The Ohio Supreme Court dealt a blow to submetering companies by ruling that the middlemen should be regulated like utilities.
The Supreme Court unanimously ruled that the Public Utilities Commission of Ohio has the authority to regulate third-party companies that provide electricity to tenants across the state.
“No company gets to sell essential electric service in Ohio without playing by the rules. The Court’s ruling enforces that,” Ohio Consumers’ Counsel Maureen Willis said.
Ohio law allows owners of apartment complexes, condominiums and mobile home parks to bill tenants for electricity, water and other utilities − a concept called submetering. Some owners contract with third-party companies, such as Nationwide Energy Partners, to set prices, bill customers and disconnect tenants.
Consumer advocates and utilities alike oppose this practice, contending that it increases customers’ bills while stripping them of consumer protections. But the Public Utilities Commission of Ohio ruled that NEP and similar submetering companies weren’t subject to its regulations.
American Electric Power Ohio sued over the PUCO’s 2023 decision to give control of five Columbus-area apartment complexes to NEP. At the time, NEP was purchasing about $8.5 million in electricity from AEP Ohio each year and serving about 1.75% of AEP Ohio’s residential customers.
On April 22, the Ohio Supreme Court sided with the utility over the middlemen. Justice Pat DeWine wrote in the court’s opinion that NEP purchases electricity, resells it to tenants, installs distribution and metering equipment, sets the price and can disconnect tenants who don’t pay.
“In short, NEP is in the business of supplying electricity to consumers,” he wrote.
The court ruled that it didn’t matter that submetering companies contract with landlords, rather than tenants. In the end, the utility middlemen were acting like electric suppliers and should be regulated accordingly.
“From the tenants’ perspective, NEP is for all practical purposes the supplier of their electricity,” DeWine wrote.
AEP Ohio applauded the decision, writing that “the Supreme Court of Ohio’s ruling today will protect Ohioans who live in submetered apartment buildings.”
“This ruling should help restore these important rights for tenants and will likely reduce electric bills for customers who live in submetered apartment buildings,” according to AEP Ohio.
State government reporter Jessie Balmert can be reached at jbalmert@usatodayco.com or @jbalmert on X.
This article originally appeared on Cincinnati Enquirer: Ohio ruling expands utility protections for tenants using submetering
Reporting by Jessie Balmert, Columbus Dispatch / Cincinnati Enquirer
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