RESOLUTION REGARDING THE ESCALATION OF ELECTRICITY COSTS
Adopted March 20, 2007
WHEREAS, the State of Ohio is one of the top three steel-producing states with nearly 100,000 direct and indirect jobs tied to the steel industry; and WHEREAS, the Ohio steel industry annually provides for over $1.3 billion in direct wages, $2.2 billion of purchased Ohio goods and services and has a $7.2 billion total impact on Ohio’s economy; and WHEREAS, the Ohio steel industry is heavily energy dependent and is the largest industrial sector user of energy in the State of Ohio, using nearly $1.6 billion of energy per year, of which $250 million is purchased electricity; and WHEREAS, with enactment of Senate Bill 3 in 1999, there was a widely held belief that effective competition in wholesale and retail electric markets would develop after a reasonable Transition Period to provide customers in Ohio with lower prices and better service; and WHEREAS, after more than five years since the enactment of SB 3, effective competition in wholesale and retail markets failed to develop and instead became dysfunctional, requiring an extension of the original Transition Period by establishing Rate Stabilization Plans ("RSPs") in 2004 for the purpose of stabilizing generation prices; and WHEREAS, Ohio's current RSPs impose caps on generation rates through December 31, 2008 and all Ohio energy consumers will be adversely affected if power markets continue to be dysfunctional at the end of 2008 when the RSPs expire; and WHEREAS, industries in states that have adopted electricity deregulation are facing a huge competitive disadvantage and are at risk of failing; and WHEREAS, the Federal Energy Regulatory Commission (FERC) has taken no action to reform dysfunctional market pricing (“last-bid-in” marginal pricing) and there is no sign it intends to take any such action soon; NOW, THEREFORE, BE IT RESOLVED that the Ohio Steel Industry Advisory Council after investigation and deliberation, hereby urgently requests that Ohio, through the coordinated efforts of its Governor, General Assembly, Department of Development, Office of Consumer Counsel and Public Utilities Commission: a) Strongly advocate before Congress and the FERC to bring about revisions in the current failed “last-bid-in” marginal pricing for electricity wholesale markets, which would enable true competitive market driven electricity pricing; and b) Take the necessary action to allow extensions or successors to the current RSPs until such time that power markets cease to be dysfunctional; or c) Re-structure the electricity industry in a fashion similar to the recently adopted plan in the Commonwealth of Virginia to bring long term stability to the price of electricity; and d) Develop a favorable regulatory climate in Ohio for co-generation, self-generation, distributed generation and cost effective renewable energy technologies.
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