ProgressOhio

It’s the economy stupid!

It’s my wallet guys!

We need jobs, Jon!

Phones had to be buzzing last Thursday – not yours or mine – but those of Ohio’s all-powerful corporate leaders.

Ohio lost out on new jobs from a steel company Thursday. A $1 billion dollar investment that went elsewhere because of Ohio’s unpredictable cost of electricity prices. And you should be mad.

Not at the Governor. At the do-nothing Ohio House which has sat on electricity re-regulation for months. The company cited electricity instability as the major reason for their decision to pass on the Buckeye State.

Deep rumblings are echoing at the Statehouse these days. Never spoken, but you can see it in the eyes of lobbyists. The manufacturing titans – key to Ohio’s economy – and long entrenched in the GOP psyche – have got to be making boardroom calls about Jon Husted’s lack of leadership on an electricity hike that could further cripple Ohio’s economic engine. With a four seat majority – whispers in boardrooms like that, in and of itself, would cast a nervous shadowy fog across the Ohio Statehouse’s south wing (House chambers.)

Six months ago, Ohio Governor Ted Strickland, fearful of the effects of unregulated electricity in states like New Jersey and Illinois, where prices soared, introduced legislation to re-regulate electricity. (Ohio has been in phased de-regulation for the past nine years)

In quick order, the Governor, true to his MO from his first year in office, compromised with Senate Republicans and came up with a bill known as S.B. 221 that called for regulation unless the free market would bring better rates.

After winning unanimous support from the Senate, the bill went to the Ohio House, and we waited, and waited, and waited. For the first time in my 20 years around the Statehouse, a House committee didn’t take testimony from interested parties – it heard from hand-picked panels whose members testified by invitation only. The parking garage beneath the Statehouse was filled with the hourly luxury chariots of lobbyists who seem to abound whenever utility issues are debated. (Funny how that works considering we’re all beholden to pay for things like – ohh – heat.)

And we waited.

Heck, since this started John McCain has rolled through two political lives (could be three after this week’s New York Times brouhaha) and Mitt Romney has spent enough of his own money in a failed campaign against taxes – to – well -- fund 16% of Ohio’s projected budget deficit. Six months is a lifetime in politics – unless you’re sleeping through your last term in the Ohio House.

In the midst of a national fervor for change coming from both political parties, and while the nation’s well-coifed national news reporters focus squarely on the frozen landscape that is Ohio’s families economic woes and fears (bracing themselves for $4.00 a gallon gas) last week our Ohio House met.

And I bet you didn’t know it. Why would you? House members hardly did anything for your wallet – or for that potential billion dollar steel company that had an interest in your state.

What we got, on Thursday, was a bill delivering the Governor’s renewable energy proposals – creating an outside agency to administer a new type of TIF – already rejected by the Ohio Senate. It’s friendly and it polls well – but it isn’t S.B. 221 or some variation – it’s gutless.

Ohio needs rate stability – Ohio needs jobs. Why else would the head of manufacturers in Ohio stand with the head of the Ohio AFL-CIO in a press conference to push S.B. 221? They know without something meaningful and comprehensive – we’re on another collision course with economic ignominy.

What this means, is that if you are a lobbyist these days – these are your salad days. And a good lobbyist knows that it’s easier to gum up a bill than get enough votes to pass one.

Since January, Speaker Husted, who is comfortably on his way to the gerrymandered and secure state Senate seat held by term-limited Jeff Jacobson, has made little secret in the shadows of Columbus’ watering holes about his desire to be Secretary of State.

But as the dynamic duo of Husted and Ohio Republican Party Prince Regent Kevin DeWine plot their way back to power – the combination of political Machiavellism and personal ambition may wind up burying both Ohio’s economy and the long alliance between struggling but still powerful (and personally wealthy) manufacturers.

The major issues of this General Assembly seem to be going nowhere as everywhere you go in the Statehouse the focus is on who will succeed Husted, and whether the GOP will maintain a four-seat majority given coat-tails from the 2006 GOP election debacle.

It is quite simply easier for good lobbyists to gum up bills than face the uncertain faces and ever eager hands of legislative ambition. A strong leader would appeal to both parties to keep some sort of order, focus and legislative progress given Ohio’s acute economic needs. Instead:

• PayDay loan proposals supported bi-partisanly languish.
• The Governor’s jobs bill last month is dead on arrival in the House and will likely go to the ballot.
• The Secretary of State’s efforts at election reforms are largely part of a partisan game.
• And electric re-regulation is at a stall leaving consumers, manufacturers and businesses at risk.

Speaker Husted did get compliments Thursday – after all, the renewables were the only part of the Governor’s plan rejected in the Ohio Senate.

