12-Dec-21 Study Finds Ohio Worker Compensation Rates Dropped Compared To Other StatesA national study found Ohio workers’ compensation rates have dropped from 17th to 28th most expensive in the U.S. over the past two years. The state-run Bureau of Workers’ Compensation touted Ohio’s improved position on the Oregon Premium Rate Ranking Study Thursday, and said premium reductions over the past two years resulted in the lowest collectible rates for private employers in 24 years. “By working diligently with employers, workers, and other stakeholders, Ohio is continuing to reduce rates and becoming a better place to do business,” Administrator Steve Buehrersaid in a statement. “While we’ll continue to search for ways to provide more effective and efficient service, our improvement as measured in the Oregon study is a clear indicator that we’re headed in the right direction,” he said. Ohio’s base rate index of $1.84 per $100 of payroll was slightly below the national median of $1.88 in the 2012 study. In 2008, the state’s base rate index was $3.32. BWC said the average amount per $100 of payroll that thebureau will actually collect from private employers during 2012and 2013 is projected to be even lower at $1.74, which is the lowest rate in 24 years. That represents the amount the agency collects after applying an employer’s individual experience modifications and all discounts for participation in various programs. The study compares each state’s base rates for 50 commonclassification codes assigned to occupations to indicate their degree of risk. The report used Ohio’s private employer base rates that took effect July 1, 2011. In 2011, BWC reduced average base rates for private employers by 4% and held premium levels stable in 2012. BWC noted the study didn’t account for rate reductions in recent years for public employers, which were cut 5% in both 2011 and 2012, saving local governments an estimated $40 million over two years. Average collectible rates for public entities are at their lowest level since at least 1983, the bureau said. “Even since the Oregon study was completed, rates have come down in Ohio,” Administrator Buehrer said. “Lower rates and better care for injured workers helps improve the economy in our state.”

12-Dec-12 Ohio CPA's Recommend Federal ActionMembers of the Ohio Society of CPAs named policies that create jobs, address major tax reform and reduce the federal deficit as priorities they have for Congress and the president, according to a poll released Tuesday.

The group’s 2012 Ohio Business Poll found almost two-thirds of the 700 members surveyed said uncertainties about federal tax reform influence business decisions. Creating jobs and lowering unemployment (78%) and reducing the federal deficit (54%) were issues that should top the list for priority attention in Washington next year, they said.

“CPAs in Ohio and nationwide are witness every day to the toll that the current gridlock in Washington is taking on companies and the American public,” Ohio Society of CPAs Chairman Brendan Fitzgerald said in a release.

“The Ohio Society of CPAs urges our federal legislators to quickly end the stalemate and address the deficit and tax reform with major initiatives that will restore confidence in our economy and help businesses grow and create jobs.”

Among other things the survey learned from Ohio CPAs were:

• 95% favored some type of spending cuts to reduce the deficit.

• 48% preferred targeted reductions in government spending.

• 47% chose a combination of spending cuts and tax increases to deal with the U.S. debt crisis.

• 79% favor lower corporate tax rates in return for elimination of some tax credits.

• 68% oppose increasing tax rates for “high wealth” individuals and were roughly evenly divided on where to draw the high-income line: 40% selected income above $500,000 and 36% said $1 million and up; 16% said the threshold should be $250,000.

The survey was conducted in late October and early November by the Ohio Society of CPAs. More than 3,600 senior-level CPAs were polled with a 19.7% response rate.

27-Nov-12 Bill to Increase Health Insurance Mandates Being HeardSmall businesses have been long and consistent opponents of state-imposed health care coverage mandates. Health care mandates eliminate innovation and flexibility in plan design and also cause employer health care premiums to rise even more. Unfortunately, identical bills in the House and Senate proposing yet another mandate were recently introduced.

These latest mandate bills would expand Ohio’s mental health parity law to require coverage for Autism Spectrum Disorders, also known as pervasive developmental disorders. The Senate version, SB 381, is sponsored by Sen. Bill Seitz, while the House version, HB 598, is co-sponsored by Reps. Cheryl Grossman & Lou Terhar. Sponsor testimony on SB 381 is set for Wed., Nov. 28 in the Senate Health, Human Services & Aging Committee. HB 598 has been referred to the House Health & Aging Committee, and sponsor testimony is also scheduled on HB 598 for Wed., Nov. 28.

