
public employees retirement system, the Ohio police and fire	47
pension fund, the state teachers retirement system, the school	48
employees retirement system, the state highway patrol retirement	49
system, or the city of Cincinnati retirement system.	50

(4) "State official" means the elected or appointed official,	51
or that person's designee, charged with the management of a state	52
entity.	53

(B) If it determines that doing so is in the best interest of	54
the state entity or the political subdivision, and subject to,	55
respectively, state or local appropriation to pay amounts due, a	56
state official or the legislative or other governing authority of	57
a political subdivision may enter into an energy price risk	58
management contract. The term of the contract shall not extend	59
beyond the end of the fiscal year in which the contract is	60
entered into. Money received pursuant to such a contract entered	61
into by a state official shall be deposited to the credit of the	62
general revenue fund of this state, and, unless otherwise	63
provided by ordinance or resolution enacted or adopted by the	64
legislative authority of the political subdivision authorizing	65
any such contract, money received under the contract shall be	66
deposited to the credit of the general fund of the political	67
subdivision.	68

Sec. 4905.31. Except as provided in section 4933.29 of the	69
Revised Code, Chapters 4901., 4903., 4905., 4907., 4909., 4921.,	70
and 4923., 4927., 4928., and 4929. of the Revised Code do not	71
prohibit a public utility from filing a schedule or establishing	72
or entering into any reasonable arrangement with another public	73
utility or with one or more of its customers, consumers, or	74
employees, and do not prohibit a mercantile customer of an	75
electric distribution utility as those terms are defined in	76
section 4928.01 of the Revised Code or a group of those customers	77
from establishing a reasonable arrangement with that utility or	78
another public utility electric light company, providing for any	79
of the following:	80

(A) The division or distribution of its surplus profits;

81

(B) A sliding scale of charges, including variations in rates	82
based upon either of the following:	83

(1) Stipulatedstipulated variations in cost as provided in	84
the schedule or arrangement;	85

(2) Any emissions fee levied upon an electric light company	86
under Substitute Senate Bill No. 359 of the 119th general assembly	87
as provided in the schedule. The public utilities commission shall	88
permit an electric light company to recover the emissions fee	89
pursuant to such a variable rate schedule.	90

(3) Any emissions fee levied upon an electric light company	91
under division (C) or (D) of section 3745.11 of the Revised Code	92
as provided in the schedule. The public utilities commission shall	93
permit an electric light company to recover any such emission fee	94
pursuant to such a variable rate schedule.	95

(4) Any schedule of variable rates filed under division (B)	96
of this section shall provide for the recovery of any such	97
emissions fee by applying a uniform percentage increase to the	98
base rate charged each customer of the electric light company for	99
service during the period that the variable rate is in effect.	100

(C) A minimum charge for service to be rendered unless such	101
minimum charge is made or prohibited by the terms of the	102
franchise, grant, or ordinance under which such public utility is	103
operated;	104

(D) A classification of service based upon the quantity used,	105
the time when used, the purpose for which used, the duration of	106
use, and any other reasonable consideration;	107

(E) Any other financial device that may be practicable or	108
advantageous to the parties interested. NoIn the case of a	109
schedule or arrangement concerning a public utility electric light	110
company, such other financial device may include a device to	111
recover costs incurred in conjunction with any economic	112
development and job retention program of the utility within its	113
certified territory, including recovery of revenue foregone as a	114
result of any such program; any development and implementation of	115
peak demand reduction and energy efficiency programs under section	116
4928.66 of the Revised Code; any acquisition and deployment of	117
advanced metering, including the costs of any meters prematurely	118
retired as a result of the advanced metering implementation; and	119
compliance with any government mandate.	120

No such schedule or arrangement, sliding scale, minimum	121
charge, classification, variable rate, or device is lawful unless	122
it is filed with and approved by the commission pursuant to an	123
application that is submitted by the public utility or the	124
mercantile customer or group of mercantile customers of an	125
electric distribution utility and is posted on the commission's	126
docketing information system and is accessible through the	127
internet.	128

Every such public utility is required to conform its	129
schedules of rates, tolls, and charges to such arrangement,	130
sliding scale, classification, or other device, and where variable	131
rates are provided for in any such schedule or arrangement, the	132
cost data or factors upon which such rates are based and fixed	133
shall be filed with the commission in such form and at such times	134
as the commission directs. The commission shall review the cost	135
data or factors upon which a variable rate schedule filed under	136
division (B)(2) or (3) of this section is based and shall adjust	137
the base rates of the electric light company or order the company	138
to refund any charges that it has collected under the variable	139
rate schedule that the commission finds to have resulted from	140
errors or erroneous reporting. After recovery of all of the	141
emissions fees upon which a variable rate authorized under	142
division (B)(2) or (3) of this section is based, collection of the	143
variable rate shall end and the variable rate schedule shall be	144
terminated.	145

Every such schedule or reasonable arrangement, sliding scale,	146
minimum charge, classification, variable rate, or device shall be	147
under the supervision and regulation of the commission, and is	148
subject to change, alteration, or modification by the commission.	149

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

150

(1) "Ancillary service" means any function necessary to the	151
provision of electric transmission or distribution service to a	152
retail customer and includes, but is not limited to, scheduling,	153
system control, and dispatch services; reactive supply from	154
generation resources and voltage control service; reactive supply	155
from transmission resources service; regulation service; frequency	156
response service; energy imbalance service; operating	157
reserve-spinning reserve service; operating reserve-supplemental	158
reserve service; load following; back-up supply service;	159
real-power loss replacement service; dynamic scheduling; system	160
black start capability; and network stability service.	161

(2) "Billing and collection agent" means a fully independent	162
agent, not affiliated with or otherwise controlled by an electric	163
utility, electric services company, electric cooperative, or	164
governmental aggregator subject to certification under section	165
4928.08 of the Revised Code, to the extent that the agent is under	166
contract with such utility, company, cooperative, or aggregator	167
solely to provide billing and collection for retail electric	168
service on behalf of the utility company, cooperative, or	169
aggregator.	170

(3) "Certified territory" means the certified territory	171
established for an electric supplier under sections 4933.81 to	172
4933.90 of the Revised Code as amended by Sub. S.B. No. 3 of the	173
123rd general assembly.	174

(4) "Competitive retail electric service" means a component	175
of retail electric service that is competitive as provided under	176
division (B) of this section.	177

(5) "Electric cooperative" means a not-for-profit electric	178
light company that both is or has been financed in whole or in	179
part under the "Rural Electrification Act of 1936," 49 Stat. 1363,	180
7 U.S.C. 901, and owns or operates facilities in this state to	181
generate, transmit, or distribute electricity, or a not-for-profit	182
successor of such company.	183

(6) "Electric distribution utility" means an electric utility	184
that supplies at least retail electric distribution service.	185

(7) "Electric light company" has the same meaning as in	186
section 4905.03 of the Revised Code and includes an electric	187
services company, but excludes any self-generator to the extent	188
that it consumes electricity it so produces or to the extent it,	189
sells that electricity for resale electricity it so produces, or	190
obtains electricity from a generating facility it hosts on its	191
premises.	192

(8) "Electric load center" has the same meaning as in section	193
4933.81 of the Revised Code.	194

(9) "Electric services company" means an electric light	195
company that is engaged on a for-profit or not-for-profit basis in	196
the business of supplying or arranging for the supply of only a	197
competitive retail electric service in this state. "Electric	198
services company" includes a power marketer, power broker,	199
aggregator, or independent power producer but excludes an electric	200
cooperative, municipal electric utility, governmental aggregator,	201
or billing and collection agent.	202

(10) "Electric supplier" has the same meaning as in section	203
4933.81 of the Revised Code.	204

(11) "Electric utility" means an electric light company that	205
has a certified territory and is engaged on a for-profit basis	206
either in the business of supplying a noncompetitive retail	207
electric service in this state or in the businesses of supplying	208
both a noncompetitive and a competitive retail electric service	209
in this state. "Electric utility" excludes a municipal electric	210
utility or a billing and collection agent.	211

(12) "Firm electric service" means electric service other	212
than nonfirm electric service.	213

(13) "Governmental aggregator" means a legislative authority	214
of a municipal corporation, a board of township trustees, or a	215
board of county commissioners acting as an aggregator for the	216
provision of a competitive retail electric service under authority	217
conferred under section 4928.20 of the Revised Code.	218

(14) A person acts "knowingly," regardless of the person's	219
purpose, when the person is aware that the person's conduct will	220
probably cause a certain result or will probably be of a certain	221
nature. A person has knowledge of circumstances when the person is	222
aware that such circumstances probably exist.	223

(15) "Level of funding for low-income customer energy	224
efficiency programs provided through electric utility rates" means	225
the level of funds specifically included in an electric utility's	226
rates on October 5, 1999, pursuant to an order of the public	227
utilities commission issued under Chapter 4905. or 4909. of the	228
Revised Code and in effect on October 4, 1999, for the purpose of	229
improving the energy efficiency of housing for the utility's	230
low-income customers. The term excludes the level of any such	231
funds committed to a specific nonprofit organization or	232
organizations pursuant to a stipulation or contract.	233

(16) "Low-income customer assistance programs" means the	234
percentage of income payment plan program, the home energy	235
assistance program, the home weatherization assistance program,	236
and the targeted energy efficiency and weatherization program.	237

(17) "Market development period" for an electric utility	238
means the period of time beginning on the starting date of	239
competitive retail electric service and ending on the applicable	240
date for that utility as specified in section 4928.40 of the	241
Revised Code, irrespective of whether the utility applies to	242
receive transition revenues under this chapter.	243

(18) "Market power" means the ability to impose on customers	244
a sustained price for a product or service above the price that	245
would prevail in a competitive market.	246

(19) "Mercantile commercial customer" means a commercial or	247
industrial customer if the electricity consumed is for	248
nonresidential use and the customer consumes more than seven	249
hundred thousand kilowatt hours per year or is part of a national	250
account involving multiple facilities in one or more states.	251

(20) "Municipal electric utility" means a municipal	252
corporation that owns or operates facilities to generate,	253
transmit, or distribute electricity.	254

(21) "Noncompetitive retail electric service" means a	255
component of retail electric service that is noncompetitive as	256
provided under division (B) of this section.	257

(22) "Nonfirm electric service" means electric service	258
provided pursuant to a schedule filed under section 4905.30 of the	259
Revised Code or pursuant to an arrangement under section 4905.31	260
of the Revised Code, which schedule or arrangement includes	261
conditions that may require the customer to curtail or interrupt	262
electric usage during nonemergency circumstances upon	263
notification by an electric utility.	264

(23) "Percentage of income payment plan arrears" means funds	265
eligible for collection through the percentage of income payment	266
plan rider, but uncollected as of July 1, 2000.	267

(24) "Person" has the same meaning as in section 1.59 of the	268
Revised Code.	269

(25) "Advanced energy project" means any technologies,	270
products, activities, or management practices or strategies that	271
facilitate the generation or use of electricity and that reduce or	272
support the reduction of energy consumption or support the	273
production of clean, renewable energy for industrial,	274
distribution, commercial, institutional, governmental, research,	275
not-for-profit, or residential energy users. Such energy includes,	276
including, but is not limited to, wind power; geothermal energy;	277
solar thermal energy; and energy produced by micro turbines in	278
distributed generation applications with high electric	279
efficiencies, by combined heat and power applications, by fuel	280
cells powered by hydrogen derived from wind, solar, biomass,	281
hydroelectric, landfill gas, or geothermal sources, or by solar	282
electric generation, landfill gas, or hydroelectric generation	283
advanced energy resources and renewable energy resources.	284
"Advanced energy project" also includes any project described in	285
division (A), (B), or (C) of section 4928.621 of the Revised Code.	286

(26) "Regulatory assets" means the unamortized net	287
regulatory assets that are capitalized or deferred on the	288
regulatory books of the electric utility, pursuant to an order or	289
practice of the public utilities commission or pursuant to	290
generally accepted accounting principles as a result of a prior	291
commission rate-making decision, and that would otherwise have	292
been charged to expense as incurred or would not have been	293
capitalized or otherwise deferred for future regulatory	294
consideration absent commission action. "Regulatory assets"	295
includes, but is not limited to, all deferred demand-side	296
management costs; all deferred percentage of income payment plan	297
arrears; post-in-service capitalized charges and assets recognized	298
in connection with statement of financial accounting standards no.	299
109 (receivables from customers for income taxes); future nuclear	300
decommissioning costs and fuel disposal costs as those costs have	301
been determined by the commission in the electric utility's most	302
recent rate or accounting application proceeding addressing such	303
costs; the undepreciated costs of safety and radiation control	304
equipment on nuclear generating plants owned or leased by an	305
electric utility; and fuel costs currently deferred pursuant to	306
the terms of one or more settlement agreements approved by the	307
commission.	308

(27) "Retail electric service" means any service involved in	309
supplying or arranging for the supply of electricity to ultimate	310
consumers in this state, from the point of generation to the	311
point of consumption. For the purposes of this chapter, retail	312
electric service includes one or more of the following "service	313
components": generation service, aggregation service, power	314
marketing service, power brokerage service, transmission service,	315
distribution service, ancillary service, metering service, and	316
billing and collection service.	317

(28) "Small electric generation facility" means an electric	318
generation plant and associated facilities designed for, or	319
capable of, operation at a capacity of less than two megawatts.	320

(29)(28) "Starting date of competitive retail electric	321
service" means January 1, 2001, except as provided in division (C)	322
of this section.	323

(30)(29) "Customer-generator" means a user of a net metering	324
system.	325

(31)(30) "Net metering" means measuring the difference in an	326
applicable billing period between the electricity supplied by an	327
electric service provider and the electricity generated by a	328
customer-generator that is fed back to the electric service	329
provider.	330

(32)(31) "Net metering system" means a facility for the	331
production of electrical energy that does all of the following:	332

(a) Uses as its fuel either solar, wind, biomass, landfill	333
gas, or hydropower, or uses a microturbine or a fuel cell;	334

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

335

(c) Operates in parallel with the electric utility's	336
transmission and distribution facilities;	337

(d) Is intended primarily to offset part or all of the	338
customer-generator's requirements for electricity.	339

(33)(32) "Self-generator" means an entity in this state that	340
owns or hosts on its premises an electric generation facility	341
that produces electricity primarily for the owner's consumption	342
and that may provide any such excess electricity to retail	343
electric service providersanother entity, whether the facility	344
is installed or operated by the owner or by an agent under a	345
contract.	346

(33) "Rate plan" means the standard service offer in effect	347
on the effective date of the amendment of this section by S.B. 221	348
of the 127th general assembly.	349

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

350

(a) Any method or any modification or replacement of any	351
property, process, device, structure, or equipment that increases	352
the generation output of an electric generating facility to the	353
extent such efficiency is achieved without additional carbon	354
dioxide emissions by that facility;	355

(b) Any distributed generation system consisting of customer	356
cogeneration of electricity and thermal output simultaneously,	357
primarily to meet the energy needs of the customer's facilities;	358

(c) Clean coal technology that includes a carbon-based	359
product that is chemically altered before combustion to	360
demonstrate a reduction, as expressed as ash, in emissions of	361
nitrous oxide, mercury, arsenic, chlorine, sulfur dioxide, or	362
sulfur trioxide in accordance with the American society of testing	363
and materials standard D1757A or a reduction of metal oxide	364
emissions in accordance with standard D5142 of that society;	365

