How Ohio's Deregulated Electricity Market Works (2026)
The short answer
Ohio split electricity into two businesses. Your local utility (AEP Ohio, Duke Energy Ohio, AES Ohio, Ohio Edison, The Illuminating Company or Toledo Edison) still owns the wires, delivers power and restores outages under rates set by the Public Utilities Commission of Ohio (PUCO). The generation — the electricity itself — can be bought from any PUCO-certified competitive supplier. If you don't choose one, you pay the utility's default price, called the Standard Service Offer (SSO) or price to compare. Customers of municipal utilities and electric cooperatives generally aren't part of this system.
The pieces and who controls them
| Piece | Who provides it | Who sets the price | Can you shop? |
|---|---|---|---|
| Distribution (local wires) | Your utility | PUCO rate cases | No |
| Transmission (high-voltage grid) | Transmission owners, operated by PJM | FERC tariffs, passed through by utilities | No |
| Generation energy | Utility default or a certified supplier | Wholesale market + supplier contract | Yes |
| Capacity (being available at peak) | Bought through PJM auctions | PJM Base Residual Auction | Indirectly — through your supplier contract and your capacity tag |
A short history that explains today's bill
- 1999 — Senate Bill 3 restructured Ohio's electric industry; customer choice began in 2001.
- 2008 — Senate Bill 221 created electric security plans (ESPs) and market-rate offers as ways for utilities to set default prices.
- 2019 — House Bill 6 ended utility-run energy-efficiency mandates after 2020, cut the renewable portfolio standard to 8.5% in 2026 with nothing after 2026, and created the OVEC coal-plant charge (among other provisions).
- 2025 — House Bill 15 (signed May 15, effective August 14, 2025) repealed ESPs so default prices must come from competitive bidding, ended the OVEC charge, set a three-year rate-case cycle for utilities, expanded behind-the-meter generation for large ("mercantile") customers, and added renewal notices for small commercial supplier contracts (accounts of 25 kW or less). See the HB 15 business guide.
How the default price is set
Each utility buys the power for its default service through competitive wholesale auctions and passes the result through. Because auction products roll over each June, the default price resets on June 1 — in 2026 the FirstEnergy utilities' small-business (GS) averages rose about 6% to roughly 9.4¢/kWh, and Duke's small-business (DM) first block rose to about 11.36¢. The default price is a benchmark, not a floor: sometimes a supplier beats it, sometimes it's the best deal available. See Ohio price to compare by utility.
Where PJM fits
Ohio is part of PJM Interconnection, the grid operator for 13 states and D.C. PJM runs the wholesale energy market and the capacity auctions that set what generators are paid to be available. Capacity prices climbed from $28.92/MW-day (2024/25) to $269.92 (2025/26), $329.17 (2026/27), $333.44 (2027/28) and $325.00 (2028/29) — the last three at the auction's price cap. Every Ohio business pays for capacity through its generation price, whether default or contract.
Who can't shop
- Customers of municipal electric systems (for example Hamilton, Westerville, Cuyahoga Falls, Bowling Green, Piqua and parts of Cleveland and Columbus).
- Members of electric cooperatives, which serve rural parts of 77 of Ohio's 88 counties.
See municipal and cooperative areas for how to tell and what those businesses can still control.
FAQ
Is Ohio's electricity market deregulated for businesses?
Yes, for customers of the six investor-owned utilities: businesses can buy generation from a certified supplier while the utility delivers it. Municipal-utility and co-op customers generally cannot.
Do I have to choose a supplier?
No. If you don't, you pay the utility's default (SSO) price. Small businesses in communities with opt-out aggregation may be enrolled in the community's program unless they opt out.
Who regulates electricity suppliers in Ohio?
PUCO certifies suppliers, brokers and aggregators and enforces marketing and contract rules. The Office of the Ohio Consumers' Counsel represents residential customers.
What changed with HB 15?
It repealed electric security plans, ended the OVEC charge in August 2025, set regular rate cases, expanded behind-the-meter options for large users and added renewal notices for small commercial (25 kW or less) fixed-price contracts.
Sources
- Ohio Legislature, HB 15 (136th GA): https://www.legislature.ohio.gov/legislation/136/hb15
- PUCO Energy Choice Ohio: https://energychoice.ohio.gov/
- PJM capacity auction results: https://www.pjm.com/markets-and-operations/rpm
- Ohio Revised Code 4928.64 (renewable standard): https://codes.ohio.gov/ohio-revised-code/section-4928.64