Employers, particularly small employers, have concerns about the impact this mandate – like any coverage mandate – may have on the affordability of health insurance. Since 2002, average annual premiums for employee health insurance have gone up an alarming 97%. It is estimated that the cumulative effect of requirements imposed in the federal Affordable Care Act (ACA) will result in premiums for a majority of employers in the small group market in Ohio increasing another 5% to 15% – above and beyond normal anticipated health care inflation.

Proponents will argue that the cost impact of this proposal would be minimal. Whether the cost of this government mandate would add a considerable amount or a comparatively small amount to an employer’s overall premium is debatable. What’s not debatable is that it will lead to an

increase. Employers can’t just continue to absorb higher premium costs due to government interference in the marketplace.

Lawmakers should seek a solution that doesn’t unfairly saddle only small employers with the entire cost of this new mandate.

27-Nov-12 Employment Discrimination Reform Bill IntroducedSenator Bill Coley has introduced an employment discrimination bill, SB 383. The bill addresses several harmful 1990s era Ohio Supreme Court rulings that even today negatively impact employers in defending against employment discrimination claims.

In the 1980s and 1990s, Ohio businesses had to deal with an activist Ohio Supreme Court that stymied legislative attempts to pass much needed reforms in Ohio. This activist Court essentially dismantled and rewrote legislation passed by the Ohio General Assembly reforming areas such as lawsuit abuse and the workers’ compensation system.

With the new makeup of the Court in the early 2000s, Ohio now has a supreme court that no longer legislates from the bench. The General Assembly passed tort reform and improvements to the workers’ comp laws in the last ten years that were upheld by a more restrained Ohio Supreme Court.

Even with these victories, there is still a legacy of employment discrimination cases adversely decided in the prior era of Court activism that have left Ohio at a competitive disadvantage compared to other states. For instance, an Ohio Supreme Court decision from 1994 allows an employee up to six years to sue an employer for alleged employment discrimination. This puts employers at a great disadvantage in defending such lawsuits. SB 383 will reduce the current six years to one year, making Ohio comparable to the rest of the states.

SB 383 also unifies the filing of age discrimination claims to the same procedures and remedies as all other protected classes. It also stops a business from having to simultaneously defend an administrative charge filed with the Ohio Civil Rights Commission and a lawsuit in court by requiring the claimant to either go to the Commission or to court, but not both. Additionally, the bill overturns a 1999 Ohio Supreme Court decision by eliminating the ability to name supervisors in a discrimination suit. This will bring Ohio in line with federal discrimination law and the laws of a majority of other states.

SB 383 is an important piece of legislation for Ohio businesses. It is likely to receive a few hearings before the end of the year in lame duck session.

30-Oct-12 Municipal Tax Uniformity Bill Makes It Easier to Do Business in OhioOn October 31, House Bill 601, a municipal tax uniformity bill was introduced. This legislation will make Ohio’s business climate more competitive by establishing uniform municipal income tax rules among all Ohio cities.

In Ohio, nearly 600 cities and villages impose a municipal income tax on individuals and businesses and Ohio is the only state that permits municipalities to create their own definitions, rules and regulations, mandate use of their own forms, assess varied amounts of penalties and interest, and impose different reporting timetables for the collection of municipal income taxes.

This has created a current municipal income tax system that is overly burdensome and expensive, forcing businesses to spend thousands of dollars on record-keeping, computer programming and expert advice.Thousands of Ohio businesses prepare and file tax returns with multiple cities every year and, in too many instances, companies incur more in administrative costs than the amount of tax actually paid.  This is costly and inefficient, robbing employers of time and money that could better be utilized to invest in and grow their companies.

House Bill 601 establishes a uniform municipal income tax system with one set of rules and regulations that apply to all Ohio cities that impose business and individual income taxes. It creates a simple, predictable and uniform municipal tax system that will make Ohio more business friendly.

Countless small businesses – perhaps even yours – understand all too well the problems that exist with the current system. But most state legislators do not. It's time for you to educate your state senator and state representative so they can better understand the challenges the current system imposes on employers. Dry cleaners need to let our legislators know that there is strong support for municipal income tax uniformity. 

20-Oct-12 Ohio Employers May Get from Workplace Discrimination LawsLegislation introduced Oct. 17 to reduce the statute of limitations on workplace discrimination lawsuits immediately drew fire from trial lawyers but also attracted strong support from the state’s largest business group.