(d) Advanced nuclear energy technology consisting of	366
generation III technology as defined by the nuclear regulatory	367
commission; other, later technology; or significant improvements	368
to existing facilities;	369

(e) Any fuel cell used in the generation of electricity,	370
including, but not limited to, a proton exchange membrane fuel	371
cell, phosphoric acid fuel cell, molten carbonate fuel cell, or	372
solid oxide fuel cell;	373

(f) Demand-side management and any energy efficiency	374
improvement.	375

(35) "Renewable energy resource" means solar photovoltaic or	376
solar thermal energy, wind energy, power produced by a	377
hydroelectric facility, geothermal energy, fuel derived from	378
solid wastes, as defined in section 3734.01 of the Revised Code,	379
through fractionation, biological decomposition, or other	380
process that does not principally involve combustion, biomass	381
energy, biologically derived methane gas, or energy derived	382
from nontreated by-products of the pulping process or wood	383
manufacturing process, including bark, wood chips, sawdust, and	384
lignin in spent pulping liquors. "Renewable energy resources"	385
includes, but is not limited to, any fuel cell used in the	386
generation of electricity, including, but not limited to, a	387
proton exchange membrane fuel cell, phosphoric acid fuel cell,	388
molten carbonate fuel cell, or solid oxide fuel cell; wind turbine	389
located in the state's territorial waters of Lake Erie; storage	390
facility that will promote the better utilization of a renewable	391
energy resource that primarily generates off peak; or distributed	392
generation system used by a customer to generate electricity	393
from any such energy. As used in division (A)(35) of this	394
section, "hydroelectric facility" means a hydroelectric	395
generating facility that is located at a dam on a river that is	396
within or bordering this state or within or bordering an	397
adjoining state and meets all of the following standards:	398

(a) The facility provides for river flows that are not	399
detrimental for fish, wildlife, and water quality, including	400
seasonal flow fluctuations as defined by the applicable licensing	401
agency for the facility.	402

(b) The facility demonstrates that it complies with the	403
water quality standards of this state, which compliance may	404
consist of certification under Section 401 of the "Clean Water	405
Act of 1977," 91 Stat. 1598, 1599, 33 U.S.C. 1341, and	406
demonstrates that it has not contributed to a finding by this	407
state that the river has impaired water quality under Section	408
303(d) of the "Clean Water Act of 1977," 114 Stat. 870, 33	409
U.S.C. 1313.	410

(c) The facility complies with mandatory prescriptions	411
regarding fish passage as required by the federal energy	412
regulatory commission license issued for the project, regarding	413
fish protection for riverine, anadromous, and catadromus fish.	414

(d) The facility complies with the recommendations of the	415
Ohio environmental protection agency and with the terms of its	416
federal energy regulatory commission license regarding watershed	417
protection, mitigation, or enhancement, to the extent of each	418
agency's respective jurisdiction over the facility.	419

(e) The facility complies with provisions of the "Endangered	420
Species Act of 1973," 87 Stat. 884, 16 U.S.C. 1531 to 1544, as	421
amended.	422

(f) The facility does not harm cultural resources of the	423
area. This can be shown through compliance with the terms of its	424
federal energy regulatory commission license or, if the facility	425
is not regulated by that commission, through development of a plan	426
approved by the Ohio historic preservation office, to the extent	427
it has jurisdiction over the facility.	428

(g) The facility complies with the terms of its federal	429
energy regulatory commission license or exemption that are related	430
to recreational access, accommodation, and facilities or, if the	431
facility is not regulated by that commission, the facility	432
complies with similar requirements as are recommended by resource	433
agencies, to the extent they have jurisdiction over the facility;	434
and the facility provides access to water to the public without	435
fee or charge.	436

(h) The facility is not recommended for removal by any	437
federal agency or agency of any state, to the extent the	438
particular agency has jurisdiction over the facility.	439

(B) For the purposes of this chapter, a retail electric	440
service component shall be deemed a competitive retail electric	441
service if the service component is competitive pursuant to a	442
declaration by a provision of the Revised Code or pursuant to an	443
order of the public utilities commission authorized under division	444
(A) of section 4928.04 of the Revised Code. Otherwise, the	445
service component shall be deemed a noncompetitive retail electric	446
service.	447

(C) Prior to January 1, 2001, and after application by an	448
electric utility, notice, and an opportunity to be heard, the	449
public utilities commission may issue an order delaying the	450
January 1, 2001, starting date of competitive retail electric	451
service for the electric utility for a specified number of days	452
not to exceed six months, but only for extreme technical	453
conditions precluding the start of competitive retail electric	454
service on January 1, 2001.	455

Sec. 4928.02.  It is the policy of this state to do the	456
following throughout this state beginning on the starting date of	457
competitive retail electric service:	458

(A) Ensure the availability to consumers of adequate,	459
reliable, safe, efficient, nondiscriminatory, and reasonably	460
priced retail electric service;	461

(B) Ensure the availability of unbundled and comparable	462
retail electric service that provides consumers with the supplier,	463
price, terms, conditions, and quality options they elect to meet	464
their respective needs;	465

(C) Ensure diversity of electricity supplies and suppliers,	466
by giving consumers effective choices over the selection of those	467
supplies and suppliers and by encouraging the development of	468
distributed and small generation facilities;	469

(D) Encourage innovation and market access for cost-effective	470
supply- and demand-side retail electric service including, but not	471
limited to, demand-side management, time-differentiated pricing,	472
and implementation of advanced metering infrastructure;	473

(E) Encourage cost-effective and efficient access to	474
information regarding the operation of the transmission and	475
distribution systems of electric utilities in order to promote	476
both effective customer choice of retail electric service and the	477
development of performance standards and targets for service	478
quality for all consumers, including annual achievement reports	479
written in plain language;	480

(F) Ensure that an electric utility's transmission and	481
distribution systems are available to a customer-generator or	482
owner of distributed generation, so that the customer-generator or	483
owner can market and deliver the electricity it produces;	484

(G) Recognize the continuing emergence of competitive	485
electricity markets through the development and implementation of	486
flexible regulatory treatment;	487

(G)(H) Ensure effective competition in the provision of	488
retail electric service by avoiding anticompetitive subsidies	489
flowing from a noncompetitive retail electric service to a	490
competitive retail electric service or to a product or service	491
other than retail electric service, and vice versa, including by	492
prohibiting the recovery of any generation-related costs through	493
distribution or transmission rates;	494

(H)(I) Ensure retail electric service consumers protection	495
against unreasonable sales practices, market deficiencies, and	496
market power;	497

(I)(J) Provide coherent, transparent means of giving	498
appropriate incentives to technologies that can adapt	499
successfully to potential environmental mandates;	500

(K) Encourage implementation of distributed generation across	501
customer classes through regular review and updating of	502
administrative rules governing critical issues such as, but not	503
limited to, interconnection standards, standby charges, and net	504
metering;	505

(L) Protect at-risk populations, including, but not limited	506
to, when considering the implementation of any new advanced energy	507
or renewable energy resource;	508

(M) Encourage the education of small business owners in this	509
state regarding the use of, and encourage the use of, energy	510
efficiency programs and alternative energy resources in their	511
businesses;	512

(N) Facilitate the state's effectiveness in the global	513
economy.	514

In carrying out this policy, the commission shall consider	515
rules as they apply to the costs of electric distribution	516
infrastructure, including, but not limited to, line extensions,	517
for the purpose of development in this state.	518

Sec. 4928.05.  (A)(1) On and after the starting date of	519
competitive retail electric service, a competitive retail electric	520
service supplied by an electric utility or electric services	521
company shall not be subject to supervision and regulation by a	522
municipal corporation under Chapter 743. of the Revised Code or by	523
the public utilities commission under Chapters 4901. to 4909.,	524
4933., 4935., and 4963. of the Revised Code, except section	525
sections 4905.10 and 4905.31, division (B) of section 4905.33, and	526
sections 4905.35 and 4933.81 to 4933.90; except sections	527
4905.06, 4935.03, 4963.40, and 4963.41 of the Revised Code only	528
to the extent related to service reliability and public safety;	529
and except as otherwise provided in this chapter. The	530
commission's authority to enforce those excepted provisions with	531
respect to a competitive retail electric service shall be such	532
authority as is provided for their enforcement under Chapters	533
4901. to 4909., 4933., 4935., and 4963. of the Revised Code and	534
this chapter. Nothing in this division shall be construed to	535
limit the commission's authority under section 4928.144 of the	536
Revised Code.	537

On and after the starting date of competitive retail	538
electric service, a competitive retail electric service supplied	539
by an electric cooperative shall not be subject to supervision and	540
regulation by the commission under Chapters 4901. to 4909., 4933.,	541
4935., and 4963. of the Revised Code, except as otherwise	542
expressly provided in sections 4928.01 to 4928.10 and 4928.16 of	543
the Revised Code.	544

(2) On and after the starting date of competitive retail	545
electric service, a noncompetitive retail electric service	546
supplied by an electric utility shall be subject to supervision	547
and regulation by the commission under Chapters 4901. to 4909.,	548
4933., 4935., and 4963. of the Revised Code and this chapter, to	549
the extent that authority is not preempted by federal law. The	550
commission's authority to enforce those provisions with respect to	551
a noncompetitive retail electric service shall be the authority	552
provided under those chapters and this chapter, to the extent the	553
authority is not preempted by federal law. Notwithstanding	554
Chapters 4905. and 4909. of the Revised Code, commission authority	555
under this chapter shall include the authority to provide for the	556
recovery, through a reconcilable rider on an electric	557
distribution utility's distribution rates, of all transmission	558
and transmission-related costs, including ancillary and	559
congestion costs, imposed on or charged to the utility by the	560
federal energy regulatory commission or a regional transmission	561
organization, independent transmission operator, or similar	562
organization approved by the federal energy regulatory	563
commission.	564

The commission shall exercise its jurisdiction with respect	565
to the delivery of electricity by an electric utility in this	566
state on or after the starting date of competitive retail electric	567
service so as to ensure that no aspect of the delivery of	568
electricity by the utility to consumers in this state that	569
consists of a noncompetitive retail electric service is	570
unregulated.	571

On and after that starting date, a noncompetitive retail	572
electric service supplied by an electric cooperative shall not be	573
subject to supervision and regulation by the commission under	574
Chapters 4901. to 4909., 4933., 4935., and 4963. of the Revised	575
Code, except sections 4933.81 to 4933.90 and 4935.03 of the	576
Revised Code. The commission's authority to enforce those excepted	577
sections with respect to a noncompetitive retail electric service	578
of an electric cooperative shall be such authority as is provided	579
for their enforcement under Chapters 4933. and 4935. of the	580
Revised Code.	581

(B) Nothing in this chapter affects the authority of the	582
commission under Title XLIX of the Revised Code to regulate an	583
electric light company in this state or an electric service	584
supplied in this state prior to the starting date of competitive	585
retail electric service.	586

Sec. 4928.09.  (A)(1) No person shall operate in this state	587
as an electric utility, an electric services company, or a billing	588
and collection agent, or a regional transmission organization	589
approved by the federal energy regulatory commission and having	590
the responsibility for maintaining reliability in all or part of	591
this state on and after the starting date of competitive retail	592
electric service unless that person first does both of the	593
following:	594

(a) Consents irrevocably to the jurisdiction of the courts of	595
this state and service of process in this state, including,	596
without limitation, service of summonses and subpoenas, for any	597
civil or criminal proceeding arising out of or relating to such	598
operation, by providing that irrevocable consent in accordance	599
with division (A)(4) of this section;	600

(b) Designates an agent authorized to receive that service of	601
process in this state, by filing with the commission a document	602
designating that agent.	603

(2) No person shall continue to operate as such an electric	604
utility, electric services company, or billing and collection	605
agent, or regional transmission organization described in division	606
(A)(1) of this section unless that person continues to consent to	607
such jurisdiction and service of process in this state and	608
continues to designate an agent as provided under this division,	609
by refiling in accordance with division (A)(4) of this section the	610
appropriate documents filed under division (A)(1) of this section	611
or, as applicable, the appropriate amended documents filed under	612
division (A)(3) of this section. Such refiling shall occur during	613
the month of December of every fourth year after the initial	614
filing of a document under division (A)(1) of this section.	615

(3) If the address of the person filing a document under	616
division (A)(1) or (2) of this section changes, or if a person's	617
agent or the address of the agent changes, from that listed on the	618
most recently filed of such documents, the person shall file an	619
amended document containing the new information.	620

(4) The consent and designation required by divisions (A)(1)	621
to (3) of this section shall be in writing, on forms prescribed by	622
the public utilities commission. The original of each such	623
document or amended document shall be legible and shall be filed	624
with the commission, with a copy filed with the office of the	625
consumers' counsel and with the attorney general's office.	626

(B) A person who enters this state pursuant to a summons,	627
subpoena, or other form of process authorized by this section is	628
not subject to arrest or service of process, whether civil or	629
criminal, in connection with other matters that arose before the	630
person's entrance into this state pursuant to such summons,	631
subpoena, or other form of process.	632

(C) Divisions (A) and (B) of this section do not apply to any	633
of the following:	634

(1) A corporation incorporated under the laws of this state	635
that has appointed a statutory agent pursuant to section 1701.07	636
or 1702.06 of the Revised Code;	637

(2) A foreign corporation licensed to transact business in	638
this state that has appointed a designated agent pursuant to	639
section 1703.041 of the Revised Code;	640

(3) Any other person that is a resident of this state or that	641
files consent to service of process and designates a statutory	642
agent pursuant to other laws of this state.	643

Sec. 4928.14. (A) After its market development period, an	644
electric distribution utility in this state shall provide	645
consumers, on a comparable and nondiscriminatory basis within its	646
certified territory, a market-based standard service offer of all	647
competitive retail electric services necessary to maintain	648
essential electric service to consumers, including a firm supply	649
of electric generation service. Such offer shall be filed with the	650
public utilities commission under section 4909.18 of the Revised	651
Code.	652

(B) After that market development period, each electric	653
distribution utility also shall offer customers within its	654
certified territory an option to purchase competitive retail	655
electric service the price of which is determined through a	656
competitive bidding process. Prior to January 1, 2004, the	657
commission shall adopt rules concerning the conduct of the	658
competitive bidding process, including the information	659
requirements necessary for customers to choose this option and the	660
requirements to evaluate qualified bidders. The commission may	661
require that the competitive bidding process be reviewed by an	662
independent third party. No generation supplier shall be	663
prohibited from participating in the bidding process, provided	664
that any winning bidder shall be considered a certified supplier	665
for purposes of obligations to customers. At the election of the	666
electric distribution utility, and approval of the commission, the	667
competitive bidding option under this division may be used as the	668
market-based standard offer required by division (A) of this	669
section. The commission may determine at any time that a	670
competitive bidding process is not required, if other means to	671
accomplish generally the same option for customers is readily	672
available in the market and a reasonable means for customer	673
participation is developed.	674

