Submeter firms could face regulation by city

By Dan Gearino  The Columbus Dispatch

Years of inaction by the state may push the Columbus city government to set limits on companies that resell utilities in apartments and condominiums.

That was the conclusion of Mike Stinziano, a council member, following the public hearing he convened Thursday to gather comments on the topic.

"Having it all on the record is important to then further the discussion," Stinziano said about the hearing, which lasted about an hour and a half. "It has been a real education about why this is important."

Some unregulated "submeter" companies resell electricity and water in apartments and condominiums, adding in markups that can make the costs much higher than a regulated utility would charge. The Dispatch has been writing about the issue since 2013.

Since then, there have been proposals in the Ohio General Assembly and an investigation by the Public Utilities Commission of Ohio. The PUCO ruled last year that is has the authority to regulate submeter companies; the panel is now reviewing appeals to that ruling.

"Unfortunately, today in Ohio, submeter residents are not protected," said Joseph Hussey, whose Far North Side condominium is served by a submeter company, American Power and Light. He said his bills are 25 percent more than they would be under the regulated utility, American Electric Power.

He was one of several people who mentioned that the two companies have similar names, which he thinks is an attempt to confuse customers.

About 20 people attended the hearing, held in the City Council chambers.

Several speakers urged the city to distinguish between the different types of submeter companies. Some companies are essentially billing services, with no markup other than a small monthly fee. This includes Guardian Water & Power of Grandview Heights, which sent an employee to testify.

Others, such as American Power and Light and Nationwide Energy Partners, earn a profit by marking up the cost of electricity and water. Neither company sent a representative to testify.

Asked for a comment, Nationwide Energy CEO Gary Morsches criticized the hearing.

"NEP has advocated for consumer protections for several years and will continue to do so," he said in an e-mail.

"Unfortunately, the city hearing today was orchestrated by individuals who distorted the real facts about and the benefits of submetering. By distorting the facts and confusing submetering with reselling, these opponents are helping big utilities control the market and are infringing upon property owners' rights to offer beneficial submetering services and bring energy innovation to the local market."

Michael Gonidakis, a lobbyist for Westerville-based American Power and Light, had no comment.

The last speaker was Mark Whitt, a Downtown resident and attorney who is challenging submeter companies in several venues, including a proposed class-action lawsuit against Columbus-based Nationwide Energy.

Whitt said the property developers and landlords are receiving benefits from their relationships with submeter companies and will need to answer for that at some point.

"Developers are complicit," he said.

Stinziano said afterward that he thinks there is a 50-50 chance that the city will step in to write legislation that protects customers of submeter companies if the state does not.

This would be significant because the companies that have generated the most complaints are based in central Ohio and have a large share of their customers in the region.

dgearino@dispatch.com

@dangearino