Sen. William Coley (R-Middletown), the sponsor of the bill (SB 383), said Friday its enactment would bring employment discrimination laws in line with federal statute. However he had to respond right out of the starting block to opponents who claim the measure would grant immunity to employers who discriminate.

The sponsor said the bill would benefit both employers and workers when it comes to cases of discrimination or harassment in the workplace. His position was backed up by the Ohio Chamber of Commerce, which described the legislation as a long-sought prudent update to state law.

“It streamlines the entire process, making it much less onerous,” Sen. Coley said in an interview. “We’re trying to set it up so that if it was something concerning and you wanted to be able to bring it right through the Ohio Civil Rights Commission on your own versus spending all the money on attorneys and things like that, we wanted make sure the process was consistent that they could do that.”

The legislation would require a plaintiff to file a charge with the Ohio Civil Rights Commission or as a lawsuit in court but eliminate the ability to do both, which can be costly for employers to defend, Mr. Coley said.

“(Filing both) was just kind of an abuse of the process, and it was just something that was delaying justice and causing legal bills to mount,” he said.

Unlike other states with one- to two-year limitations on legal action, Ohio law provides employees six years to sue an employer for alleged discrimination. Senate Bill 383 would reduce the period to one year.

“We want to make sure that if somebody’s doing something improper, we want that brought out into the light of day … We want those cases brought sooner,” Mr. Coley said.

It additionally would prevent employees from suing both the company and the individual that committed the alleged discrimination, he said.

“Under current Ohio law, you can sue your employer in addition to suing the supervisor, so that means the employer has to fund two sets of lawyers … and it’s just a cumbersome process, it’s not permitted under federal law, and it’s just proven to be very unwieldy and improper,” the sponsor said. “Where else can I sue Bob Smith when I know that Bob Smith is acting on behalf of ACME Corporation?”

The Ohio Employment Lawyers Association reacted to the bill as soon as it was introduced, saying it would grant immunity to managers and supervisors who harass and intentionally discriminate against employees based on sex, disability, age, race, religion, military status or national origin.

The headline of the group’s news release on the bill declared: “Senator Coley Introduces Bill To Protect Sexual Predators.”

“I’m saddened that Sen. Coley would introduce legislation that discriminates against women, the disabled, minorities, veterans, the elderly and all others who are employed in the state of Ohio,” OELA Legislative Counsel Fred Gittes said in a release.

“We should be looking for ways to improve the working environment in Ohio to keep qualified employees here rather than eliminating protections and allowing hostility and racism in the workplace. We oppose the bill because it makes it cheap for employers to discriminate against employees by placing severe limits on what an employee can recover for intentional discrimination.”

Mr. Coley said OELA engaged in stakeholder meetings he held over the last year.

“We incorporated a number of suggestions they gave us in the bill,” he said. “They know darn tootin’ well that it does not protect anybody. It streamlines the litigation process.

“Now, some people benefit from a cumbersome litigation process, and they think that that works for their advantage, and I can understand that. They’re trying to represent clients, and if a cumbersome litigation process benefits their clients, they don’t want it changed, but we’re going to do the right thing for the people of the state of Ohio.”

OELA said Senate Bill 383 is similar to one (HB 300) from several sessions ago that was shelved by the Republican-controlled House. Mr. Coley said he did not look at that bill in drafting his own.

The Ohio Chamber of Commerce meanwhile said the legislation has been a long-standing priority for employers because it would protect businesses from expensive litigation and “unfair” employment law practices and at the same time ensure those who are discriminated against have an opportunity to pursue legal claims.

“The reforms contained in SB 383 will give employers a fair shake in defending against discrimination claims and will also help put Ohio’s legal system in sync with the employment laws of most other states,” Chamber Director of Labor and Human Resources Policy Tony Seegers said.

“This is important because a state’s legal climate can be either a major incentive or a major deterrent to business investment and job creation. We’d prefer to see Ohio become an even better place to build, expand or locate a business.”

Mr. Coley also characterized the bill as a way to attract new companies because the consistency with federal law provides predictability.

“We want to ferret (discrimination) out. We don’t believe that that has any place in the state of Ohio, and we don’t want that to go on, and that’s what we believe this bill will do,” he said.

