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Office of the Ohio Consumers’ Counsel

The Columbus City Council
Public Utilities Committee
Testimony on Consumer Protection from Submetering of Utility Services

Presented by Andrew Garver
Office of the Ohio Consumers’ Counsel
March 16, 2017

 Good afternoon Chairman Stinziano and members of the Public Utilities Committee. I am Andrew Garver with the Office of the Ohio Consumers’ Counsel. The Ohio Consumers’ Counsel is the state- designated representative for Ohioans regarding their residential electric, natural gas, telephone, and water services.

Thank you for this opportunity to testify on the impact of submetering on residential utility consumers – particularly in the city of Columbus. The Consumers’ Counsel is appreciative of your time and consideration of this consumer issue.

Submetering refers to a practice where utility services, such as electricity and water, are resold to consumers by middlemen, sometimes at higher or much higher prices than the local utility’s price. Submetering largely affects consumers in apartments, condominiums, and manufactured housing developments. Submetering companies can buy utility service from the public utility and then resell it to the consumer at a higher price. In addition to potentially charging Ohioans higher prices than the local utility’s rate, submetering companies have asserted that they are not subject to other consumer protections that Ohio law and the PUCO apply to consumers, such as protection against unreasonable disconnection of service. Consumers of submeterers lack both the protection of government regulation and the protection of competitive markets, meaning they lack the protections available for Ohioans served by public utilities.

This consumer problem was highlighted in a series of investigative news stories by the Columbus Dispatch, in October 2013. These news stories are Attachment 1 to this document. It was reported that reselling had inflated some customers’ utility bills by as much as 40 percent.

There are four cases pending at the PUCO that involve submetering issues. Those cases include a complaint filed by the Consumers’ Counsel on behalf of submetered residential customers (Case No. 16-0872-EL-CSS), two complaints by individual customers (Case Nos. 15-697-EL-CSS and 16- 2401-EL-CSS), and a PUCO-ordered investigation (Case No. 15-1594-AU-COI).

In the PUCO investigation case, both consumer representatives and utilities have recommended protecting Ohioans from submetering. In December 2016, the PUCO determined that certain submetering companies can be regulated by the PUCO under some circumstances. This decision is a step toward limiting charges to tenants, condominium residents and other customers of middlemen who resell utility service. A further decision of the PUCO is expected. It is not clear yet if the PUCO’s approach will solve the submetering problem for consumers.

There have been a number of Ohio House and Senate bills on the subject of submetering, master- metering, and the reselling of public utility service. Representative Mike Duffey has been a leader in efforts to enact legislation for consumer protection from submetering. A consumer protection law has yet to pass for customers of submeterers.

The Consumers’ Counsel recommends state legislation on submetering. Legislation should give Ohioans protection from unreasonable prices. And legislation should guarantee for submetered consumers the same protections for quality of service that consumers of utilities have for these services, such as standards for disconnection of service.

There have been a few ordinances adopted by Ohio municipalities. The consumer protections we have proposed are appropriate whether for state legislation, PUCO rule, or municipal ordinances. In July 2015, the Consumers’ Counsel Governing Board adopted a resolution to protect submetered customers. The Governing Board recommends that the Ohio General Assembly and the PUCO institute price protections and other protections for Ohioans who are charged for public utility services through a master meter and/or submeter by their property owner, condominium association, or other third party connected with their housing. A copy of the Board’s Resolution is Attachment 2 to this document. Here is a link to our webpage with information about submetering: Our Twitter handle is @OhioUtilityUser.

Thank you again for considering consumer protection for Ohioans affected by this issue. This concludes my remarks today.