(C) After the market development period, theThe failure of a	675
supplier to provide retail electric generation service to	676
customers within the certified territory of thean electric	677
distribution utility shall result in the supplier's customers,	678
after reasonable notice, defaulting to the utility's standard	679
service offer filed under division (A) of this sectionsections	680
4928.141, 4928.142, and 4928.143 of the Revised Code until the	681
customer chooses an alternative supplier. A supplier is deemed	682
under this divisionsection to have failed to provide such service	683
if the commission finds, after reasonable notice and opportunity	684
for hearing, that any of the following conditions are met:	685

(1)(A) The supplier has defaulted on its contracts with	686
customers, is in receivership, or has filed for bankruptcy.	687

(2)(B) The supplier is no longer capable of providing the	688
service.	689

(3)(C) The supplier is unable to provide delivery to	690
transmission or distribution facilities for such period of time as	691
may be reasonably specified by commission rule adopted under	692
division (A) of section 4928.06 of the Revised Code.	693

(4)(D) The supplier's certification has been suspended,	694
conditionally rescinded, or rescinded under division (D) of	695
section 4928.08 of the Revised Code.	696

Sec. 4928.141. (A) Beginning January 1, 2009, an electric	697
distribution utility shall provide consumers, on a comparable and	698
nondiscriminatory basis within its certified territory, a	699
market-based standard service offer of all competitive retail	700
electric services necessary to maintain essential electric service	701
to consumers, including a firm supply of electric generation	702
service. To that end, the electric distribution utility shall	703
apply to the public utilities commission to establish the	704
standard service offer in accordance with section 4928.142 or	705
4928.143 of the Revised Code and, at its discretion, may apply	706
simultaneously under both sections, except that the utility's	707
first standard service offer application at minimum shall include	708
a filing under section 4928.143 of the Revised Code. Only a	709
standard service offer authorized in accordance with section	710
4928.142 or 4928.143 of the Revised Code, shall serve as the	711
utility's standard service offer for the purpose of compliance	712
with this section; and that standard service offer shall serve	713
as the utility's default standard service offer for the purpose	714
of section 4928.14 of the Revised Code. However, pursuant to	715
division (D) of section 4928.143 of the Revised Code, any rate	716
plan that extends beyond December 31, 2008, shall continue to be	717
in effect for the subject electric distribution utility for the	718
duration of the plan's term.	719

(B) The commission shall set the time for hearing of a filing	720
under section 4928.142 or 4928.143 of the Revised Code, send	721
written notice of the hearing to the electric distribution	722
utility, and publish notice in a newspaper of general circulation	723
in each county in the utility's certified territory. The	724
commission shall adopt rules regarding filings under those	725
sections.	726

Sec. 4928.142. (A) For the purpose of complying with section	727
4928.141 of the Revised Code and subject to division (D) of this	728
section and, as applicable, subject to the rate plan requirement	729
of division (A) of section 4928.141 of the Revised Code, an	730
electric distribution utility may establish a standard service	731
offer price for retail electric generation service that is	732
delivered to the utility under a market-rate offer.	733

(1) The market-rate offer shall be determined through a	734
competitive bidding process that provides for all of the	735
following:	736

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

737

(b) Clear product definition;

738

(c) Standardized bid evaluation criteria;

739

(d) Oversight by an independent third party that shall design	740
the solicitation, administer the bidding, and ensure that the	741
criteria specified in division (A)(1)(a) to (c) of this section	742
are met;	743

(e) Evaluation of the submitted bids prior to the selection	744
of the least-cost bid winner or winners.	745

No generation supplier shall be prohibited from participating	746
in the bidding process.	747

(2) The public utilities commission shall modify rules, or	748
adopt new rules as necessary, concerning the conduct of the	749
competitive bidding process and the qualifications of bidders,	750
which rules shall foster supplier participation in the bidding	751
process and shall be consistent with the requirements of division	752
(A)(1) of this section.	753

(B) Prior to initiating a competitive bidding process for a	754
market-rate offer under division (A) of this section, the electric	755
distribution utility shall file an application with the	756
commission. An electric distribution utility may file its	757
application with the commission prior to the effective date of	758
the commission rules required under division (A)(2) of this	759
section, and, as the commission determines necessary, the utility	760
shall immediately conform its filing to the rules upon their	761
taking effect.	762

An application under this division shall detail the electric	763
distribution utility's proposed compliance with the requirements	764
of division (A)(1) of this section and with commission rules	765
under division (A)(2) of this section and demonstrate that all of	766
the following requirements are met:	767

(1) The electric distribution utility or its transmission	768
service affiliate belongs to at least one regional transmission	769
organization that has been approved by the federal energy	770
regulatory commission; or there otherwise is comparable and	771
nondiscriminatory access to the electric transmission grid.	772

(2) Any such regional transmission organization has a	773
market-monitor function and the ability to take actions to	774
identify and mitigate market power or the electric distribution	775
utility's market conduct; or a similar market monitoring function	776
exists with commensurate ability to identify and monitor market	777
conditions and mitigate conduct associated with the exercise of	778
market power.	779

(3) A published source of information is available publicly	780
or through subscription that identifies pricing information for	781
traded electricity on- and off-peak energy products that are	782
contracts for delivery beginning at least two years from the date	783
of the publication and is updated on a regular basis.	784

The commission shall initiate a proceeding and, within ninety	785
days after the application's filing date, shall determine by order	786
whether the electric distribution utility and its market-rate	787
offer meet all of the foregoing requirements. If the finding is	788
positive, the electric distribution utility may initiate its	789
competitive bidding process. If the finding is negative as to one	790
or more requirements, the commission in the order shall direct	791
the electric distribution utility regarding how any deficiency	792
may be remedied in a timely manner to the commission's	793
satisfaction; otherwise, the electric distribution utility shall	794
withdraw the application. However, if such remedy is made and the	795
subsequent finding is positive and also if the electric	796
distribution utility made a simultaneous filing under this	797
section and section 4928.143 of the Revised Code, the utility	798
shall not initiate its competitive bid until at least one hundred	799
twenty days after the filing date of those applications.	800

(C) Upon the completion of the competitive bidding process	801
authorized by divisions (A) and (B) of this section, including for	802
the purpose of division (D) of this section, the commission shall	803
select the least-cost bid winner or winners of that process, and	804
such selected bid or bids, as prescribed as retail rates by the	805
commission, shall be the electric distribution utility's	806
standard service offer unless the commission, by order issued	807
before the third calendar day following the conclusion of the	808
competitive bidding process for the market rate offer, determines	809
that one or more of the following criteria were not met:	810

(1) Each portion of the bidding process was oversubscribed,	811
such that the amount of supply bid upon was greater than the	812
amount of the load bid out.	813

(2) There were four or more bidders.

814

(3) At least twenty-five per cent of the load is bid upon by	815
one or more persons other than the electric distribution utility.	816

All costs incurred by the electric distribution utility as a	817
result of or related to the competitive bidding process or to	818
procuring generation service to provide the standard service	819
offer, including the costs of energy and capacity and the costs	820
of all other products and services procured as a result of the	821
competitive bidding process, shall be timely recovered through	822
the standard service offer price, and, for that purpose, the	823
commission shall approve a reconciliation mechanism, other	824
recovery mechanism, or a combination of such mechanisms for the	825
utility.	826

(D) The first application filed under this section by an	827
electric distribution utility that, as of the effective date of	828
this section, directly owns, in whole or in part, operating	829
electric generating facilities that had been used and useful in	830
this state shall require that a portion of that utility's	831
standard service offer load for the first five years of the	832
market rate offer be competitively bid under division (A) of	833
this section as follows: ten per cent of the load in year one	834
and not less than twenty per cent in year two, thirty per cent	835
in year three, forty per cent in year four, and fifty per cent	836
in year five. Consistent with those percentages, the commission	837
shall determine the actual percentages for each year of years one	838
through five. The standard service offer price for retail	839
electric generation service under this first application shall	840
be a proportionate blend of the bid price and the generation	841
service price for the remaining standard service offer load,	842
which latter price shall be equal to the electric distribution	843
utility's most recent standard service offer price, adjusted	844
upward or downward as the commission determines reasonable,	845
relative to the jurisdictional portion of any known and	846
measurable changes from the level of any one or more of the	847
following costs as reflected in that most recent standard service	848
offer price:	849

(1) The electric distribution utility's prudently incurred	850
cost of fuel used to produce electricity;	851

(2) Its prudently incurred purchased power costs;

852

(3) Its costs of satisfying the supply and demand portfolio	853
requirements of this state, including, but not limited to,	854
renewable energy resource and energy efficiency requirements;	855

(4) Its costs prudently incurred to comply with environmental	856
laws and regulations.	857

In making any adjustment to the most recent standard service	858
offer price on the basis of costs described in division (D)(4) of	859
this section, the commission shall consider the benefits that may	860
become available to the electric distribution utility as a result	861
of or in connection with the costs included in the adjustment,	862
including, but not limited to, the utility's receipt of emissions	863
credits or its receipt of tax benefits or of other benefits, and,	864
accordingly, the commission may impose such conditions on the	865
adjustment to ensure that any such benefits are properly aligned	866
with the associated cost responsibility.	867

Additionally, the commission may adjust the electric	868
distribution utility's most recent standard service offer price by	869
such just and reasonable amount that the commission determines	870
necessary to address any emergency that threatens the utility's	871
financial integrity or to ensure that the resulting revenue	872
available to the utility for providing the standard service offer	873
is not so inadequate as to result, directly or indirectly, in a	874
taking of property without compensation pursuant to Section 19 of	875
Article I, Ohio Constitution. The electric distribution utility	876
has the burden of demonstrating that any adjustment to its most	877
recent standard service offer price is proper in accordance with	878
this division. The commission's determination of the electric	879
distribution utility's most recent standard service offer price	880
shall exclude any previously authorized allowance for transition	881
costs with such exclusion being effective on and after the date	882
that allowance is scheduled to end under the utility's rate plan.	883

(E) Beginning in the second year of a blended price under	884
division (D) of this section and notwithstanding any other	885
requirement of this section, the commission may alter	886
prospectively the proportions specified in that division to	887
mitigate any effect of an abrupt change in the electric	888
distribution utility's standard service offer price that would	889
otherwise result in general or with respect to any rate group or	890
rate schedule but for such alteration. Any such alteration shall	891
be made not more often than annually, and the commission shall	892
not, by altering those proportions and in any event, cause the	893
duration of the blending period to exceed ten years as counted	894
from the effective date of the approved market rate offer.	895
Additionally, any such alteration shall be limited to an	896
alteration affecting the prospective proportions used during the	897
blending period and shall not affect any blending proportion	898
previously approved and applied by the commission under this	899
division.	900

(F) An electric distribution utility that has received	901
commission approval of its first application under division (C) of	902
this section shall not, nor ever shall be authorized or required	903
by the commission to, file an application under section 4928.143	904
of the Revised Code.	905

Sec. 4928.143. (A) For the purpose of complying with section	906
4928.141 of the Revised Code, an electric distribution utility may	907
file an application for public utilities commission approval of an	908
electric security plan as prescribed under division (B) of this	909
section. The utility may file that application prior to the	910
effective date of any rules the commission may adopt for the	911
purpose of this section, and, as the commission determines	912
necessary, the utility immediately shall conform its filing to	913
those rules upon their taking effect.	914

(B) Notwithstanding any other provision of Title XLIX of the	915
Revised Code to the contrary except division (D) of this section:	916

(1) An electric security plan shall include provisions	917
relating to the supply and pricing of electric generation	918
service. In addition, if the proposed electric security plan has a	919
term longer than three years, it shall include provisions in the	920
plan to permit the commission to test the plan pursuant to	921
division (E) of this section and any transitional conditions that	922
should be adopted by the commission if the commission terminates	923
the plan as authorized under that division.	924

(2) The plan may provide for or include, without limitation,	925
any of the following:	926

(a) Automatic recovery of the electric distribution utility's	927
costs of fuel used to generate the electricity supplied under the	928
offer; purchased power supplied under the offer, including the	929
cost of energy and capacity, and including purchased power	930
acquired from an affiliate; emission allowances; and federally	931
mandated carbon or energy taxes;	932

(b) A reasonable allowance for construction work in progress	933
for any of the electric distribution utility's cost of	934
constructing an electric generating facility or for an	935
environmental expenditure for any electric generating facility of	936
the electric distribution utility, provided the cost is incurred	937
or the expenditure occurs on or after January 1, 2009. Any such	938
allowance shall be subject to the construction work in progress	939
allowance limitations of division (A) of section 4909.15 of the	940
Revised Code, except that the commission may authorize such an	941
allowance upon the incurrence of the cost or occurrence of the	942
expenditure. No such allowance for generating facility	943
construction shall be authorized, however, unless the commission	944
first determines in the proceeding that there is need for the	945
facility based on resource planning projections submitted by the	946
electric distribution utility. Further, no such allowance shall be	947
authorized unless the facility's construction was sourced through	948
a competitive bid process, regarding which process the commission	949
may adopt rules. An allowance approved under division (B)(2)(b) of	950
this section shall be established as a nonbypassable surcharge	951
for the life of the facility.	952

(c) The establishment of a nonbypassable surcharge for the	953
life of an electric generating facility that is owned or operated	954
by the electric distribution utility, was sourced through a	955
competitive bid process subject to any such rules as the	956
commission adopts under division (B)(2)(b) of this section, and is	957
newly used and useful on or after January 1, 2009, which	958
surcharge shall cover all costs of the utility specified in the	959
application, excluding costs recovered through a surcharge under	960
division (B)(2)(b) of this section. However, no surcharge shall	961
be authorized unless the commission first determines in the	962
proceeding that there is need for the facility based on resource	963
planning projections submitted by the electric distribution	964
utility. Additionally, if a surcharge is authorized for a	965
facility pursuant to plan approval under division (C) of this	966
section and as a condition of the continuation of the surcharge,	967
the electric distribution utility shall dedicate to the Ohio	968
consumers bearing the surcharge all the electricity generated by	969
that facility. Before the commission authorizes any surcharge	970
pursuant to this division, it may consider, as applicable, the	971
effects of any decommissioning, deratings, and retirements.	972

(d) Provisions for the decommissioning, derating, or	973
retirement of an electric generating facility;	974

(e) Terms, conditions, or charges relating to limitations on	975
customer shopping for retail electric generation service,	976
bypassability, standby, back-up, or supplemental power service,	977
default service, carrying costs, amortization periods, and	978
accounting or deferrals, including future recovery of such	979
deferrals, as would have the effect of stabilizing or providing	980
certainty regarding retail electric service;	981

(f) Automatic increases or decreases in any component of the	982
standard service offer price;	983

(g) Provisions for the electric distribution utility to	984
securitize any phase-in, inclusive of carrying charges, of the	985
utility's standard service offer price, which phase-in is	986
authorized in accordance with section 4928.144 of the Revised	987
Code; and provisions for the recovery of the utility's cost of	988
securitization. If the commission's order includes such a	989
phase-in, the order also shall provide for the creation of	990
regulatory assets pursuant to generally accepted accounting	991
principles, by authorizing the deferral of incurred costs equal	992
to the amount not collected, plus carrying charges on that	993
amount. Further, the order shall authorize the collection of	994
those deferrals through a nonbypassable surcharge on the	995
utility's rates.	996

(h) Provisions relating to transmission, ancillary,	997
congestion, or any related service required for the standard	998
service offer, including provisions for the recovery of any cost	999
of such service that the electric distribution utility incurs on	1000
or after that date pursuant to the standard service offer;	1001