“It will encourage good employers to locate in the state, it will get people their day in court quicker and at a lower cost, and it will not prevent anybody from proceeding against anybody under common law … It’s just a tweak to the system to bring it in line with the federal law.”

With only the short lame duck session remaining in this General Assembly, Mr. Coley said he expects to reintroduce the bill early next year.

18-Oct-12 Time Running Out for Care Label CommentsShare Your Thoughts with the FTC to Improve the RuleMake sure the Federal Trade Commission’s new care label rule will work for you. The FTC needs to hear from you by November 16 on the following proposed revisions. Stock answers do not carry as much weight as individualized comments so we have put together some bullet points that can serve as a starting point.  Please include specific examples where possible.

The FTC is proposing four specific revisions to the Rule:

1. Allow garment manufacturers and marketers to include instructions for professional wetcleaning on labels.

Indicate whether a professional wetcleaning label would be of help in your business. Indicate if you do drycleaning, wetcleaning or both in your business and if possible to

what extent you are drycleaning vs. wetcleaning.  Also, if possible, indicate what percentage of the garments you wetclean have a ‘dryclean’ label.

Indicate whether your customers ask for any type of cleaning or do they usually drop clothes at the counter or give them to the route driver without any specific instructions.

Indicate how many, if any of your customers ask you to wetclean their clothes. Stress the importance of including the word professional.  This is a relatively new

term and consumers could interpret wetcleaning as a process they can do at home.

2. Permit the use of ASTM Standard D5489-07, "Standard Guide for Care Symbols for Care Instructions on Textile Products," or ISO 3758:2005(E), "Textiles — Care labeling code using symbols," in lieu of terms. 

Indicate if care symbols, without corresponding words, would help or hinder you in your business.

If possible, detail the percentage of garments you currently receive that have care symbols on the label.

3. Clarify what can constitute a reasonable basis for care instructions.  Currently, a reasonable basis must consist of reliable evidence, not necessarily testing, supporting the instructions on the care label. The FTC is considering requiring “testing of the garment as a whole” in certain cases.

Give examples of garments that when cleaned according to the care label either the garment or components of the garment were damaged; such as multi-fabric garments, sequins, beads, signature buttons, spandex fibers, plasticizers, polyurethane coatings, certain sizings and finishes.  

Give examples of items that you know have an improper care label and required you to clean by a different method than that listed on the label to prevent damage from occurring.

4. Update and expand the definition of “dryclean” to reflect current practices and account for the advent of new solvents. Currently only perc and petroleum are specifically recognized under the Rule.  The proposed definition change includes other currently available solvents (perc, petroleum, silicone, glycol ether, carbon dioxide, aldehyde).

Indicate if the revised definition of ‘dryclean’ will benefit your business. Indicate which solvent or solvents you use and the percentage of garments processed

in each. Specify the pros and cons of using a particular solvent.

The complete notice of proposed rulemaking can be found here.  Your comments may be posted here.  Again it is very important for the FTC to receive as many comments as possible from the industry. 

04-Oct-12 PUCO Agrees To Rehear AEP Case  The Public Utilities Commission of Ohio agreed Wednesday to reopen details of American Electric Power’s contentious rate case. The commission said objections to AEP’s electric security plan raised by several parties, including FirstEnergy Solutions, school groups, the Ohio Consumers’ Counsel, industrial customers and the utility itself, warranted further consideration. The groups raised numerous concerns with the complex plan that capped rate increases at 12%, while allowing the company to recover certain capacity costs from customers in the future.  The PUCO typically grants requests for rehearing on major cases, but rarely makes drastic changes in the end. After the hearing, PUCO Chairman Todd Snitchler said in an interview that he couldn’t give any indication whether the commission might follow that pattern in AEP’s rate case. “We could never prejudge what our outcome will be in a case. But obviously we made a decision, and certainly if there are arguments that need to be made and recognized, we’ll look at those and evaluate them,” he said.

03-Oct-12 Ohio Minimum Wage Goes Up 15 Cents Jan. 1, 2013  

Ohio’s minimum wage will go up by 15 cents to $7.85 an hour beginning Jan. 1, 2013, the Ohio Department of Commerce announced today. 

For tipped employees, the new minimum will be $3.93 per hour, plus tips, an increase of 8 cents an hour. 

