Power to the Few: How Ohio’s “Deregulated” Electricity Market Became a Racket for Middlemen and Misguided Policy

By Nancy Carrington, Energy Correspondent - Community Advocate

In the name of competition, Ohio has allowed PJM (Pennsylvania, Jersey, Maryland, Interconnect), Ohio's Regional Transmission Operator (RTO), to create a Frankenstein market that punishes consumers, enriches middlemen, and erodes investment in infrastructure. The so-called “deregulated” energy marketplace is anything but free—it's a political contrivance benefiting third-party power resellers (CRES providers) at the expense of stability, affordability, and transparency. The results? Higher prices, deceptive marketing, and a grid held together by hope and duct tape.

Electric Distribution Utilities (EDUs) are barred from competing behind the meter (BTM) for large industrial users—such as steel mills, data centers, and refineries—despite their unmatched institutional knowledge and the fact that they built the grid Ohio relies on. Meanwhile, CRES providers sell electricity at higher rates than default generation service, often using fraudulent marketing that implies customers receive “100% wind and solar,” even though just 2% of Ohio’s grid is powered by those sources.

This illusion is not harmless. CRES providers are not investing in infrastructure. They are not building new transmission lines. They are not weatherizing the grid or planning for peak load events. They are, however, collecting profits on regulatory arbitrage and duping customers into paying more for energy that doesn’t exist as advertised.

By contrast, regulated states like Tennessee, Alabama, and Oklahoma enjoy lower electricity prices, more robust infrastructure, and greater investment in grid reliability. These vertically integrated models eliminate redundant bureaucracy and reduce the layers of rent-seeking behavior embedded in Ohio’s deregulated scheme.

PJM Interconnection—the regional operator supposedly overseeing fairness—has demonstrated bias, incompetence, and bureaucratic inertia. It recently oversaw an 800% capacity price spike, which will be passed on to every Ohio household in 2025–2026. Yet there is no added generation to show for it. This is not competition—it’s planned scarcity and managed failure.

The evidence strongly supports the argument that Ohio’s deregulated electricity market — particularly the role of CRES (Competitive Retail Electric Service) providers and the PJM market design — has failed to deliver on promises of consumer benefit, investment, and grid reliability. Here's what the documents reveal:

1. CRES Providers Routinely Charge More Than Default Utility Rates
   A 2024 academic study (Efficiency and consumer welfare under retail electricity
   deregulation: Analysis of Ohio's retail choice markets) published in the Journal of Critical Infrastructure Policy found that "as of 2021, roughly 82% of Ohio’s shopping customers were on offers that were more expensive than the standard service offer (SSO) default rate". This debunks claims that retail competition leads to lower prices and highlights that consumers are often paying a premium for “100% renewable” marketing gimmicks that are neither accurate nor beneficial.

2. Ohio’s Grid Investment Lags Regulated States
   The same study notes that deregulated states, such as Ohio, experience significantly less investment in transmission and distribution infrastructure compared to regulated states, like Tennessee, Alabama, or Oklahoma, which have more vertically integrated utilities. These regulated models allow Electric Distribution Utilities (EDUs) to plan and invest long-term, thereby avoiding the fragmentation that deregulation introduces.

3. Misleading Green Marketing by CRES Providers
   CRES providers have been documented using “100% renewable energy” claims based on the purchase of Renewable Energy Credits (RECs) — not the actual supply of clean power. This misleading advertising has been a consistent issue, with little transparency regarding the fact that these credits often originate from out of state and provide no actual renewable generation benefit to Ohio’s grid.

4. PJM’s Market Distortions Harm Ohio Consumers
   The June 2024 PJM capacity auction resulted in an 800% increase in capacity prices, driving up costs for all customers across the 13-state PJM region. Despite the price spike, no new power capacity was added, raising serious questions about the integrity and efficiency of PJM’s market structure.

5. The Case for EDU-Led Behind-the-Meter (BTM) Sales
   In light of these failings, the argument that EDUs should be prohibited from BTM power sales loses credibility. These utilities possess the institutional expertise and financial capacity to serve large industrial customers—such as data centers or steel mills—more efficiently. Preventing EDUs from offering BTM services protects the turf of inefficient middlemen, not consumers or grid reliability and prevents honest competition.

Ohio’s deregulated market has become a Rube Goldberg machine—overcomplicated, expensive, and ultimately ineffective. It prioritizes paper-thin retail competition and greenwashed marketing over real investment and reliability. Meanwhile, regulated states outperform in infrastructure buildout and price stability. Ohio lawmakers should embrace reforms that restore EDU flexibility, enhance accountability, and let pragmatic, infrastructure-focused development — including nuclear and BTM innovation — take the lead.

Industrial-scale customers should be allowed to sign BTM agreements with either EDUs or generators, especially when facilities are co-located or within 25 miles of each other. Keeping high-demand users off the grid relieves stress, increases predictability, and lowers costs for all ratepayers when new generation is added. This kind of flexibility is crucial for Ohio’s economic future, particularly if it wants to lead in nuclear energy, data center development, and advanced manufacturing.

Until policymakers recognize that deregulation has devolved into market manipulation and hollowed-out investment, Ohio will continue to fall behind. It’s time to let EDUs compete and deliver the power Ohio needs—reliably, honestly, and without a middleman taxing every electron.

Ohioans can expect much Higher Electricity prices over the next 3-5 years due to PJM's management of Ohio's Electricity Markets.