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The True Cost of Ohio Electricity Rate Increases

Ohio market insight · Rates & regulation

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Market-reference note: Numerical default-price examples below retain their cited 2026 reference period. They are historical class-level context, not a current account quote. Confirm the applicable business rate, components and effective dates on your bill before comparing an offer. How to establish your benchmark.

The short answer

A headline "rate increase" usually describes one piece of your bill, but your true cost is the sum of several pieces that change on different dates. Supply (the default SSO price or your contract) and capacity reset around June 1. Transmission riders update once or twice a year. Distribution changes come from rate cases and riders. To know what an increase costs you, apply each change to your own usage and your own contract status, then add them up. A 6% supply headline can be a 5% bill increase for one business and a 1% increase for another.

The statewide trend

EIA's figures show the scale. Ohio's average commercial price was about 10.75¢/kWh in 2023 and 10.66¢ in 2024, well below the U.S. average of 12.59¢ and 12.75¢. For January–June 2026, Ohio averaged about 13.78¢, against 11.07¢ a year earlier, a rise of roughly 24%, and now close to the U.S. figure of about 13.86¢.

EIA's September 2026 outlook projects commercial prices in the East North Central region (Ohio, Indiana, Illinois, Michigan and Wisconsin) of about 14.0¢ for 2026 and 14.2¢ for 2027. These are averages: revenue divided by kWh across all commercial customers. Your own number depends on your load shape and contract.

The parts of the bill that move, and when

Component What sets it When it changes Shoppable?
Generation (SSO or supplier) Utility SSO auctions, or your contract SSO resets each June 1; contracts at renewal Yes
Capacity PJM auction price × your capacity tag Price and tag reset each June 1 Yes, via supplier; tag via operations
Transmission FERC formula rates passed through utility riders Typically annual (AEP Ohio BTCR in April, with mid-year adjustments; FirstEnergy Rider NMB in April) No
Distribution PUCO rate cases and distribution riders Rate-case orders; rider updates No
Other riders PUCO-approved programs Varies; some end (the OVEC rider ended Aug. 14, 2025) No
kWh excise tax Ohio law (R.C. 5727.81) Rarely No

Ohio does not charge sales tax on electricity. The kWh excise tax is tiered monthly: $0.00465 per kWh for the first 2,000 kWh, $0.00419 for the next 13,000, and $0.00363 above 15,000.

Because these components move on different dates, bills rarely jump all at once. They step up over several cycles, which makes a year-over-year comparison of all-in cost the only fair test.

A worked example: three businesses, one year

Illustrative. The customer uses 240,000 kWh a year (20,000 kWh a month) on the Ohio Edison system. The delivery figures are assumptions for the example, not Ohio Edison tariff values.

Customer A: on the default SSO. The Ohio Edison small-business SSO went from about 8.87¢ to 9.38¢/kWh on June 1, 2026. Assume delivery charges total 4.50¢/kWh and rise 3% at the same time.

Line Before After Change
Generation (SSO) $21,288 $22,512 +$1,224
Delivery (assumed 4.50¢ → 4.635¢) $10,800 $11,124 +$324
kWh excise tax ($81.92/month) $983 $983 $0
Total $33,071 $34,619 +$1,548 (+4.7%)

The SSO rose 5.7% (0.51¢ on 8.87¢), but the bill rose 4.7%, because generation is only part of it.

Customer B: on a fixed contract through 2027. Assume a fixed supply price of 8.50¢/kWh. Only the delivery change reaches this customer: +$324 on a bill of about $32,183, or 1.0%. The supply increase arrives at renewal, and it will look like a jump unless it was budgeted.

Customer C: capacity passed through at cost. Assume a 50 kW capacity tag. At about $98.52 per kW-year (2025/26) versus $120.15 (2026/27), the capacity line rises from about $4,926 to $6,007. That is +$1,081, or about 0.45¢/kWh on 240,000 kWh, before any change in energy price. Compared with 2024/25 ($10.56 per kW-year, about $528 for the year), the increase is about $5,480, or 2.3¢/kWh.

These three results — 4.7%, 1.0%, and a capacity-driven step — all come from the same market over the same year, which is why statewide headlines do not predict any individual bill.

Why headline percentages mislead

  • Different bases. A utility's announced percentage often refers to a residential customer at 1,000 kWh a month, or to one component only.
  • Offsetting changes. In 2026, FirstEnergy's distribution rehearing lowered Ohio Edison and Toledo Edison revenue while raising CEI's. AEP Ohio's April 2026 rate order produced a net revenue decrease even as its transmission rider rose for residential customers.
  • Rate class matters. Transmission and distribution costs are allocated by class and voltage, so the same order can raise one schedule and lower another.
  • Timing lags. Capacity prices reach fixed-price customers only at renewal, sometimes a year or more after the auction.

How to measure your own true cost

  1. Pull 24 months of bills, plus your supplier invoices if you shop.
  2. Split each bill into supply, capacity (if billed separately), transmission, distribution, riders and tax.
  3. Compute all-in ¢/kWh by month, then compare the same months year over year so weather does not distort the result.
  4. Adjust for usage changes. If kWh rose 10%, a 10% bill increase is not a rate increase.
  5. Map upcoming changes: your contract end date, the June 1 SSO reset, April rider updates and pending rate cases.

The mechanics of each component are in the cost components guide, and the non-shoppable lines are explained in hidden costs on Ohio bills. To compare your ¢/kWh with peers, see benchmarking against EIA averages. To turn this into a 12–24 month budget, see energy budgeting for Ohio businesses.

For the specific FirstEnergy rate-case outcome and SSO changes, see Ohio Edison, CEI and Toledo Edison rate changes. For every utility's case status and the new three-year rate-case cycle, see Ohio utility rate cases in 2026. For the default price you are measured against, see the price to compare guide.

FAQ

Why did my bill rise more than the announced rate increase?

The announcement likely covered one component, or a residential example. Your bill also reflects capacity, transmission rider updates and your own usage. Break the bill into components and compare each year over year.

If I have a fixed-price contract, am I protected from rate increases?

Only from the supply portion your contract fixes. Transmission, distribution, riders and taxes change for every customer on the utility, and capacity may be passed through depending on your contract terms.

Is Ohio electricity still cheaper than the national average?

For commercial customers it was cheaper through 2024, but EIA data for the first half of 2026 put Ohio's average at about 13.78¢/kWh against about 13.86¢ nationally, so the gap has largely closed.

What is the single biggest driver of 2026 increases?

For most shopping and SSO customers, PJM capacity prices, which rose from $28.92/MW-day (2024/25) to $269.92 (2025/26) and $329.17 (2026/27). How much you feel depends on your capacity tag and contract terms.

Sources

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