(i) Provisions regarding the utility's distribution service,	1002
including, without limitation and notwithstanding any provision	1003
of Title XLIX of the Revised Code to the contrary, provisions	1004
regarding single issue ratemaking, a revenue decoupling mechanism	1005
or any other incentive ratemaking, and provisions regarding	1006
distribution infrastructure and modernization incentives for	1007
the electric distribution utility. The latter may include a	1008
long-term energy delivery infrastructure modernization plan for	1009
that utility or any plan providing for the utility's recovery	1010
of costs, including lost revenue, shared savings, and avoided	1011
costs, and a just and reasonable rate of return on such	1012
infrastructure modernization.	1013

(j) Provisions under which the electric distribution utility	1014
may implement economic development, job retention, and energy	1015
efficiency programs, which provisions may allocate program costs	1016
across all classes of customers of the utility and those of	1017
electric distribution utilities in the same holding company	1018
system.	1019

(C)(1) The burden of proof in the proceeding shall be on the	1020
electric distribution utility. The commission shall issue an order	1021
under this division for an initial application under this section	1022
not later than one hundred twenty days after the application's	1023
filing date and, for any subsequent application by the utility	1024
under this section, not later than two hundred seventy-five days	1025
after the application's filing date. Subject to division (D) of	1026
this section, the commission by order shall approve or modify	1027
and approve an application filed under division (A) of this	1028
section if it finds that the electric security plan so approved,	1029
including its pricing and all other terms and conditions,	1030
including any deferrals and any future recovery of deferrals, is	1031
favorable in the aggregate as compared to the expected results	1032
that would otherwise apply under section 4928.142 of the Revised	1033
Code. Additionally, if the commission so approves an application	1034
that contains a surcharge under division (B)(2)(b) or (c) of	1035
this section, the commission shall ensure that the benefits	1036
derived for any purpose for which the surcharge is established	1037
are reserved and made available to those that bear the	1038
surcharge. Otherwise, the commission by order shall disapprove	1039
the application.	1040

(2)(a) If the commission modifies and approves an application	1041
under division (C)(1) of this section, the electric distribution	1042
utility may withdraw the application, thereby terminating it, and	1043
may file a new standard service offer under this section or a	1044
standard service offer under section 4928.142 of the Revised Code.	1045

(b) If the utility terminates an application pursuant to	1046
division (C)(2)(a) of this section or if the commission	1047
disapproves an application under division (C)(1) of this section,	1048
the commission shall issue such order as is necessary to continue	1049
the provisions, terms, and conditions of the utility's most recent	1050
standard service offer, along with any expected increases or	1051
decreases in fuel costs from those contained in that offer, until	1052
a subsequent offer is authorized pursuant to this section or	1053
section 4928.142 of the Revised Code, respectively.	1054

(D) Regarding the rate plan requirement of division (A) of	1055
section 4928.141 of the Revised Code, if an electric distribution	1056
utility that has a rate plan that extends beyond December 31,	1057
2008, files an application under this section for the purpose of	1058
its compliance with division (A) of section 4928.141 of the	1059
Revised Code, that rate plan and its terms and conditions are	1060
hereby incorporated into its proposed electric security plan and	1061
shall continue in effect until the date scheduled under the rate	1062
plan for its expiration, and that portion of the electric	1063
security plan shall not be subject to commission approval or	1064
disapproval under division (C) of this section. However, that	1065
utility may include in its electric security plan under this	1066
section, and the commission may approve, modify and approve, or	1067
disapprove subject to division (C) of this section, provisions	1068
for the incremental recovery or the deferral of any costs that	1069
are not being recovered under the rate plan and that the utility	1070
incurs during that continuation period to comply with section	1071
4928.141, division (B) of section 4928.64, or division (A) of	1072
section 4928.66 of the Revised Code.	1073

(E) If an electric security plan approved under division (C)	1074
of this section, except one withdrawn by the utility as authorized	1075
under that division, has a term, exclusive of phase-ins or	1076
deferrals, that exceeds three years from the effective date of the	1077
plan, the commission shall test the plan in the fourth year, and	1078
if applicable, every fourth year thereafter, to determine whether	1079
the plan, including its then-existing pricing and all other terms	1080
and conditions, including any deferrals and any future recovery of	1081
deferrals, continues to be favorable in the aggregate and during	1082
the remaining term of the plan as compared to the expected	1083
results that would otherwise apply under section 4928.142 of the	1084
Revised Code. If the test results are in the negative, the	1085
commission may terminate the electric security plan, but not	1086
until it shall have provided interested parties with notice and	1087
an opportunity to be heard. The commission may impose such	1088
conditions on the plan's termination as it considers reasonable	1089
and necessary to accommodate the transition from an approved	1090
plan to the more advantageous alternative. In the event of an	1091
electric security plan's termination pursuant to this division,	1092
the commission shall permit the continued deferral and phase-in	1093
of any amounts that occurred prior to that termination and the	1094
recovery of those amounts as contemplated under that electric	1095
security plan.	1096

Sec. 4928.144.  The public utilities commission by order may	1097
authorize any just and reasonable phase-in of any electric	1098
distribution utility rate or price established under sections	1099
4928.141 to 4928.143 of the Revised Code, and inclusive of	1100
carrying charges, as the commission considers necessary to ensure	1101
rate or price stability for consumers. If the commission's order	1102
includes such a phase-in, the order also shall provide for the	1103
creation of regulatory assets, by authorizing the deferral of	1104
incurred costs equal to the amount not collected, plus	1105
carrying charges on that amount. Further, the order shall	1106
authorize the collection of those deferrals through a	1107
nonbypassable surcharge on any such rate or price so established	1108
for the electric distribution utility by the commission.	1109

Sec. 4928.145. During a proceeding under sections 4928.141 to	1110
4928.144 of the Revised Code and upon submission of an appropriate	1111
discovery request, an electric distribution utility shall make	1112
available to the requesting party every contract or agreement that	1113
is between the electric distribution utility and a party to the	1114
proceeding and that is relevant to the proceeding, subject to such	1115
protection for proprietary or confidential information as is	1116
determined appropriate by the public utilities commission.	1117

Sec. 4928.146. Nothing in sections 4928.141 to 4928.145 of	1118
the Revised Code precludes or prohibits an electric distribution	1119
utility providing competitive retail electric service to electric	1120
load centers within the certified territory of another such	1121
utility.	1122

Sec. 4928.151. The public utilities commission shall adopt	1123
and enforce rules prescribing a uniform, statewide policy	1124
regarding electric transmission and distribution line extensions	1125
and requisite substations and related facilities that are	1126
requested by nonresidential customers of electric utilities, so	1127
that, on and after the effective date of the initial rules so	1128
adopted, all such utilities apply the same policies and charges to	1129
those customers. Initial rules shall be adopted not later than six	1130
months after the effective date of this section. The rules shall	1131
address the just and reasonable allocation to and utility recovery	1132
from the requesting customer or other customers of the utility of	1133
all costs of any such line extension and any requisite substation	1134
or related facility, including, but not limited to, the costs of	1135
necessary technical studies, operations and maintenance costs, and	1136
capital costs, including a return on capital costs.	1137

Sec. 4928.17.  (A) Except as otherwise provided in sections	1138
4928.142 or 4928.143 or 4928.31 to 4928.40 of the Revised Code and	1139
beginning on the starting date of competitive retail electric	1140
service, no electric utility shall engage in this state, either	1141
directly or through an affiliate, in the businesses of supplying	1142
a noncompetitive retail electric service and supplying a	1143
competitive retail electric service, or in the businesses of	1144
supplying a noncompetitive retail electric service and supplying	1145
a product or service other than retail electric service, unless	1146
the utility implements and operates under a corporate separation	1147
plan that is approved by the public utilities commission under	1148
this section, is consistent with the policy specified in section	1149
4928.02 of the Revised Code, and achieves all of the following:	1150

(1) The plan provides, at minimum, for the provision of the	1151
competitive retail electric service or the nonelectric product or	1152
service through a fully separated affiliate of the utility, and	1153
the plan includes separate accounting requirements, the code of	1154
conduct as ordered by the commission pursuant to a rule it shall	1155
adopt under division (A) of section 4928.06 of the Revised Code,	1156
and such other measures as are necessary to effectuate the policy	1157
specified in section 4928.02 of the Revised Code.	1158

(2) The plan satisfies the public interest in preventing	1159
unfair competitive advantage and preventing the abuse of market	1160
power.	1161

(3) The plan is sufficient to ensure that the utility will	1162
not extend any undue preference or advantage to any affiliate,	1163
division, or part of its own business engaged in the business of	1164
supplying the competitive retail electric service or nonelectric	1165
product or service, including, but not limited to, utility	1166
resources such as trucks, tools, office equipment, office space,	1167
supplies, customer and marketing information, advertising, billing	1168
and mailing systems, personnel, and training, without compensation	1169
based upon fully loaded embedded costs charged to the affiliate;	1170
and to ensure that any such affiliate, division, or part will not	1171
receive undue preference or advantage from any affiliate,	1172
division, or part of the business engaged in business of supplying	1173
the noncompetitive retail electric service. No such utility,	1174
affiliate, division, or part shall extend such undue preference.	1175
Notwithstanding any other division of this section, a utility's	1176
obligation under division (A)(3) of this section shall be	1177
effective January 1, 2000.	1178

(B) The commission may approve, modify and approve, or	1179
disapprove a corporate separation plan filed with the commission	1180
under division (A) of this section. As part of the code of conduct	1181
required under division (A)(1) of this section, the commission	1182
shall adopt rules pursuant to division (A) of section 4928.06 of	1183
the Revised Code regarding corporate separation and procedures for	1184
plan filing and approval. The rules shall include limitations on	1185
affiliate practices solely for the purpose of maintaining a	1186
separation of the affiliate's business from the business of the	1187
utility to prevent unfair competitive advantage by virtue of that	1188
relationship. The rules also shall include an opportunity for any	1189
person having a real and substantial interest in the corporate	1190
separation plan to file specific objections to the plan and	1191
propose specific responses to issues raised in the objections,	1192
which objections and responses the commission shall address in its	1193
final order. Prior to commission approval of the plan, the	1194
commission shall afford a hearing upon those aspects of the plan	1195
that the commission determines reasonably require a hearing. The	1196
commission may reject and require refiling of a substantially	1197
inadequate plan under this section.	1198

(C) The commission shall issue an order approving or	1199
modifying and approving a corporate separation plan under this	1200
section, to be effective on the date specified in the order, only	1201
upon findings that the plan reasonably complies with the	1202
requirements of division (A) of this section and will provide for	1203
ongoing compliance with the policy specified in section 4928.02 of	1204
the Revised Code. However, for good cause shown, the commission	1205
may issue an order approving or modifying and approving a	1206
corporate separation plan under this section that does not comply	1207
with division (A)(1) of this section but complies with such	1208
functional separation requirements as the commission authorizes to	1209
apply for an interim period prescribed in the order, upon a	1210
finding that such alternative plan will provide for ongoing	1211
compliance with the policy specified in section 4928.02 of the	1212
Revised Code.	1213

(D) Any party may seek an amendment to a corporate separation	1214
plan approved under this section, and the commission, pursuant to	1215
a request from any party or on its own initiative, may order as it	1216
considers necessary the filing of an amended corporate separation	1217
plan to reflect changed circumstances.	1218

(E) Notwithstanding section 4905.20, 4905.21, 4905.46, or	1219
4905.48 of the Revised Code, anNo electric distribution utility	1220
may divest itself ofshall sell or transfer any generating asset	1221
it wholly or partly owns at any time without obtaining prior	1222
commission approval, subject to the provisions of Title XLIX of	1223
the Revised Code relating to the transfer of transmission,	1224
distribution, or ancillary service provided by such generating	1225
asset.	1226

Sec. 4928.20.  (A) The legislative authority of a municipal	1227
corporation may adopt an ordinance, or the board of township	1228
trustees of a township or the board of county commissioners of a	1229
county may adopt a resolution, under which, on or after the	1230
starting date of competitive retail electric service, it may	1231
aggregate in accordance with this section the retail electrical	1232
loads located, respectively, within the municipal corporation,	1233
township, or unincorporated area of the county and, for that	1234
purpose, may enter into service agreements to facilitate for those	1235
loads the sale and purchase of electricity. The legislative	1236
authority or board also may exercise such authority jointly with	1237
any other such legislative authority or board. For customers that	1238
are not mercantile commercial customers, an ordinance or	1239
resolution under this division shall specify whether the	1240
aggregation will occur only with the prior, affirmative consent of	1241
each person owning, occupying, controlling, or using an electric	1242
load center proposed to be aggregated or will occur automatically	1243
for all such persons pursuant to the opt-out requirements of	1244
division (D) of this section. The aggregation of mercantile	1245
commercial customers shall occur only with the prior, affirmative	1246
consent of each such person owning, occupying, controlling, or	1247
using an electric load center proposed to be aggregated. Nothing	1248
in this division, however, authorizes the aggregation of the	1249
retail electric loads of an electric load center, as defined in	1250
section 4933.81 of the Revised Code, that is located in the	1251
certified territory of a nonprofit electric supplier under	1252
sections 4933.81 to 4933.90 of the Revised Code or an electric	1253
load center served by transmission or distribution facilities of a	1254
municipal electric utility.	1255

(B) If an ordinance or resolution adopted under division (A)	1256
of this section specifies that aggregation of customers that are	1257
not mercantile commercial customers will occur automatically as	1258
described in that division, the ordinance or resolution shall	1259
direct the board of elections to submit the question of the	1260
authority to aggregate to the electors of the respective municipal	1261
corporation, township, or unincorporated area of a county at a	1262
special election on the day of the next primary or general	1263
election in the municipal corporation, township, or county. The	1264
legislative authority or board shall certify a copy of the	1265
ordinance or resolution to the board of elections not less than	1266
seventy-five days before the day of the special election. No	1267
ordinance or resolution adopted under division (A) of this section	1268
that provides for an election under this division shall take	1269
effect unless approved by a majority of the electors voting upon	1270
the ordinance or resolution at the election held pursuant to this	1271
division.	1272

(C) Upon the applicable requisite authority under divisions	1273
(A) and (B) of this section, the legislative authority or board	1274
shall develop a plan of operation and governance for the	1275
aggregation program so authorized. Before adopting a plan under	1276
this division, the legislative authority or board shall hold at	1277
least two public hearings on the plan. Before the first hearing,	1278
the legislative authority or board shall publish notice of the	1279
hearings once a week for two consecutive weeks in a newspaper of	1280
general circulation in the jurisdiction. The notice shall	1281
summarize the plan and state the date, time, and location of each	1282
hearing.	1283

