Bacon Introduces Consumer Protections Targeting Utility Resale Providers

Staff Report

COLUMBUS – State Senator Kevin Bacon (R-Minerva Park) reintroduced legislation aimed at improving oversight and accountability of companies that resell utility services to consumers.

The practice, known as submetering, involves companies that purchase services such as water and electricity in bulk from regulated utility providers for resale to residents of multi-tenant properties, such as apartments, condominiums or homeowners associations.

“This practice has become very profitable to some companies in recent years, often at the expense of low-income consumers,” said Senator Bacon. “Some utility providers are able to get away with deceptive billing practices and unjustified price hikes largely because the law doesn’t prohibit it. It’s time to fix that. Ohio regulates its utilities to ensure that basic necessities remain accessible and affordable, and we need to extend those protections to the submetering industry as well.”

A 2013 investigation found that some submetering companies marked up utility services by as much as 40 percent over what residents would have paid to a regulated utility provider. Senate Bill 157 establishes new safeguards and transparency requirements aimed at preventing consumer abuse.

The bill includes provisions that:

  • Prevent consumers from being charged more than market-based rates and actual costs, as well as permit consumers to sue for over-charge damages,
  • Prohibit property owners from charging more than one administrative fee each month for all utility services and mandate that the fee be disclosed to consumers upfront at the time of the agreement,
  • Require submetering property owners to provide a clear description of how consumers will be billed for utility services and provide a written estimate of typical monthly utility costs
  • Empower customers to require submeter accuracy testing and specify that all submeters meet the accuracy and quality standards established by the Public Utilities Commission of Ohio (PUCO),
  • Mandate submeter companies to include contact information on utility bills in case of a dispute,
  • Protect customers from liability for any costs related to the routine operation, repair and maintenance of service lines,
  • Empower the Ohio Attorney General to enforce the statute.

Senator Bacon introduced similar legislation during the last General Assembly. The bill will be referred to a Senate Standing Committee for further consideration.

Staff Report