Ohio Gov. Mike DeWine signed House Bill 15 into law, eliminating the use of “electric security plans” (ESPs) for the state’s utilities and requiring them to rely on market forces to maintain adequate generation.

“EPSA applauds Ohio policymakers for enacting Substitute HB 15 — legislation that sends a clear message: Ohio is open for business,” Electric Power Supply Association CEO Todd Snitchler said in a statement May 15. “By shifting financial risk away from captive ratepayers and enhancing transparency, this bill further enhances a competitive energy market that benefits consumers and attracts investment.”

Competitive markets lower costs and emissions without sacrificing reliability, Snitchler argued. The law provides a strong model for other states to attract the needed investment to meet higher demand from artificial intelligence, data centers and advanced manufacturing.

“This shouldn’t be viewed as just an Ohio win; it’s a roadmap for energy policy across the country,” Snitchler said. “Ohio chose competition, accountability and innovation, without subsidies to specific types of resources.”

The law passed out of the Legislature on April 30 with unanimous approval by the state Senate and by a 94-2 vote in the House of Representatives.

Ohio law previously gave utilities two options to establish their standard service offer (SSO) rates: an ESP that covered several years, or a market rate offer (MRO). ESPs have been used widely since a 2008 law allowed them. In addition to EPSA, the Office of the Ohio Consumers’ Counsel supported their elimination.

“The legislation restores the General Assembly’s vision in 1999 to deregulate power plants to bring the benefits of electric competition to Ohio utility consumers,” Consumers’ Counsel Maureen Willis testified earlier this year as the law moved through committee. “That vision was impaired by the 2008 energy law, when so-called electric security plans were created with their increased involvement of government regulators.”

The ESP will be eliminated fully once currently effective plans expire. The law requires utilities to switch to the MRO to establish SSO rates for customers who do not shop for competitive suppliers.

About 40% of the state’s customers still get default service from the utilities under the SSO, but they represent less than 20% of the state’s load, according to statistics from the Public Utilities Commission of Ohio. The new law requires PUCO to ensure that any MRO does not have an adverse effect on large-scale governmental aggregation, which allows municipalities and counties to combine their residents’ power demand and purchase supply at bulk for them.

The law also bans utilities from creating competitive retailers of their own, which is something of a fait accompli, as regulated utilities in Ohio and beyond have spun off their competitive operations over the past decade. It also changes the definition of an electric delivery utility to specifically say they cannot own generation.

Another part of the law repeals utilities’ ability to recover costs associated with the Ohio Valley Electric Corp., which was set up as a joint venture in the early 1950s to own coal plants to supply a uranium enrichment facility that long since has shut down. That part of the legislation was championed by Rep. Sean Patrick Brennan (D), who said in a statement after it passed that it had been one of his goals since joining the House in 2023.

“The inclusion of my proposal that will save Ohioans hundreds of millions of dollars is an overwhelming accomplishment that many said would never get done,” Brennan said. “Protecting Ohio’s electric customers should be a goal of all public servants. To that end, I am happy about the bipartisan support for my proposal and the bill.”