(D) No legislative authority or board, pursuant to an	1284
ordinance or resolution under divisions (A) and (B) of this	1285
section that provides for automatic aggregation of customers that	1286
are not mercantile commercial customers as described in division	1287
(A) of this section, shall aggregate the electrical load of any	1288
electric load center located within its jurisdiction unless it in	1289
advance clearly discloses to the person owning, occupying,	1290
controlling, or using the load center that the person will be	1291
enrolled automatically in the aggregation program and will remain	1292
so enrolled unless the person affirmatively elects by a stated	1293
procedure not to be so enrolled. The disclosure shall state	1294
prominently the rates, charges, and other terms and conditions of	1295
enrollment. The stated procedure shall allow any person enrolled	1296
in the aggregation program the opportunity to opt out of the	1297
program every twothree years, without paying a switching fee. Any	1298
such person that opts out of the aggregation program pursuant to	1299
the stated procedure shall default to the standard service offer	1300
provided under division (A) of section 4928.14 or division (D) of	1301
section 4928.35 of the Revised Code until the person chooses an	1302
alternative supplier.	1303

(E)(1) With respect to a governmental aggregation for a	1304
municipal corporation that is authorized pursuant to divisions (A)	1305
to (D) of this section, resolutions may be proposed by initiative	1306
or referendum petitions in accordance with sections 731.28 to	1307
731.41 of the Revised Code.	1308

(2) With respect to a governmental aggregation for a township	1309
or the unincorporated area of a county, which aggregation is	1310
authorized pursuant to divisions (A) to (D) of this section,	1311
resolutions may be proposed by initiative or referendum petitions	1312
in accordance with sections 731.28 to 731.40 of the Revised Code,	1313
except that:	1314

(a) The petitions shall be filed, respectively, with the	1315
township fiscal officer or the board of county commissioners, who	1316
shall perform those duties imposed under those sections upon the	1317
city auditor or village clerk.	1318

(b) The petitions shall contain the signatures of not less	1319
than ten per cent of the total number of electors in,	1320
respectively, the township or the unincorporated area of the	1321
county who voted for the office of governor at the preceding	1322
general election for that office in that area.	1323

(F) A governmental aggregator under division (A) of this	1324
section is not a public utility engaging in the wholesale purchase	1325
and resale of electricity, and provision of the aggregated service	1326
is not a wholesale utility transaction. A governmental aggregator	1327
shall be subject to supervision and regulation by the public	1328
utilities commission only to the extent of any competitive retail	1329
electric service it provides and commission authority under this	1330
chapter.	1331

(G) This section does not apply in the case of a municipal	1332
corporation that supplies such aggregated service to electric load	1333
centers to which its municipal electric utility also supplies a	1334
noncompetitive retail electric service through transmission or	1335
distribution facilities the utility singly or jointly owns or	1336
operates.	1337

(H) A governmental aggregator shall not include in its	1338
aggregation the accounts of any of the following:	1339

(1) A customer that has opted out of the aggregation;

1340

(2) A customer in contract with a certified competitive	1341
retail electric services provider;	1342

(3) A customer that has a special contract with an electric	1343
distribution utility;	1344

(4) A customer that is not located within the governmental	1345
aggregator's governmental boundaries;	1346

(5) Subject to division (C) of section 4928.21 of the Revised	1347
Code, a customer who appears on the "do not aggregate" list	1348
maintained under that section.	1349

Sec. 4928.24. The public utilities commission shall employ a	1350
federal energy advocate to monitor the activities of the federal	1351
energy regulatory commission and other federal agencies and to	1352
advocate on behalf of the interests of retail electric service	1353
consumers in this state. The attorney general shall represent the	1354
advocate before the federal energy regulatory commission and other	1355
federal agencies. Among other duties assigned to the advocate by	1356
the commission, the advocate shall examine the value of the	1357
participation of this state's electric utilities in regional	1358
transmission organizations and submit a report to the public	1359
utilities commission on whether continued participation of those	1360
utilities is in the interest of those consumers.	1361

Sec. 4928.31.  (A) Not later than ninety days after the	1362
effective date of this section, an electric utility supplying	1363
retail electric service in this state on that date shall file with	1364
the public utilities commission a plan for the utility's provision	1365
of retail electric service in this state during the market	1366
development period. This transition plan shall be in such form as	1367
the commission shall prescribe by rule adopted under division (A)	1368
of section 4928.06 of the Revised Code and shall include all of	1369
the following:	1370

(1) A rate unbundling plan that specifies, consistent with	1371
divisions (A)(1) to (7) of section 4928.34 of the Revised Code and	1372
any rules adopted by the commission under division (A) of section	1373
4928.06 of the Revised Code, the unbundles components for electric	1374
generation, transmission, and distribution service and such other	1375
unbundled service components as the commission requires, to be	1376
charged by the utility beginning on the starting date of	1377
competitive retail electric service and that includes information	1378
the commission requires to fix and determine those components;	1379

(2) A corporate separation plan consistent with section	1380
4928.17 of the Revised Code and any rules adopted by the	1381
commission under division (A) of section 4928.06 of the Revised	1382
Code;	1383

(3) Such plan or plans as the commission requires to address	1384
operational support systems and any other technical implementation	1385
issues pertaining to competitive retail electric service	1386
consistent with any rules adopted by the commission under division	1387
(A) of section 4928.06 of the Revised Code;	1388

(4) An employee assistance plan for providing severance,	1389
retraining, early retirement, retention, outplacement, and other	1390
assistance for the utility's employees whose employment is	1391
affected by electric industry restructuring under this chapter;	1392

(5) A consumer education plan consistent with former section	1393
4928.42 of the Revised Code and any rules adopted by the	1394
commission under division (A) of section 4928.06 of the Revised	1395
Code.	1396

A transition plan under this section may include tariff terms	1397
and conditions to address reasonable requirements for changing	1398
suppliers, length of commitment by a customer for service, and	1399
such other matters as are necessary to accommodate electric	1400
restructuring. Additionally, a transition plan under this section	1401
may include an application for the opportunity to receive	1402
transition revenues as authorized under sections 4928.31 to	1403
4928.40 of the Revised Code, which application shall be consistent	1404
with those sections and any rules adopted by the commission under	1405
division (A) of section 4928.06 of the Revised Code. The	1406
transition plan also may include a plan for the independent	1407
operation of the utility's transmission facilities consistent with	1408
section 4928.12 of the Revised Code, division (A)(13) of section	1409
4928.34 of the Revised Code, and any rules adopted by the	1410
commission under division (A) of section 4928.06 of the Revised	1411
Code.	1412

The commission may reject and require refiling, in whole or	1413
in part, of any substantially inadequate transition plan.	1414

(B) The electric utility shall provide public notice of its	1415
filing under division (A) of this section, in a form and manner	1416
that the commission shall prescribe by rule adopted under division	1417
(A) of section 4928.06 of the Revised Code. However, the adoption	1418
of rules regarding the public notice under this division,	1419
regarding the form of the transition plan under division (A) of	1420
this section, and regarding procedures for expedited discovery	1421
under division (A) of section 4928.32 of the Revised Code are not	1422
subject to division (D) of section 111.15 of the Revised Code.	1423

Sec. 4928.34.  (A) The public utilities commission shall not	1424
approve or prescribe a transition plan under division (A) or (B)	1425
of section 4928.33 of the Revised Code unless the commission first	1426
makes all of the following determinations:	1427

(1) The unbundled components for the electric transmission	1428
component of retail electric service, as specified in the	1429
utility's rate unbundling plan required by division (A)(1) of	1430
section 4928.31 of the Revised Code, equal the tariff rates	1431
determined by the federal energy regulatory commission that are in	1432
effect on the date of the approval of the transition plan under	1433
sections 4928.31 to 4928.40 of the Revised Code, as each such rate	1434
is determined applicable to each particular customer class and	1435
rate schedule by the commission. The unbundled transmission	1436
component shall include a sliding scale of charges under division	1437
(B) of section 4905.31 of the Revised Code to ensure that refunds	1438
determined or approved by the federal energy regulatory commission	1439
are flowed through to retail electric customers.	1440

(2) The unbundled components for retail electric distribution	1441
service in the rate unbundling plan equal the difference between	1442
the costs attributable to the utility's transmission and	1443
distribution rates and charges under its schedule of rates and	1444
charges in effect on the effective date of this section, based	1445
upon the record in the most recent rate proceeding of the utility	1446
for which the utility's schedule was established, and the tariff	1447
rates for electric transmission service determined by the federal	1448
energy regulatory commission as described in division (A)(1) of	1449
this section.	1450

(3) All other unbundled components required by the commission	1451
in the rate unbundling plan equal the costs attributable to the	1452
particular service as reflected in the utility's schedule of rates	1453
and charges in effect on the effective date of this section.	1454

(4) The unbundled components for retail electric generation	1455
service in the rate unbundling plan equal the residual amount	1456
remaining after the determination of the transmission,	1457
distribution, and other unbundled components, and after any	1458
adjustments necessary to reflect the effects of the amendment of	1459
section 5727.111 of the Revised Code by Sub. S.B. No. 3 of the	1460
123rd general assembly.	1461

(5) All unbundled components in the rate unbundling plan have	1462
been adjusted to reflect any base rate reductions on file with the	1463
commission and as scheduled to be in effect by December 31, 2005,	1464
under rate settlements in effect on the effective date of this	1465
section. However, all earnings obligations, restrictions, or caps	1466
imposed on an electric utility in a commission order prior to the	1467
effective date of this section are void.	1468

(6) Subject to division (A)(5) of this section, the total of	1469
all unbundled components in the rate unbundling plan are capped	1470
and shall equal during the market development period, except as	1471
specifically provided in this chapter, the total of all rates and	1472
charges in effect under the applicable bundled schedule of the	1473
electric utility pursuant to section 4905.30 of the Revised Code	1474
in effect on the day before the effective date of this section,	1475
including the transition charge determined under section 4928.40	1476
of the Revised Code, adjusted for any changes in the taxation of	1477
electric utilities and retail electric service under Sub. S.B. No.	1478
3 of the 123rd General Assembly, the universal service rider	1479
authorized by section 4928.51 of the Revised Code, and the	1480
temporary rider authorized by section 4928.61 of the Revised Code.	1481
For the purpose of this division, the rate cap applicable to a	1482
customer receiving electric service pursuant to an arrangement	1483
approved by the commission under section 4905.31 of the Revised	1484
Code is, for the term of the arrangement, the total of all rates	1485
and charges in effect under the arrangement. For any rate schedule	1486
filed pursuant to section 4905.30 of the Revised Code or any	1487
arrangement subject to approval pursuant to section 4905.31 of the	1488
Revised Code, the initial tax-related adjustment to the rate cap	1489
required by this division shall be equal to the rate of taxation	1490
specified in section 5727.81 of the Revised Code and applicable to	1491
the schedule or arrangement. To the extent such total annual	1492
amount of the tax-related adjustment is greater than or less than	1493
the comparable amount of the total annual tax reduction	1494
experienced by the electric utility as a result of the provisions	1495
of Sub. S.B. No. 3 of the 123RD123rd general assembly, such	1496
difference shall be addressed by the commission through accounting	1497
procedures, refunds, or an annual surcharge or credit to	1498
customers, or through other appropriate means, to avoid placing	1499
the financial responsibility for the difference upon the electric	1500
utility or its shareholders. Any adjustments in the rate of	1501
taxation specified in 5727.81 of the Revised Code section shall	1502
not occur without a corresponding adjustment to the rate cap for	1503
each such rate schedule or arrangement. The department of taxation	1504
shall advise the commission and self-assessors under section	1505
5727.81 of the Revised Code prior to the effective date of any	1506
change in the rate of taxation specified under that section, and	1507
the commission shall modify the rate cap to reflect that	1508
adjustment so that the rate cap adjustment is effective as of the	1509
effective date of the change in the rate of taxation. This	1510
division shall be applied, to the extent possible, to eliminate	1511
any increase in the price of electricity for customers that	1512
otherwise may occur as a result of establishing the taxes	1513
contemplated in section 5727.81 of the Revised Code.	1514

(7) The rate unbundling plan complies with any rules adopted	1515
by the commission under division (A) of section 4928.06 of the	1516
Revised Code.	1517

(8) The corporate separation plan required by division (A)(2)	1518
of section 4928.31 of the Revised Code complies with section	1519
4928.17 of the Revised Code and any rules adopted by the	1520
commission under division (A) of section 4928.06 of the Revised	1521
Code.	1522

(9) Any plan or plans the commission requires to address	1523
operational support systems and any other technical implementation	1524
issues pertaining to competitive retail electric service comply	1525
with any rules adopted by the commission under division (A) of	1526
section 4928.06 of the Revised Code.	1527

(10) The employee assistance plan required by division (A)(4)	1528
of section 4928.31 of the Revised Code sufficiently provides	1529
severance, retraining, early retirement, retention, outplacement,	1530
and other assistance for the utility's employees whose employment	1531
is affected by electric industry restructuring under this chapter.	1532

(11) The consumer education plan required under division	1533
(A)(5) of section 4928.31 of the Revised Code complies with former	1534
section 4928.42 of the Revised Code and any rules adopted by the	1535
commission under division (A) of section 4928.06 of the Revised	1536
Code.	1537

(12) The transition revenues for which an electric utility is	1538
authorized a revenue opportunity under sections 4928.31 to 4928.40	1539
of the Revised Code are the allowable transition costs of the	1540
utility as such costs are determined by the commission pursuant to	1541
section 4928.39 of the Revised Code, and the transition charges	1542
for the customer classes and rate schedules of the utility are the	1543
charges determined pursuant to section 4928.40 of the Revised	1544
Code.	1545

(13) Any independent transmission plan included in the	1546
transition plan filed under section 4928.31 of the Revised Code	1547
reasonably complies with section 4928.12 of the Revised Code and	1548
any rules adopted by the commission under division (A) of section	1549
4928.06 of the Revised Code, unless the commission, for good cause	1550
shown, authorizes the utility to defer compliance until an order	1551
is issued under division (G) of section 4928.35 of the Revised	1552
Code.	1553

(14) The utility is in compliance with sections 4928.01 to	1554
4928.11 of the Revised Code and any rules or orders of the	1555
commission adopted or issued under those sections.	1556

(15) All unbundled components in the rate unbundling plan	1557
have been adjusted to reflect the elimination of the tax on gross	1558
receipts imposed by section 5727.30 of the Revised Code.	1559

In addition, a transition plan approved by the commission	1560
under section 4928.33 of the Revised Code but not containing an	1561
approved independent transmission plan shall contain the express	1562
conditions that the utility will comply with an order issued under	1563
division (G) of section 4928.35 of the Revised Code.	1564

(B) Subject to division (E) of section 4928.17 of the Revised	1565
Code, if the commission finds that any part of the transition plan	1566
would constitute an abandonment under sections 4905.20 and 4905.21	1567
of the Revised Code, the commission shall not approve that part of	1568
the transition plan unless it makes the finding required for	1569
approval of an abandonment application under section 4905.21 of	1570
the Revised Code. Sections 4905.20 and 4905.21 of the Revised Code	1571
otherwise shall not apply to a transition plan under sections	1572
4928.31 to 4928.40 of the Revised Code.	1573

Sec. 4928.35.  (A) Upon approval of its transition plan under	1574
sections 4928.31 to 4928.40 of the Revised Code, an electric	1575
utility shall file in accordance with section 4905.30 of the	1576
Revised Code schedules containing the unbundled rate components	1577
set in the approved plan in accordance with section 4928.34 of the	1578
Revised Code. The schedules shall be in effect for the duration of	1579
the utility's market development period, shall be subject to the	1580
cap specified in division (A)(6) of section 4928.34 of the Revised	1581
Code, and shall not be adjusted during that period by the public	1582
utilities commission except as otherwise authorized by division	1583
(B) of this section or as otherwise authorized by federal law or	1584
except to reflect any change in tax law or tax regulation that has	1585
a material effect on the electric utility.	1586

