Senate Energy Committee advances substitute Senate Bill 2 after debate on contracts, OVEC recovery and utility generation

The Senate Energy Committee voted to favorably report substitute Senate Bill 2 to the Committee on Rules and Reference on a unanimous roll call after a hearing that included testimony from utilities, manufacturers, environmental advocates and energy-policy groups.

The bill, as amended to version 5 during the hearing, changes rate-making procedures, establishes annual true-ups of forecasted costs, limits utility ownership of new behind-the-meter generation to projects already in operation before the bill’s effective date, and ends cost recovery for OVEC (Ohio Valley Electric Corporation) subsidies immediately in the bill’s current form.

Why it matters: The legislation would reshape how Ohio utilities recover costs and bid service offers, affect how data-center and other large commercial customers obtain power, and change the treatment of certain legacy generation costs that have been passed to retail customers for years.

Frank Stregari, vice president of external affairs for AEP Ohio, testified in opposition to the current substitute and told the committee that the bill’s restrictions on agreements under Ohio Revised Code 4928.47 risk unlawfully impairing existing contracts. “This current…