Plan would offer tax cuts for creating jobs

Associated Press

COLUMBUS

Ohio utility regulators are considering a plan that would offer businesses a break on their utility bills if they create jobs, an idea that has generated skepticism among both utilities and consumers.

An “economic development tariff” was pitched by the staff of the Public Utilities Commission of Ohio in July as a way to attract growing businesses to the struggling state.

The plan calls for offering discounts on electricity to businesses that create or increase payroll by $5 million or more and add at least 75 permanent new employees in Ohio. Eligible businesses also would have to make a job-retention commitment through the duration of the discount and agree to make at least $50 million in bricks-and-mortar investments.

Commissioners heard arguments on the proposal Wednesday. They are expected to decide later.

Both utilities and consumers have concerns with the plan, especially a provision that would allow 80 percent of the cost to be passed on to customers and the remaining 20 percent to be absorbed by utilities.

“I think it is inexcusable for PUCO to even consider discounts for hiring and investment for Ohio companies,” William Kirk of North Ridgeville wrote in an email to the commission. “The worst part is a charge on other electric customers. What are you thinking? This is wrong from every direction. ... You are killing the consumer. There will be no consumers left in Ohio because they will not be able to afford their utility bills.”

The Ohio Hospital Association has asked the commission to hold off on acting on the plan until it can be investigated further. The Ohio Manufacturing Association’s Energy Group also urges a delay, citing “the inherent complexity of developing a reasonable and practical approach to energy-related economic development incentives in Ohio.”

Commission spokesman Matt Butler said in an interview that the tariffs would allow officials to sell Ohio to prospective employers more easily.

Currently, business customers can get a one-time discount through certain programs, he said. But “This is more of an off-the-shelf option available, where you could say, ‘Hey, business X: There’s this tariff that if you meet these criteria, you can come in and get this special rate.”’

Ohio Edison, Toledo Edison and Cleveland Electric Illuminating told the commission in their filings that “there are simply not dollars available” to absorb the costs of the business discounts, once the costs of maintenance and operating costs and a reasonable rate of return are considered. The companies noted that Ohio’s constitution guarantees utilities that cost recovery.