(B) Efforts shall be made to reach agreements with electric	1587
utilities in matters of litigation regarding property valuation	1588
issues. Irrespective of those efforts, the unbundled components	1589
for an electric utility's retail electric generation service and	1590
distribution service, as provided in division (A) of this section,	1591
are not subject to adjustment for the utility's market development	1592
period, except that the commission shall order an equitable	1593
reduction in those components for all customer classes to reflect	1594
any refund a utility receives as a result of the resolution of	1595
utility personal property tax valuation litigation that is	1596
resolved on or after the effective date of this section and not	1597
later than December 31, 2005. Immediately upon the issuance of	1598
that order, the electric utility shall file revised rate schedules	1599
under section 4909.18 of the Revised Code to effect the order.	1600

(C) The schedule under division (A) of this section	1601
containing the unbundled distribution components shall provide	1602
that electric distribution service under the schedule will be	1603
available to all retail electric service customers in the electric	1604
utility's certified territory and their suppliers on a	1605
nondiscriminatory and comparable basis on and after the starting	1606
date of competitive retail electric service. The schedule also	1607
shall include an obligation to build distribution facilities when	1608
necessary to provide adequate distribution service, provided that	1609
a customer requesting that service may be required to pay all or	1610
part of the reasonable incremental cost of the new facilities, in	1611
accordance with rules, policy, precedents, or orders of the	1612
commission.	1613

(D) During the market development period, an electric	1614
distribution utility shall provide consumers on a comparable and	1615
nondiscriminatory basis within its certified territory a standard	1616
service offer of all competitive retail electric services	1617
necessary to maintain essential electric service to consumers,	1618
including a firm supply of electric generation service priced in	1619
accordance with the schedule containing the utility's unbundled	1620
generation service component. Immediately upon approval of its	1621
transition plan, the utility shall file the standard service offer	1622
with the commission under section 4909.18 of the Revised Code,	1623
during the market development period. The failure of a supplier to	1624
deliver retail electric generation service shall result in the	1625
supplier's customers, after reasonable notice, defaulting to the	1626
utility's standard service offer filed under this division until	1627
the customer chooses an alternative supplier. A supplier is deemed	1628
under this section to have failed to deliver such service if any	1629
of the conditions specified in divisions (B)(1) to (4) of section	1630
4928.14 of the Revised Code is met.	1631

(E) An amendment of a corporate separation plan contained in	1632
a transition plan approved by the commission under section 4928.33	1633
of the Revised Code shall be filed and approved as a corporate	1634
separation plan pursuant to section 4928.17 of the Revised Code.	1635

(F) Any change to an electric utility's opportunity to	1636
receive transition revenues under a transition plan approved in	1637
accordance with section 4928.33 of the Revised Code shall be	1638
authorized only as provided in sections 4928.31 to 4928.40 of the	1639
Revised Code.	1640

(G) The commission, by order, shall require each electric	1641
utility whose approved transition plan did not include an	1642
independent transmission plan as described in division (A)(13) of	1643
section 4928.34 of the Revised Code to be a member of, and	1644
transfer control of transmission facilities it owns or controls in	1645
this state to, one or more qualifying transmission entities, as	1646
described in division (B) of section 4928.12 of the Revised Code,	1647
that are planned to be operational on and after December 31, 2003.	1648
However, the commission may extend that date if, for reasons	1649
beyond the control of the utility, a qualifying transmission	1650
entity is not planned to be operational on that date. The	1651
commission's order may specify an earlier date on which the	1652
transmission entity or entities are planned to be operational if	1653
the commission considers it necessary to carry out the policy	1654
specified in section 4928.02 of the Revised Code or to encourage	1655
effective competition in retail electric service in this state.	1656

Upon the issuance of the order, each such utility shall file	1657
with the commission a plan for such independent operation of the	1658
utility's transmission facilities consistent with this division.	1659
The commission may reject and require refiling of any	1660
substantially inadequate plan submitted under this division.	1661

After reasonable notice and opportunity for hearing, the	1662
commission shall approve the plan upon a finding that the plan	1663
will result in the utility's compliance with the order, this	1664
division, and any rules adopted under division (A) of section	1665
4928.06 of the Revised Code. The approved independent transmission	1666
plan shall be deemed a part of the utility's transition plan for	1667
purposes of sections 4928.31 to 4928.40 of the Revised Code.	1668

Sec. 4928.61.  (A) There is hereby established in the state	1669
treasury the advanced energy fund, into which shall be deposited	1670
all advanced energy revenues remitted to the director of	1671
development under division (B) of this section, for the exclusive	1672
purposes of funding the advanced energy program created under	1673
section 4928.62 of the Revised Code and paying the program's	1674
administrative costs. Interest on the fund shall be credited to	1675
the fund.	1676

(B) Advanced energy revenues shall include all of the	1677
following:	1678

(1) Revenues remitted to the director after collection by	1679
each electric distribution utility in this state of a temporary	1680
rider on retail electric distribution service rates as such rates	1681
are determined by the public utilities commission pursuant to this	1682
chapter. The rider shall be a uniform amount statewide, determined	1683
by the director of development, after consultation with the public	1684
benefits advisory board created by section 4928.58 of the Revised	1685
Code. The amount shall be determined by dividing an aggregate	1686
revenue target for a given year as determined by the director,	1687
after consultation with the advisory board, by the number of	1688
customers of electric distribution utilities in this state in the	1689
prior year. Such aggregate revenue target shall not exceed more	1690
than fifteen million dollars in any year through 2005 and shall	1691
not exceed more than five million dollars in any year after 2005.	1692
The rider shall be imposed beginning on the effective date of the	1693
amendment of this section by Sub. H.B. 251 of the 126th general	1694
assembly, January 4, 2007, and shall terminate at the end of ten	1695
years following the starting date of competitive retail electric	1696
service or until the advanced energy fund, including interest,	1697
reaches one hundred million dollars, whichever is first.	1698

(2) Revenues from payments, repayments, and collections	1699
under the advanced energy program and from program income;	1700

(3) Revenues remitted to the director after collection by a	1701
municipal electric utility or electric cooperative in this state	1702
upon the utility's or cooperative's decision to participate in the	1703
advanced energy fund;	1704

(4) Revenues from renewable energy compliance payments as	1705
provided under division (C)(2) of section 4928.64 of the Revised	1706
Code;	1707

(5) Revenue from forfeitures under division (C) of section	1708
4928.66 of the Revised Code;	1709

(6) Interest earnings on the advanced energy fund.

1710

(C)(1) Each electric distribution utility in this state shall	1711
remit to the director on a quarterly basis the revenues described	1712
in divisions (B)(1) and (2) of this section. Such remittances	1713
shall occur within thirty days after the end of each calendar	1714
quarter.	1715

(2) Each participating electric cooperative and participating	1716
municipal electric utility shall remit to the director on a	1717
quarterly basis the revenues described in division (B)(3) of this	1718
section. Such remittances shall occur within thirty days after	1719
the end of each calendar quarter. For the purpose of division	1720
(B)(3) of this section, the participation of an electric	1721
cooperative or municipal electric utility in the energy efficiency	1722
revolving loan program as it existed immediately prior to the	1723
effective date of the amendment of this section by Sub. H.B. 251	1724
of the 126th general assembly, January 4, 2007, does not	1725
constitute a decision to participate in the advanced energy fund	1726
under this section as so amended.	1727

(3) All remittances under divisions (C)(1) and (2) of this	1728
section shall continue only until the end of ten years following	1729
the starting date of competitive retail electric service or until	1730
the advanced energy fund, including interest, reaches one hundred	1731
million dollars, whichever is first.	1732

(D) Any moneys collected in rates for non-low-income customer	1733
energy efficiency programs, as of October 5, 1999, and not	1734
contributed to the energy efficiency revolving loan fund	1735
authorized under this section prior to the effective date of its	1736
amendment by Sub. H.B. 251 of the 126th general assembly, January	1737
4, 2007, shall be used to continue to fund cost-effective,	1738
residential energy efficiency programs, be contributed into the	1739
universal service fund as a supplement to that required under	1740
section 4928.53 of the Revised Code, or be returned to ratepayers	1741
in the form of a rate reduction at the option of the affected	1742
electric distribution utility.	1743

Sec. 4928.621. (A) Any Edison technology center in this state	1744
is eligible to apply for and receive assistance pursuant to	1745
section 4928.62 of the Revised Code for the purposes of creating	1746
an advanced energy manufacturing center in this state that will	1747
provide for the exchange of information and expertise regarding	1748
advanced energy, assisting with the design of advanced energy	1749
projects, developing workforce training programs for such	1750
projects, and encouraging investment in advanced energy	1751
manufacturing technologies for advanced energy products and	1752
investment in sustainable manufacturing operations that create	1753
high-paying jobs in this state.	1754

(B) Any university or group of universities in this state	1755
that conducts research on any advanced energy resource or any	1756
not-for-profit corporation formed to address issues affecting the	1757
price and availability of electricity and having members that are	1758
small businesses may apply for and receive assistance pursuant to	1759
section 4928.62 of the Revised Code for the purpose of	1760
encouraging research in this state that is directed at innovation	1761
in or the refinement of those resources or for the purpose of	1762
educational outreach regarding those resources and, to that end,	1763
shall use that assistance to establish such a program of	1764
research or education outreach. Any such educational outreach	1765
shall be directed at an increase in, innovation regarding, or	1766
refinement of access by or of application or understanding of	1767
businesses and consumers in this state regarding, advanced	1768
energy resources.	1769

(C) Any independent group located in this state the express	1770
objective of which is to educate small businesses in this state	1771
regarding renewable energy resources and energy efficiency	1772
programs, or any small business located in this state electing to	1773
utilize an advanced energy project or participate in an energy	1774
efficiency program, is eligible to apply for and receive	1775
assistance pursuant to section 4928.62 of the Revised Code.	1776

(D) Nothing in this section shall be construed as limiting	1777
the eligibility of any qualifying entity to apply for or receive	1778
assistance pursuant to section 4928.62 of the Revised Code.	1779

Sec. 4928.64. (A)(1) As used in sections 4928.64 and 4928.65	1780
of the Revised Code, "alternative energy resource" means an	1781
advanced energy resource or renewable energy resource, as	1782
defined in section 4928.01 of the Revised Code that has a	1783
placed-in-service date of January 1, 1998, or after; or a	1784
mercantile customer-sited advance energy resource or renewable	1785
energy resource, whether new or existing, that the mercantile	1786
customer commits for integration into the electric distribution	1787
utility's demand-response, energy efficiency, or peak demand	1788
reduction programs as provided under division (B)(2)(b) of	1789
section 4928.66 of the Revised Code, including, but not limited	1790
to, any of the following:	1791

(a) A resource that has the effect of improving the	1792
relationship between real and reactive power;	1793

(b) A resource that makes efficient use of waste heat or	1794
other thermal capabilities owned or controlled by a mercantile	1795
customer;	1796

(c) Storage technology that allows a mercantile customer more	1797
flexibility to modify its demand or load and usage	1798
characteristics;	1799

(d) Electric generation equipment owned or controlled by a	1800
mercantile customer that uses an advanced energy resource or	1801
renewable energy resource;	1802

(e) Any advanced energy resource or renewable energy resource	1803
of the mercantile customer that can be utilized effectively as	1804
part of any advanced energy resource plan of an electric	1805
distribution utility and would otherwise qualify as an alternative	1806
energy resource if it were utilized directly by an electric	1807
distribution utility.	1808

(2) For the purpose of this section and as it considers	1809
appropriate, the public utilities commission may classify any new	1810
technology as such an advanced energy resource or a renewable	1811
energy resource.	1812

(B) By 2025 and thereafter, an electric distribution utility	1813
shall provide from alternative energy resources, including, at	1814
its discretion, alternative energy resources obtained pursuant to	1815
an electricity supply contract, a portion of the electricity	1816
supply required for its standard service offer under section	1817
4928.141 of the Revised Code, and an electric services company	1818
shall provide a portion of its electricity supply for retail	1819
consumers in this state from alternative energy resources,	1820
including, at its discretion, alternative energy resources	1821
obtained pursuant to an electricity supply contract. That portion	1822
shall equal twenty-five per cent of the total number of	1823
kilowatt hours of electricity sold by the subject utility or	1824
company to any and all retail electric consumers whose electric	1825
load centers are served by that utility and are located within	1826
the utility's certified territory or, in the case of an	1827
electric services company, are served by the company and are	1828
located within this state. However, nothing in this section	1829
precludes a utility or company from providing a greater	1830
percentage. The baseline for a utility's or company's compliance	1831
with the alternative energy resource requirements of this section	1832
shall be the average of such total kilowatt hours it sold in the	1833
preceding three calendar years, except that the commission may	1834
reduce a utility's or company's baseline to adjust for new	1835
economic growth in the utility's certified territory or, in the	1836
case of an electric services company, in the company's service	1837
area in this state.	1838

Of the alternative energy resources implemented by the	1839
subject utility or company by 2025 and thereafter:	1840

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

1841

(2) At least half shall be generated from renewable energy	1842
resources, including one-half per cent from solar energy	1843
resources, in accordance with the following benchmarks:	1844

By end of year	Renewable energy resources	Solar energy resources		1845
2009	0.25%	0.004%		1846
2010	0.50%	0.008%		1847
2011	1%	0.015%		1848
2012	1.5%	0.02%		1849
2013	2%	0.06%		1850
2014	2.5%	0.10%		1851
2015	3.5%	0.14%		1852
2016	4.5%	0.18%		1853
2017	5.5%	0.22%		1854
2018	6.5%	0.26%		1855
2019	7.5%	0.3%		1856
2020	8.5%	0.34%		1857
2021	9.5%	0.38%		1858
2022	10.5%	0.42%		1859
2023	11.5%	0.46%		1860
2024 and each calendar year thereafter	12.5%	0.5%		1861

(3) At least one-half of the renewable energy resources	1862
implemented by the utility or company shall be met through	1863
facilities located in this state; the remainder shall be met with	1864
resources that can be shown to be deliverable into this state.	1865

(C)(1) The commission annually shall review an electric	1866
distribution utility's or electric services company's compliance	1867
with the most recent applicable benchmark under division (B)(2)	1868
of this section and, in the course of that review, shall identify	1869
any undercompliance or noncompliance of the utility or company	1870
that it determines is weather-related, related to equipment or	1871
resource shortages for advanced energy or renewable energy	1872
resources as applicable, or is otherwise outside the utility's or	1873
company's control.	1874

(2) Subject to the cost cap provisions of division (C)(3) of	1875
this section, if the commission determines, after notice and	1876
opportunity for hearing, and based upon its findings in that	1877
review regarding avoidable undercompliance or noncompliance, but	1878
subject to division (C)(4) of this section, that the utility or	1879
company has failed to comply with any such benchmark, the	1880
commission shall impose a renewable energy compliance payment	1881
on the utility or company.	1882