But by moving a bill focused largely on renewables, Husted is ignoring the meat of the plan which both the Governor and Ohio Senators overwhelmingly recognized as necessary in a 32-0 vote.

What is more troubling is that Husted on the re-regulation issue has a long history of saying one thing, but doing another.

On Jan. 10th, Husted issued his “goals’’ for the bill. Top on the list: craft a plan that doesn’t result in “winners and losers.’’ A good goal for all stakeholders in the effort.

Just a few weeks later, however, one of the Speaker’s top lieutenants on the House Public Utilities Committee quietly shopped around an amendment that would – you guessed it – result in a system populated with winners and losers.

The winners: Large industrial customers who would have been allowed to share a $20 million pool of discounts.

The losers: Homeowners and other residential customers who would not.

The Cincinnati Enquirer http://news.cincinnati.com/apps/pbcs.dll/article?AID=2008802120329 exposed the proposal, and the Ohio Consumers’ Counsel explained why it was a bad idea:

"It is not a good thing for consumers," said Janine Migden-Ostrander, who represents the interests of residential utility customers.

Duke officials, however, say the discounts will help business development

"The goal is economic development," Duke spokesman Steve Brash told the newspaper.

If it’s so great for economic development, why did the very businesses that would have benefitted, turn down the deal? It’s not like the manufacturers and their armies of lobbyists aren’t pretty self-focused on their needs from this issue?

Yet what these industrial companies realized is that they want and need a permanent fix if they are to make long-term decisions on whether to expand or invest in Ohio. Ohio’s industrial titans need to know for certain what kind of electric bills to expect, just as its struggling residential consumers do.

There is growing evidence that they can expect sharp and sudden price hikes, not to mention a “market’’ that is easy to manipulate. The manipulation became so bad in Illinois that the attorney general became engaged and forced companies to pay a settlement in excess of $1 billion.

Ohio has a rare opportunity to learn from the mistakes of other states, where the gap in retail electricity prices between deregulated and regulated states continues to widen, more than doubling from 2.1 cents per kilowatt in 1999 to 4.4 cents in 2007, according to a Feb. 12 report from Power in the Public Interest.

"For the 12 months ending October 2007, consumers in the deregulated group paid $139 billion for their electricity. The same amount of electricity at the regulated states' average rate would have cost $89 billion — a difference (or comparative purchasing-power disadvantage to the deregulated states) of $50 billion for the 12-month period," the report's author, former state utilities regulator Marilyn Showalter, found in "Electricity Price Trends: Deregulated vs. Regulated States."

"This is not to say that deregulation is responsible for the whole gap, or that the gap can be closed," Showalter said. "The gap does, however, reveal the significant economic disadvantage suffered by customers in the deregulated states, and the imperative for them (as well as states about to face deregulated prices) to pursue the most effective form of economic regulation of electricity."

So, on Thursday, Jon Husted walked into his once powerful office in a vacuous state.

He could smile knowing that no-one, including ProgressOhio and its partners, would criticize a bill designed to promote renewable energy – a Machiavellian move to be sure. But he could also smile knowing that its fate is likely sealed across the Statehouse in the Senate where he will soon reside.

What he did not expect was that on the same date Steel Development, LLC announced that it’s not coming to Ohio because of uncertainty over electricity costs.

The company’s managing director told reporters the group “wasn’t able to get a handle on its electricity costs in Ohio because the state has yet to decide how rates will be regulated in the future.”

For Ohio manufacturer’s that’s a brown out – a power drain – right at the feet of the once-powerful Speaker. You can read in the tea leaves that phones were burning to those business titans in Dayton and southwest Ohio who weaned a young Husted into his lofty perch under the carved Ohio seal in Ohio’s gilded House chamber. Titanism is a pretty small exclusive club and it doesn’t take a genius to figure these calls would likely increase in number and intensity on Thursday.

After six months, Husted seemed more interested in a strategy of political poker than Ohio jobs. But you could be sure if you were a fly in the walls of corporate Ohio that it is likely that these bottom-line moguls are reminding Speaker Husted’s hometown hero’s that Jon Husted is gambling on their tab – and after six months the economic hangover is wearing thin.

You can be fairly certain the message to Jon Husted would likely be that he needs to lead, follow or get out of our way – corporate leaders aren’t known to play footsy with things like profit margins and company stability – and you don’t need a phone tap to hear these rather loud echoes.

A shadow like that leaves one final question; will Mr. Husted’s power outage drag his party with him in the House? You would think he and Prince Kevin would start to hear the wake-up calls.

Exclusive from ProgressOhio:

Hear Ohio Governor Ted Strickland speak directly to you about Electric Re-regulation.