State Utility Regulators Rule for Tenants (Mostly)

The Public Utilities Commission of Ohio recently ruled that submetering companies can no longer charge tenants exorbitant prices for gas, electricity and water services.

For many years the state has regulated how much utility companies can charge for providing gas and electric services. But until now there was no restriction on how much so-called submetering companies could charge people for the same services, which often led to astronomical utility bills for tenants.

In recent years, more and more landlords started contracting with submetering companies to provide to utility services their tenants. These companies purchase gas, electricity and water in bulk from regular utility companies, and then resell it to tenants at much higher prices. They also may install individual meters for multifamily buildings that only have 1 meter for the entire building. They also typically manage billing and collections for tenants’ utility services.

The Housing Information Line has received many complaints about submetering practices, prompting COHHIO to join a coalition of consumer advocates urging the PUCO to apply appropriate regulations to this industry. After years of deliberation, the PUCO finally ruled that submetering companies may not charge higher rates for utilities than the amount a household would pay a local utility company.

“The PUCO’s unanimous decision is a positive development for Ohio’s 1.5 million renter households, many of whom have been getting gouged by submetering companies for years,” said Joe Maskovyak, COHHIO’s fair and affordable housing coordinator. “However, the burden is still on individual tenants to complain about price gouging before the PUCO will take any action.”

While regulated utilities (AEP, First Energy, Columbia Gas, etc.)must get the PUCO to approve their rates, submetering companies can essentially continue charging whatever they want, despite the new ruling. However, if a customer complains, then the PUCO will initiate an investigation to determine whether or not the charge is permissible.

“It’s always essential for tenants to know what their rights are and to advocate for fair treatment. With submetering, it’s no different,” Maskovyak said. “So pay close attention to your utility bills, especially if you’re being billed by a submeter company rather than a traditional utility.”

Some of the Central Ohio submetering companies whose anti-consumer practices brought this issue to the attention of the Columbus Dispatch, and then to the PUCO and the legislature, include American Power & Light and Nationwide Energy Partners. In fact, their practices have been harshly criticized by the Utility Management and Conservation Association (UMCA), a national trade association representing the traditional submetering industry. UMCA has previously called them rogue operators and have sought to distance themselves from these companies.

If you think you’re being overcharged for utility service, contact the PUCO call center at 1-800-686-7826 to initiate a complaint. Before you call, make sure you have the following information:

  • Your address
  • Recent bills from the submetering company
  • Your monthly utility usage (if this is not printed on your monthly billing statement, you may need to contact the submetering company to get this information).

And, as always, feel free to call COHHIO’s Housing Information Line for advice about how to exercise your rights as a tenant: 1-888-485-7999.

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2017-08-24T16:50:58+00:00