(a) The compliance payment pertaining to the solar energy	1883
resource benchmarks under division (B)(2) of this section shall be	1884
an amount per megawatt hour of undercompliance or noncompliance in	1885
the period under review, starting at four hundred fifty dollars	1886
for 2009, four hundred dollars for 2010 and 2011, and similarly	1887
reduced every two years thereafter through 2024 by fifty dollars,	1888
to a minimum of fifty dollars.	1889

(b) The compliance payment pertaining to the renewable	1890
energy resource benchmarks under division (B)(2) of this section	1891
shall equal the number of additional renewable energy credits	1892
that the electric distribution utility or electric services	1893
company would have needed to comply with the applicable	1894
benchmark in the period under review times an amount that shall	1895
begin at forty-five dollars and shall be adjusted annually by the	1896
commission to reflect any change in the consumer price index as	1897
defined in section 101.27 of the Revised Code, but shall not be	1898
less than forty-five dollars.	1899

(c) The compliance payment shall not be passed through by the	1900
electric distribution utility or electric services company to	1901
consumers. The compliance payment shall be remitted to the	1902
commission, for deposit to the credit of the advanced energy fund	1903
created under section 4928.61 of the Revised Code. Payment of the	1904
compliance payment shall be subject to such collection and	1905
enforcement procedures as apply to the collection of a	1906
forfeiture under sections 4905.55 to 4905.60 and 4905.64 of the	1907
Revised Code.	1908

(3)(a) No electric distribution utility or electric services	1909
company, for the purpose of compliance with a specified, minimum	1910
benchmark under division (B) of this section, shall comply with,	1911
be required to comply with, or be subject to a compliance payment	1912
under division (C)(2) of this section for failure to comply with,	1913
that benchmark if compliance would result in an annual, estimated,	1914
average net increase in the total amounts paid by its customers	1915
due to the cost of the renewable energy resources that exceeds	1916
three per cent of the total amounts paid by each customer class in	1917
the previous calendar year, as determined by the commission. As	1918
used in division (C)(3) of this section, "total amounts paid by	1919
customers" means all costs for generation, transmission,	1920
distribution, metering, taxes, and all other costs comprising	1921
customer bills. Nothing in this division shall affect the right of	1922
the utility or company to construct or operate any renewable	1923
energy resource nor shall affect any electricity supply contract.	1924

(b) Not later than January 1, 2013, the commission, in	1925
consultation with the department of development, the Ohio air	1926
quality development authority, and the office of the consumers'	1927
counsel, shall review the cost cap limitation of division	1928
(C)(3)(b) of this section and report to the standing committees of	1929
the house of representatives and the senate that primarily deal	1930
with alternative energy issues regarding whether the limitation	1931
unduly constrains the procurement of renewable energy resources.	1932
The report shall include recommendations regarding whether that	1933
limitation should be maintained, eliminated, or changed.	1934

(4)(a) An electric distribution utility or electric services	1935
company may request the commission to make a force majeure	1936
determination pursuant to this division regarding all or part of	1937
the utility's or company's compliance with any minimum benchmark	1938
under division (B)(2) of this section during the period of review	1939
occurring pursuant to division (C)(5) of this section. The	1940
commission may require the electric distribution utility or	1941
electric services company to make solicitations for renewable	1942
energy resource credits as part of its default service before the	1943
utility's or company's request of force majeure under this	1944
division can be made.	1945

(b) Within ninety days after the filing of a request by an	1946
electric distribution utility or electric services company under	1947
division (C)(4)(a) of this section, the commission shall determine	1948
if renewable energy resources are reasonably available in the	1949
marketplace in sufficient quantities for the utility or company to	1950
comply with the subject minimum benchmark during the review	1951
period. In making this determination, the commission shall	1952
consider whether the electric distribution utility or electric	1953
services company has made a good faith effort to acquire	1954
sufficient renewable energy or, as applicable, solar energy	1955
resources to so comply, including, but not limited to, by banking	1956
or seeking renewable energy resource credits or by seeking the	1957
resources through long-term contracts. Additionally, the	1958
commission shall consider the availability of renewable energy or	1959
solar energy resources in this state and other jurisdictions in	1960
the PJM interconnection regional transmission organization or its	1961
successor and the midwest system operator or its successor.	1962

(c) If, pursuant to division (C)(4)(b) of this section, the	1963
commission determines that renewable energy or solar energy	1964
resources are not reasonably available to permit the electric	1965
distribution utility or electric services company to comply,	1966
during the period of review, with the subject minimum benchmark	1967
prescribed under division (B)(2) of this section, the commission	1968
shall modify that compliance obligation of the utility or company	1969
as it determines appropriate to accommodate the finding.	1970
Commission modification shall not automatically reduce the	1971
obligation for the electric distribution utility's or electric	1972
services company's compliance in subsequent years. If it modifies	1973
the electric distribution utility or electric services company	1974
obligation under division (C)(4)(c) of this section, the	1975
commission may require the utility or company, if sufficient	1976
renewable energy resource credits exist in the marketplace, to	1977
acquire additional renewable energy resource credits in subsequent	1978
years equivalent to the utility's or company's modified obligation	1979
under division (C)(4)(c) of this section.	1980

(5) The commission shall establish a process to provide for	1981
at least an annual review of the alternative energy resource	1982
market in this state and in the service territories of the	1983
regional transmission organizations that manage transmission	1984
systems located in this state. The commission shall use the	1985
results of this study to identify any needed changes to the	1986
amount of the renewable energy compliance payment specified	1987
under divisions (C)(2)(a) and (b) of this section.	1988
Specifically, the commission may increase the amount to ensure	1989
that payment of compliance payments is not used to achieve	1990
compliance with this section in lieu of actually acquiring or	1991
realizing energy derived from renewable energy resources.	1992
However, if the commission finds that the amount of the	1993
compliance payment should be otherwise changed, the commission	1994
shall present this finding to the general assembly for	1995
legislative enactment.	1996

(D)(1) The commission annually shall submit to the general	1997
assembly in accordance with section 101.68 of the Revised Code a	1998
report describing the compliance of electric distribution	1999
utilities and electric services companies with division (B) of	2000
this section and any strategy for utility and company compliance	2001
or for encouraging the use of alternative energy resources in	2002
supplying this state's electricity needs in a manner that	2003
considers available technology, costs, job creation, and	2004
economic impacts. The commission shall allow and consider	2005
public comments on the report prior to its submission to the	2006
general assembly. Nothing in the report shall be binding on any	2007
person, including any utility or company for the purpose of its	2008
compliance with any benchmark under division (B) of this	2009
section, or the enforcement of that provision under division	2010
(C) of this section.	2011

(2) The governor, in consultation with the commission	2012
chairperson, shall appoint an alternative energy advisory	2013
committee. The committee shall examine available technology for	2014
and related timetables, goals, and costs of the alternative	2015
energy resource requirements under division (B) of this section	2016
and shall submit to the commission a semiannual report of its	2017
recommendations.	2018

(E) All costs incurred by an electric distribution utility	2019
in complying with the requirements of this section shall be	2020
bypassable by any consumer that has exercised choice of supplier	2021
under section 4928.03 of the Revised Code.	2022

Sec. 4928.65. An electric distribution utility or electric	2023
services company may use renewable energy credits any time in the	2024
five calendar years following the date of their purchase or	2025
acquisition from any entity, including, but not limited to, a	2026
mercantile customer or an owner or operator of a hydroelectric	2027
generating facility that is located at a dam on a river that is	2028
within or bordering this state or within or bordering an adjoining	2029
state, for the purpose of complying with the renewable energy	2030
and solar energy resource requirements of division (B)(2) of	2031
section 4928.64 of the Revised Code. The public utilities	2032
commission shall adopt rules specifying that one unit of	2033
credit shall equal one megawatt hour of electricity derived	2034
from renewable energy resources. The rules also shall provide	2035
for this state a system of registering renewable energy	2036
credits by specifying which of any generally available	2037
registries shall be used for that purpose and not by	2038
creating a registry. That selected system of registering	2039
renewable energy credits shall allow a hydroelectric generating	2040
facility to be eligible for obtaining renewable energy credits	2041
and shall allow customer-sited projects or actions the broadest	2042
opportunities to be eligible for obtaining renewable energy	2043
credits.	2044

Sec. 4928.66. (A)(1)(a) Beginning in 2009, an electric	2045
distribution utility shall implement energy efficiency programs	2046
that achieve energy savings equivalent to at least three-tenths	2047
of one per cent of the total, annual average, and normalized	2048
kilowatt-hour sales of the electric distribution utility during	2049
the preceding three calendar years to customers in this state. The	2050
savings requirement, using such a three-year average, shall	2051
increase to an additional five-tenths of one per cent in 2010,	2052
seven-tenths of one per cent in 2011, eight-tenths of one per	2053
cent in 2012, nine-tenths of one per cent in 2013, one per cent	2054
from 2014 to 2018, and two per cent each year thereafter,	2055
achieving a cumulative, annual energy savings in excess of	2056
twenty-two per cent by the end of 2025.	2057

(b) Beginning in 2009, an electric distribution utility shall	2058
implement peak demand reduction programs designed to achieve a one	2059
per cent reduction in peak demand in 2009 and an additional	2060
seventy-five hundredths of one per cent reduction each year	2061
through 2018. In 2018, the standing committees in the house of	2062
representatives and the senate primarily dealing with energy	2063
issues shall make recommendations to the general assembly	2064
regarding future peak demand reduction targets.	2065

(2) For the purposes of divisions (A)(1)(a) and (b) of this	2066
section:	2067

(a) The baseline for energy savings under division (A)(1)(a)	2068
of this section shall be the average of the total kilowatt hours	2069
the electric distribution utility sold in the preceding three	2070
calendar years, and the baseline for a peak demand reduction under	2071
division (A)(1)(b) of this section shall be the average peak	2072
demand on the utility in the preceding three calendar years,	2073
except that the commission may reduce either baseline to adjust	2074
for new economic growth in the utility's certified territory.	2075

(b) The commission may amend the benchmarks set forth in	2076
division (A)(1)(a) or (b) of this section if, after application by	2077
the electric distribution utility, the commission determines that	2078
the amendment is necessary because the utility cannot reasonably	2079
achieve the benchmarks due to regulatory, economic, or	2080
technological reasons beyond its reasonable control.	2081

(c) Compliance with divisions (A)(1)(a) and (b) of this	2082
section shall be measured by including the effects of all	2083
demand-response programs for mercantile customers of the subject	2084
electric distribution utility and all such mercantile	2085
customer-sited energy efficiency and peak demand reduction	2086
programs, adjusted upward by the appropriate loss factors. Any	2087
mechanism designed to recover the cost of energy efficiency and	2088
peak demand reduction programs under divisions (A)(1)(a) and (b)	2089
of this section may exempt mercantile customers that commit their	2090
demand-response or other customer-sited capabilities, whether	2091
existing or new, for integration into the electric distribution	2092
utility's demand-response, energy efficiency, or peak demand	2093
reduction programs, if the commission determines that that	2094
exemption reasonably encourages such customers to commit those	2095
capabilities to those programs. If a mercantile customer makes	2096
such existing or new demand-response, energy efficiency, or peak	2097
demand reduction capability available to an electric distribution	2098
utility pursuant to division (A)(2)(c) of this section, the	2099
electric utility's baseline under division (A)(2)(a) of this	2100
section shall be adjusted to exclude the effects of all such	2101
demand-response, energy efficiency, or peak demand reduction	2102
programs that may have existed during the period used to establish	2103
the baseline. The baseline also shall be normalized for changes in	2104
numbers of customers, sales, weather, peak demand, and other	2105
appropriate factors so that the compliance measurement is not	2106
unduly influenced by factors outside the control of the electric	2107
distribution utility.	2108

(d) Programs implemented by a utility may include	2109
demand-response programs, customer-sited programs, and	2110
transmission and distribution infrastructure improvements that	2111
reduce line losses. Division (A)(2)(c) of this section shall be	2112
applied to include facilitating efforts by a mercantile customer	2113
or group of those customers to offer customer-sited	2114
demand-response, energy efficiency, or peak demand reduction	2115
capabilities to the electric distribution utility as part of a	2116
reasonable arrangement submitted to the commission pursuant to	2117
section 4905.31 of the Revised Code.	2118

(e) No programs or improvements described in division	2119
(A)(2)(d) of this section shall conflict with any statewide	2120
building code adopted by the board of building standards.	2121

(B) In accordance with rules it shall adopt, the public	2122
utilities commission shall produce and docket at the commission an	2123
annual report containing the results of its verification of the	2124
annual levels of energy efficiency and of peak demand reductions	2125
achieved by each electric distribution utility pursuant to	2126
division (A) of this section. A copy of the report shall be	2127
provided to the consumers' counsel.	2128

(C) If the commission determines, after notice and	2129
opportunity for hearing and based upon its report under division	2130
(B) of this section, that an electric distribution utility has	2131
failed to comply with an energy efficiency or peak demand	2132
reduction requirement of division (A) of this section, the	2133
commission shall assess a forfeiture on the utility as provided	2134
under sections 4905.55 to 4905.60 and 4905.64 of the Revised	2135
Code, either in the amount, per day per undercompliance or	2136
noncompliance, relative to the period of the report, equal to	2137
that prescribed for noncompliances under section 4905.54 of the	2138
Revised Code, or in an amount equal to the then existing market	2139
value of one renewable energy credit per megawatt hour of	2140
undercompliance or noncompliance. Revenue from any forfeiture	2141
assessed under this division shall be deposited to the credit	2142
of the advanced energy fund created under section 4928.61 of	2143
the Revised Code.	2144

(D) The commission may establish rules regarding the content	2145
of an application by an electric distribution utility for	2146
commission approval of a revenue decoupling mechanism under this	2147
division. Such an application shall not be considered an	2148
application to increase rates and may be included as part of a	2149
proposal to establish, continue, or expand energy efficiency or	2150
conservation programs. The commission by order may approve an	2151
application under this division if it determines both that the	2152
revenue decoupling mechanism provides for the recovery of revenue	2153
that otherwise may be foregone by the utility as a result of or in	2154
connection with the implementation by the electric distribution	2155
utility of any energy efficiency or energy conservation programs	2156
and reasonably aligns the interests of the utility and of its	2157
customers in favor of those programs.	2158

(E) The commission additionally shall adopt rules that	2159
require an electric distribution utility to provide a customer	2160
upon request with two years' consumption data in an accessible	2161
form.	2162

Sec. 4928.67.  (A)(1) Beginning on the starting date of	2163
competitive retail electric service, a retail electric service	2164
provider in this stateExcept as provided in division (A)(2) of	2165
this section, an electric utility shall develop a standard	2166
contract or tariff providing for net energy metering.	2167

Any time that the total rated generating capacity used by	2168
customer-generators is less than one per cent of the provider's	2169
aggregate customer peak demand in this state, the provider shall	2170
make this contract or tariff available to customer-generators,	2171
upon request and on a first-come, first-served basis. The	2172

That contract or tariff shall be identical in rate	2173
structure, all retail rate components, and any monthly charges,	2174
to the contract or tariff to which the same customer would be	2175
assigned if that customer were not a customer-generator.	2176

(2) An electric utility shall also develop a separate	2177
standard contract or tariff providing for net energy metering for	2178
a hospital, as defined in section 3701.01 of the Revised Code,	2179
that is also a customer-generator, subject to all of the	2180
following:	2181

