Back in 1998, Ohio's Governor and others were touting the tremendous benefits of electric de-regulation in Ohio. Everything from a 60 percent reduction in electric utility rates to huge economic development opportunities. Such a level of exuberance existed that legislators could hardly wait to put their stamp of approval on the deregulation bill when it reached their desk a couple of years later.

    But builders knew better and we did our best to convince law makers that some things needed to be left alone. When the electric utilities spun off their power generation capabilities, they also cast aside their ability to equably recover the cost for new distribution lines into new subdivisions.

    Before deregulation, the utility could determine their capital construction cost because they knew, based on factors including its profit margin, that it would recover those costs. Because of this, the developer received a "credit" for the construction cost

    Deregulation created a bunch of little profit centers instead of a lot of competition. Since the utility no longer made money from the generation of power, someone else did, it charged the developer 100% of the construction costs associated with the development. This eventually trickled down to you know who, driving up the cost of building a new home and the cost of electric energy.

    Action is currently being taken to once again regulate electric utilities. During 2007, the Electric Restructuring bill was heavily lobbied by our affiliate, the Ohio Home Builders Association (OHBA). If passed, the bill will return line extension cost to the overall rate base and the PUCO will once again rule on rate increases. Doing so will spread the cost over all consumers, eliminating costly upfront fees for builders.