The state minimum wage is set annually because of an amendment to the Ohio Constitution approved statewide by voters in 2006. The amendment links the minimum age to the Consumer Price Index as applied to urban wage earners and clerical employees for a 12-month period ending annually in August. The CPI went up 1.7 percent from Sept. 1, 2011, to Aug. 31 this year, meaning the minimum wage is boosted by an equivalent percentage, rounded to the nearest 5 cents, the state agency said. 

The increase for 2013 is half of the 30-cent jump this year. The increase for previous years was 10 cents in 2011, zero in 2010, and 15 and 30 cents in 2008 and 2009, respectively 

The new year will also bring a slight change for companies that must pay minimum wage. As of Jan. 1, the wage will apply to businesses with annual gross receipts $288,000, a $5,000 increase over this year. Smaller companies, with gross receipts under $288,000 must pay the federal minimum wage of $7.25 and hour. The same rate applies to 14- and 15-year-old employees. 

Information on the increases is available online at http://www.com.ohio.gov/laws/docs/dico_2013MinimumWageposter.pdf

23-Aug-12 PUCO Approves AEP Rates  Utility regulators signed off Sept. 22 on American Electric Power’s projected rates under the company’s new electric security plan.The Public Utilities Commission of Ohio ordered AEP Ohio’s proposed rates under the ESP the commission approved earlier this month to take effect for the September billing cycle. The new tariffs show a typical residential customer using 1,000 kilowatts per month will see an increase of about $7.85, or 6.3%, in the 2012 bill for customers in the Columbus Southern Power rate zone and $6.94, or 6.1%, for customers in Ohio Power territory.  Typical commercial customers consuming 10,000 kWh per month with a 30 kW demand will see an increase of about $13.08, or 1%, for CSP customers and $49.87, or 4.8%, for OP customers, according to the tariffs. During the hearing, PUCO also approved AEP’s request to change its billing format to list the newly created riders as separate line items on the customer bills.

20-Aug-12 AEP Spells Out New Rate Plans Impact On Customer Bills  American Electric Power has filled in the blanks about how much its new electric security plan will increase customers’ bills with the filing of revised tariffs. The new information from AEP Ohio shows the rate plan that the Public Utilities Commission of Ohio recently approved would increase costs for residential customers the most, with more moderate rate hikes for small commercial and large industrial ratepayers. The changes are set to take effect in September. After approving the new ESP last week, PUCO Chairman Todd Snitchler predicted customer rates would increase about 5-7%, but couldn’t offer specifics.  Under the new tariffs, a typical residential customer using 1,000 kilowatt hours per month would see an increase of about $7.85, or 6.3%, on the total bill for customers in the Columbus Southern Power rate zone and $6.94, or 6.1%, in Ohio Power’s territory in 2012. Rates will rise another 2% the next year in both territories and another 1% in 2014. A typical commercial customer using 10,000 kWh per month would see a 1% increase of about $13.08 in the CSP rate zone and $49.87, or 4.8%, in OP territory in 2012, according to AEP. In 2013, small business CSP rates will increase another 1% and OP rates will rise 1-2%. Both territories will see another 1% increase in 2014. Large industrial ratepayers in the CSP zone can expect increases of 1.9-3.6% and OP’s industrials will pay 4-5.8% more in 2012. Then in 2013, large business customers’ rates in both territories hold steady before increasing 1% in 2014. “We have worked hard to minimize bill impacts on customers as we transition to a competitive market model,” AEP Ohio president and COO Pablo Vegas said in a statement. “Customers will benefit during this transition by having fixed generation rates and a greater ability to shop for a competitive price on their power generation service, and by having AEP Ohio take part in energy supply auctions.” Steep rate hikes under the plan the PUCO approved in 2011, especially for commercial class customers, prompted the commission to scrap the ESP completely and start over from scratch. The Ohio Consumers Counsel has voiced concern that the new plan shifts a disproportionate amount of the increase to residential customers. AEP attributed the rate increases to “deep discounts to third-party electricity generation suppliers” and distribution upgrades that the utility made previously. The company has said its cost to generate capacity – reserve power provided to competitors during periods of high demand – is $355.72 per megawatt-day.