(a) No limitation, including that in division (A)(1) of this	2182
section and divisions (A)(31)(a) and (d) of section 4928.01 of	2183
the Revised Code, shall apply regarding the availability of the	2184
contract or tariff to such hospital customer-generators.	2185

(b) The contract or tariff shall be based both upon the rate	2186
structure, rate components, and any charges to which the hospital	2187
would otherwise be assigned if the hospital were not a	2188
customer-generator and upon the market value of the	2189
customer-generated electricity at the time it is generated.	2190
Transmission and distribution charges in the contract or tariff	2191
shall apply to the flow of electricity both to the customer and	2192
from the customer to the electric utility.	2193

(c) The contract or tariff shall allow the hospital	2194
customer-generator to operate its electric generating facilities	2195
individually or collectively without any wattage limitation on	2196
size.	2197

(2)(B)(1) Net metering under this section shall be	2198
accomplished using a single meter capable of registering the flow	2199
of electricity in each direction. If its existing electrical	2200
meter is not capable of measuring the flow of electricity in two	2201
directions, the customer-generator shall be responsible for all	2202
expenses involved in purchasing and installing a meter that is	2203
capable of measuring electricity flow in two directions.	2204

(3) Such an(2) The electric service providerutility, at its	2205
own expense and with the written consent of the	2206
customer-generator, may install one or more additional meters to	2207
monitor the flow of electricity in each direction.	2208

(B)(3) Consistent with the other provisions of this section,	2209
the measurement of net electricity supplied or generated shall be	2210
calculated in the following manner:	2211

(1)(a) The electric service providerutility shall measure	2212
the net electricity produced or consumed during the billing	2213
period, in accordance with normal metering practices.	2214

(2)(b) If the electricity supplied by the electric service	2215
providerutility exceeds the electricity generated by the	2216
customer-generator and fed back to the electric service provider	2217
utility during the billing period, the customer-generator shall	2218
be billed for the net electricity supplied by the electric	2219
service providerutility, in accordance with normal metering	2220
practices. If electricity is provided to the electric service	2221
providerutility, the credits for that electricity shall appear	2222
in the next billing cycle.	2223

(C)(1)(4) A net metering system used by a customer-generator	2224
shall meet all applicable safety and performance standards	2225
established by the national electrical code, the institute of	2226
electrical and electronics engineers, and underwriters	2227
laboratories.	2228

(2)(C) The public utilities commission shall adopt rules	2229
relating to additional control and testing requirements for	2230
customer-generators whichthat the commission determines are	2231
necessary to protect public and worker safety and system	2232
reliability.	2233

(D) An electric service providerutility shall not require a	2234
customer-generator whose net metering system meets the standards	2235
and requirements provided for in divisions (B)(4) and (C)(1) and	2236
(D) of this section to do any of the following:	2237

(1) Comply with additional safety or performance standards;

2238

(2) Perform or pay for additional tests;

2239

(3) Purchase additional liability insurance.

2240

Sec. 4928.68.  To the extent permitted by federal law, the	2241
public utilities commission shall adopt rules establishing	2242
greenhouse gas emission reporting requirements, including	2243
participation in the climate registry, and carbon dioxide	2244
control planning requirements for each electric generating	2245
facility that is located in this state, is owned or operated by	2246
a public utility that is subject to the commission's	2247
jurisdiction, and emits greenhouse gases, including facilities	2248
in operation on the effective date of this section.	2249

Sec. 4928.69. Notwithstanding any provision of Chapter 4928.	2250
of the Revised Code and except as otherwise provided in an	2251
agreement filed with and approved by the public utilities	2252
commission under section 4905.31 of the Revised Code, an electric	2253
distribution utility shall not charge any person that is a	2254
customer of a municipal electric utility that is in existence on	2255
or before January 1, 2008, any surcharge, service termination	2256
charge, exit fee, or transition charge.	2257

Sec. 4929.01.  As used in this chapter:

2258

(A) "Alternative rate plan" means a method, alternate to the	2259
method of section 4909.15 of the Revised Code, for establishing	2260
rates and charges, under which rates and charges may be	2261
established for a commodity sales service or ancillary service	2262
that is not exempt pursuant to section 4929.04 of the Revised Code	2263
or for a distribution service. Alternative rate plans may	2264
include, but are not limited to, methods that provide adequate and	2265
reliable natural gas services and goods in this state; minimize	2266
the costs and time expended in the regulatory process; tend to	2267
assess the costs of any natural gas service or goods to the	2268
entity, service, or goods that cause such costs to be incurred;	2269
afford rate stability; promote and reward efficiency, quality of	2270
service, or cost containment by a natural gas company; or provide	2271
sufficient flexibility and incentives to the natural gas industry	2272
to achieve high quality, technologically advanced, and readily	2273
available natural gas services and goods at just and reasonable	2274
rates and charges; or establish revenue decoupling mechanisms.	2275
Alternative rate plans also may include, but are not limited to,	2276
automatic adjustments based on a specified index or changes in a	2277
specified cost or costs.	2278

(B) "Ancillary service" means a service that is ancillary to	2279
the receipt or delivery of natural gas to consumers, including,	2280
but not limited to, storage, pooling, balancing, and transmission.	2281

(C) "Commodity sales service" means the sale of natural gas	2282
to consumers, exclusive of any distribution or ancillary service.	2283

(D) "Comparable service" means any regulated service or goods	2284
whose availability, quality, price, terms, and conditions are the	2285
same as or better than those of the services or goods that the	2286
natural gas company provides to a person with which it is	2287
affiliated or which it controls, or, as to any consumer, that the	2288
natural gas company offers to that consumer as part of a bundled	2289
service that includes both regulated and exempt services or goods.	2290

(E) "Consumer" means any person or association of persons	2291
purchasing, delivering, storing, or transporting, or seeking to	2292
purchase, deliver, store, or transport, natural gas, including	2293
industrial consumers, commercial consumers, and residential	2294
consumers, but not including natural gas companies.	2295

(F) "Distribution service" means the delivery of natural gas	2296
to a consumer at the consumer's facilities, by and through the	2297
instrumentalities and facilities of a natural gas company,	2298
regardless of the party having title to the natural gas.	2299

(G) "Natural gas company" means a natural gas company, as	2300
defined in section 4905.03 of the Revised Code, that is a public	2301
utility as defined in section 4905.02 of the Revised Code and	2302
excludes a retail natural gas supplier.	2303

(H) "Person," except as provided in division (N) of this	2304
section, has the same meaning as in section 1.59 of the Revised	2305
Code, and includes this state and any political subdivision,	2306
agency, or other instrumentality of this state and includes the	2307
United States and any agency or other instrumentality of the	2308
United States.	2309

(I) "Billing or collection agent" means a fully independent	2310
agent, not affiliated with or otherwise controlled by a retail	2311
natural gas supplier or governmental aggregator subject to	2312
certification under section 4929.20 of the Revised Code, to the	2313
extent that the agent is under contract with such supplier or	2314
aggregator solely to provide billing and collection for	2315
competitive retail natural gas service on behalf of the supplier	2316
or aggregator.	2317

(J) "Competitive retail natural gas service" means any retail	2318
natural gas service that may be competitively offered to consumers	2319
in this state as a result of revised schedules approved under	2320
division (C) of section 4929.29 of the Revised Code, a rule or	2321
order adopted or issued by the public utilities commission under	2322
Chapter 4905. of the Revised Code, or an exemption granted by the	2323
commission under sections 4929.04 to 4929.08 of the Revised Code.	2324

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

2325

(1) A legislative authority of a municipal corporation, a	2326
board of township trustees, or a board of county commissioners	2327
acting exclusively under section 4929.26 or 4929.27 of the Revised	2328
Code as an aggregator for the provision of competitive retail	2329
natural gas service;	2330

(2) A municipal corporation acting exclusively under Section	2331
4 of Article XVIII, Ohio Constitution, as an aggregator for the	2332
provision of competitive retail natural gas service.	2333

(L)(1) "Mercantile customer" means a customer that consumes,	2334
other than for residential use, more than five hundred thousand	2335
cubic feet of natural gas per year at a single location within	2336
this state or consumes natural gas, other than for residential	2337
use, as part of an undertaking having more than three locations	2338
within or outside of this state. "Mercantile customer" excludes a	2339
customer for which a declaration under division (L)(2) of this	2340
section is in effect pursuant to that division.	2341

(2) A not-for-profit customer that consumes, other than for	2342
residential use, more than five hundred thousand cubic feet of	2343
natural gas per year at a single location within this state or	2344
consumes natural gas, other than for residential use, as part of	2345
an undertaking having more than three locations within or outside	2346
this state may file a declaration under division (L)(2) of this	2347
section with the public utilities commission. The declaration	2348
shall take effect upon the date of filing, and by virtue of the	2349
declaration, the customer is not a mercantile customer for the	2350
purposes of this section and sections 4929.20 to 4929.29 of the	2351
Revised Code or the purposes of a governmental natural gas	2352
aggregation or arrangement or other contract entered into after	2353
the declaration's effective date for the supply or arranging of	2354
the supply of natural gas to the customer to a location within	2355
this state. The customer may file a rescission of the declaration	2356
with the commission at any time. The rescission shall not affect	2357
any governmental natural gas aggregation or arrangement or other	2358
contract entered into by the customer prior to the date of the	2359
filing of the rescission and shall have effect only with respect	2360
to any subsequent such aggregation or arrangement or other	2361
contract. The commission shall prescribe rules under section	2362
4929.10 of the Revised Code specifying the form of the declaration	2363
or a rescission and procedures by which a declaration or	2364
rescission may be filed.	2365

(M) "Retail natural gas service" means commodity sales	2366
service, ancillary service, natural gas aggregation service,	2367
natural gas marketing service, or natural gas brokerage service.	2368

(N) "Retail natural gas supplier" means any person, as	2369
defined in section 1.59 of the Revised Code, that is engaged on a	2370
for-profit or not-for-profit basis in the business of supplying or	2371
arranging for the supply of a competitive retail natural gas	2372
service to consumers in this state that are not mercantile	2373
customers. "Retail natural gas supplier" includes a marketer,	2374
broker, or aggregator, but excludes a natural gas company, a	2375
governmental aggregator as defined in division (K)(1) or (2) of	2376
this section, an entity described in division (B) or (C) of	2377
section 4905.02 of the Revised Code, or a billing or collection	2378
agent, and excludes a producer or gatherer of gas to the extent	2379
such producer or gatherer is not a natural gas company under	2380
section 4905.03 of the Revised Code.	2381

(O) "Revenue decoupling mechanism" means a rate design or	2382
other cost recovery mechanism that provides recovery of the fixed	2383
costs of service and a fair and reasonable rate of return,	2384
irrespective of system throughput or volumetric sales.	2385

Sec. 4929.02.  (A) It is the policy of this state to,	2386
throughout this state:	2387

(1) Promote the availability to consumers of adequate,	2388
reliable, and reasonably priced natural gas services and goods;	2389

(2) Promote the availability of unbundled and comparable	2390
natural gas services and goods that provide wholesale and retail	2391
consumers with the supplier, price, terms, conditions, and quality	2392
options they elect to meet their respective needs;	2393

(3) Promote diversity of natural gas supplies and suppliers,	2394
by giving consumers effective choices over the selection of those	2395
supplies and suppliers;	2396

(4) Encourage innovation and market access for cost-effective	2397
supply- and demand-side natural gas services and goods;	2398

(5) Encourage cost-effective and efficient access to	2399
information regarding the operation of the distribution systems of	2400
natural gas companies in order to promote effective customer	2401
choice of natural gas services and goods;	2402

(6) Recognize the continuing emergence of competitive natural	2403
gas markets through the development and implementation of flexible	2404
regulatory treatment;	2405

(7) Promote an expeditious transition to the provision of	2406
natural gas services and goods in a manner that achieves effective	2407
competition and transactions between willing buyers and willing	2408
sellers to reduce or eliminate the need for regulation of natural	2409
gas services and goods under Chapters 4905. and 4909. of the	2410
Revised Code;	2411

(8) Promote effective competition in the provision of natural	2412
gas services and goods by avoiding subsidies flowing to or from	2413
regulated natural gas services and goods;	2414

(9) Ensure that the risks and rewards of a natural gas	2415
company's offering of nonjurisdictional and exempt services and	2416
goods do not affect the rates, prices, terms, or conditions of	2417
nonexempt, regulated services and goods of a natural gas company	2418
and do not affect the financial capability of a natural gas	2419
company to comply with the policy of this state specified in this	2420
section;	2421

(10) Facilitate the state's competitiveness in the global	2422
economy;	2423

(11) Facilitate additional choices for the supply of natural	2424
gas for residential consumers, including aggregation;	2425

(12) Promote an alignment of natural gas company interests	2426
with consumer interest in energy efficiency and energy	2427
conservation.	2428

(B) The public utilities commission and the office of the	2429
consumers' counsel shall follow the policy specified in this	2430
section in carrying outexercising their respective authorities	2431
relative to sections 4929.03 to 4929.30 of the Revised Code.	2432

(C) Nothing in Chapter 4929. of the Revised Code shall be	2433
construed to alter the public utilities commission's construction	2434
or application of division (A)(6) of section 4905.03 of the	2435
Revised Code.	2436

Sec. 4929.051. An alternative rate plan filed by a natural	2437
gas company under section 4929.05 of the Revised Code and	2438
proposing a revenue decoupling mechanism may be an application not	2439
for an increase in rates if the rates, joint rates, tolls,	2440
classifications, charges, or rentals are based upon the billing	2441
determinants and revenue requirement authorized by the public	2442
utilities commission in the company's most recent rate case	2443
proceeding and the plan also establishes, continues, or expands an	2444
energy efficiency or energy conservation program.	2445

Section 2. That existing sections 4905.31, 4928.01, 4928.02,	2446
4928.05, 4928.09, 4928.14, 4928.17, 4928.20, 4928.31, 4928.34,	2447
4928.35, 4928.61, 4928.67, 4929.01, and 4929.02 and sections	2448
4928.41, 4928.42, 4928.431, and 4928.44 of the Revised Code are	2449
hereby repealed.	2450

Section 3. Nothing in this act affects the legal validity or	2451
the force and effect of an electric distribution utility's rate	2452
plan, as defined in section 4928.01 of the Revised Code as amended	2453
by this act, or the plan's terms and conditions, including any	2454
provisions regarding cost recovery.	2455

Section 4. Section 4929.051 of the Revised Code, as enacted	2456
by this act, shall not be applied in favor of a claim or finding	2457
that an application described in that section but submitted to the	2458
Public Utilities Commission prior to the act's effective date is	2459
an application to increase rates.	2460

Section 5. The Governor's Energy Advisor periodically shall	2461
submit a written report to the General Assembly pursuant to	2462
section 101.68 of the Revised Code and report in person to and as	2463
requested by the standing committees of the House of	2464
Representatives and the Senate that have primary responsibility	2465
for energy efficiency and conservation issues regarding	2466
initiatives undertaken by the Advisor and state government	2467
pursuant to numbered paragraphs 3 and 4 of Executive Order	2468
2007-02S, "Coordinating Ohio Energy Policy and State Energy	2469
Utilization. The first written report shall be submitted not later	2470
than sixty days after the effective date of this act.	2471