Ohio Commission provides pricing protections to submetered customers

The Public Utilities Commission of Ohio (PUCO) ruled Wednesday that it would prevent submetering companies from charging submetered residential customers a higher price than what the PUCO-regulated local public utility charges a customer with equivalent usage through default service rates.

“It is our hope that today’s Commission decision will serve to protect customers by disciplining pricing in the submetering marketplace and providing a true venue for submetered residential customers to file their grievances,” PUCO Chairman Asim Z. Haque said.

Submetering involves installing secondary metering devices that allow a landlord, submetering company or other organization to purchase utility services and resell them to tenants on an individual basis.

The Commission established a pricing test to help determine whether a submetered residential customer is being overcharged. To assist these customers in performing the prices test, PUCO directed local public utility companies to work with PUCO staff to create an online bill calculator tool.

Under the ruling, a submetering company must demonstrate that any amounts charged above what the local public utility company would charge is within a safe harbor set in the Commission’s decision.

In December 2015, PUCO opened an investigation into submetering practices and solicited comment from interested parties.

In December 2016, the Commission modified the Shroyer Test, which is used to determine if an entity is operating as a public utility. The change created a relative price test that, if failed, indicates that a submetering company is selling utility services at a profit and is, therefore, under PUCO jurisdiction. PUCO also requested comments on the percentage threshold for the relative pricing test.