COLUMBUS, Ohio — The Ohio Supreme Court will hear arguments Tuesday in a high-stakes case that could reshape how thousands of Ohioans are billed for electricity in apartment complexes.
At the center of the dispute is a 2023 decision by the Public Utilities Commission of Ohio (PUCO) that allowed five central Ohio apartment complexes to switch from American Electric Power (AEP) Ohio to a third-party provider, Nationwide Energy Partners (NEP).
AEP Ohio sued to challenge that decision, arguing that NEP is operating as an unregulated utility and should be subject to the same oversight and consumer protections as traditional utility companies.
The practice at issue is known as submetering—a system in which property owners or third-party companies install meters for individual units and bill tenants directly for electricity, water, or other utilities. Under Ohio law, owners of apartment buildings, condominiums, and mobile home parks are allowed to submeter utility services. However, AEP and consumer advocates contend that the increasing use of third-party submetering firms like NEP undermines consumer protections and inflates utility costs for renters.
Critics argue that submetering companies are effectively functioning as utilities, without the accountability or regulatory scrutiny that actual utilities face. “Utility middlemen,” AEP contends in legal filings, are creating “exclusive monopoly-like franchises” with property owners and assuming control of billing, pricing, and service disconnections—roles traditionally reserved for regulated entities.
NEP, one of AEP Ohio’s top ten largest purchasers of electricity as of 2021, has grown rapidly alongside the rising popularity of submetering in cities like Columbus, Cincinnati, and Cleveland. The company defends its operations as legal and authorized under current state law, but AEP and allies argue that the PUCO erred in greenlighting the switch without requiring NEP to comply with utility regulations.
In response, AEP Ohio is backing proposed legislation that would reclassify submetering companies like NEP as utilities, making them subject to PUCO oversight and consumer protection standards.
Tuesday’s oral arguments before the Ohio Supreme Court highlight the long-running debate over how Ohio regulates utility service in rental housing. The Ohio Supreme Court is expected to issue a decision in the coming months.