However, the PUCO ordered AEP to charge competitive providers the market price of $20.01 MW-day, while allowing it to recover the difference of $188.88 MW-day from all customers in its territory over the next several years. Several customer groups, as well as AEP, recently asked the PUCO to reconsider its decision on the capacity case, albeit for different reasons.   AEP’s revised tariffs also show customers will pay more as a result of the PUCO’s decision several years ago to defer fuel cost increases until 2012. Earlier this month the commission approved the Phase-In Recovery Rider (PIRR) to recover the deferral over the next seven years.The PIRR will fall heaviest in the OP rate zone, causing a 3.7% increase for residential customers and a 4.1% hike for commercial ratepayers. Increases for both classes are 0.1% in CSP territory.

17-Aug-12 AEP Ohio Files Modified ESP Tariffs, Expects Changes to Take Effect in September  AEP Ohio, a unit of American Electric Power Thursday filed its Electric Security Plan (ESP) tariffs with the Public Utilities Commission of Ohio (PUCO). The tariffs show rate increases approved by the commission on a total bill basis that include generation, distribution and transmission charges. "We have worked hard to minimize bill impacts on customers as we transition to a competitive market model," said Pablo Vegas, AEP Ohio president and chief operating officer. "Customers will benefit during this transition by having fixed generation rates and a greater ability to shop for a competitive price on their power generation service, and by having AEP Ohio take part in energy supply auctions." Under the tariffs filed today, resulting from a PUCO order on Aug. 8 (see The Hannah Report, 8/8/12), a typical residential customer using 1,000 kWh per month would see an increase of approximately $7.85 (6.3 percent) on the total bill for customers in the CSP rate zone and $6.94 (6.1 percent) for customers in Ohio Power's rate zone in 2012. The increases are associated with distribution investments already made by AEP Ohio on behalf of the customers and for providing deep discounts to third-party electricity generation suppliers. A typical commercial (GS-2) customer using 10,000 kWh per month with a 30 kWh demand would see an increase of approximately $13.08 (1.0 percent) on the total bill for customers in the CSP rate zone and $49.87 (4.8 percent) for customers in Ohio Power's rate zone in 2012. In addition to the ESP rates, customers will begin paying for power generation fuel costs from the period 2009-2011 that the commission ordered AEP Ohio to defer for collection beginning in 2012. The company will collect the deferred costs over a seven-year period through a Phase-In Recovery Rider (PIRR). The PUCO approved this recovery on Aug. 2. A typical residential customer using 1,000 kWh per month would see a monthly PIRR cost of approximately $0.07 (0.1 percent) for customers in the CSP rate zone and $4.22 (3.7 percent) for customers in Ohio Power's rate zone.

 A typical commercial (GS-2) customer using 10,000 kWh per month with a 30 kWh demand would see an increase of approximately $0.68 (0.1 percent) for customers in the CSP rate zone and $42.22 (4.1 percent) for customers in Ohio Power's rate zone in 2012. Ohio Power rate zone customers experienced larger increases due to having a larger fuel deferral than CSP rate zone customers. The percentage increases also are factored on a total bill basis. The company expects the PUCO to approve the tariffs and the PIRR to commence with the first billing cycle in September. Customers are encouraged to go to http://www.hannah.com/Hannah/www.aepohio.com to find energy efficiency ideas that will help to reduce their bills.

15-Aug-12 PUCO Grants Rehearing for AEP Capacity Case  The Public Utilities Commission of Ohio (PUCO) decided Wednesday to reopen AEP Ohio's capacity rate case after several parties requested a rehearing. The current capacity rates that the PUCO had ordered in July will remain in place during the rehearing process.

The capacity rate for AEP Ohio, a case that started with the PUCO in December 2010, was decided upon in July with the commission's adopting a pricing system for the utility that would last through May 31, 2015.

A capacity charge is a cost established for competing electric suppliers that wish to sell power to customers in AEP territory.

In the July order, the PUCO ruled that the cost-based capacity price be set at $188.88 per megawatt-day and required AEP Ohio to charge competitive electric suppliers at a lower market-based capacity price known as the Reliability Price Model (RPM) price.

The current adjusted RPM price is $20.01 per megawatt-day for 2012/2013. In 2013/2014, the RPM is $33.71 and then $153.89 for the year after that. (See The Hannah Report, 7/2/12.)

Last week, the PUCO delivered its order on AEP's entire electric security plan (ESP) which set a course for the company to transition to a competitive market and also established the rider that would be used to make-up the cost between the cost-based capacity price and the RPM.

The capacity rate case docket number, 10-2929-EL-UNC, is back on the PUCO agenda for the meeting scheduled Wednesday, Aug. 15. That is when the PUCO will announce whether or not it will grant a rehearing for the case.

Steven Nourse, counsel for AEP Ohio, filed for a rehearing with the PUCO and claimed that the order was "unreasonable and unlawful." Nourse wrote that the PUCO was right in allowing AEP Ohio to receive a cost-based compensation for capacity instead of the RPM-based price. However he opposed the price that the commission set.

"That is because the commission adopted an unreasonable and unlawful energy credit, sponsored by staff, that reduces the capacity charge by an unreasonable amount that cannot be supported. As an initial matter, the commission utterly failed, with respect to the energy credit, to meaningfully set forth any reasons or facts upon which its adoption of the energy credit is based," wrote Nourse.

AEP Ohio has said that its actual cost of capacity is $355 per megawatt-day.

OCC's Bruce Weston also filed a motion for a rehearing with the PUCO, suggesting that the customers would be hit hard with deferred costs due to the capacity rate ruling.

"Through this Application for Rehearing, the OCC seeks to protect customers from paying hundreds of millions of dollars that may result from the unjust and unreasonable rates in the commission's order in this case," wrote Weston.

He went on to list the objections that the OCC has with the order which include: - The PUCO erred because it allowed wholesale capacity costs to be deferred for potential collection from customers in retail electric service rates under the company's ESP. - The PUCO erred in adopting cost-based pricing instead of the RPM as the state compensation mechanism. - The PUCO erred as it has no authority to establish a wholesale capacity rate under Revised Code Chapters 4905 and 4909. - The PUCO erred in creating unfair competition with potential subsidies, double payments and discrimination.

FirstEnergy, which is a major competitor to AEP Ohio, also filed for a rehearing arguing that the PUCO's rate was unlawful and unreasonable because the commission did not follow the requirements in its rate-setting authority.

FirstEnergy also argued that the order failed to "establish that any charge for the recovery of deferred capacity costs should terminate upon the establishment of corporate separation by Ohio Power Company (AEP Ohio)."

14-Aug-12 BWC Considers Employer Refund, Premium Reduction As Net Assets Grow  The value of the Bureau of Workers’ Compensation’s net assets is higher now than it has been in more than a decade and the board is discussing whether to give employers back a portion of their premiums or make other changes. In light of the BWC’s increasingly rosy financial outlook, staff proposed five options for the Board of Directors to consider earlier this year, including a refund of 25% of employers’ premium payments worth about $200 million. Alternatively, BWC could leverage its net assets to reduce employers’ overall premium rates, staff suggested, noting the board could adopt a more optimistic estimate on investment returns while staying within the consulting actuaries’ recommended range. Another option included in the memo from Tracy Valentino, the bureau’s chief fiscal & planning officer, is to use the assets to transition to a prospective billing cycle. Currently BWC bills employers in arrears and switching to a more standard approach has been

difficult because businesses would have to pay premiums for both the previous term and the next reporting period, she said. The remaining two options are largely housekeeping proposals. One would modify funding ratio and net leverage guidelines to bring them more in line with private insurance carriers. The other proposal would decrease the discount rate, which would increase the amount of money reserved to pay the future estimated cost of injured worker claims. BWC’s net assets totaled about $7.6 billion at the end of June, the highest level since 2000, according to Ms. Valentino’s analysis. The bureau’s funding ratio, which compares holdings to liabilities, is at its highest level since 2001, giving the bureau a relatively safe margin to be able to pay its injured worker claims. BWC spokeswoman Melissa Vince said the board discussed the options at a recent meeting, but has no plans to take immediate action.“All of those options are still a consideration,” she said. The board’s policy does not require any action to be taken in response to growing net assets. The next BWC Board meeting is scheduled for Aug. 23 and 24. Karen Gillmor, chairwoman of the Industrial Commission, which adjudicates workers’ compensation appeals, told members of the Small Business Advisory Council during a recent meeting that BWC Administrator Steve Buehrer was working on a proposal to refund 9% of employer premiums. Workers compensation attorney Phil Fulton, who helped guide former Gov. Ted Strickland’s changes to the BWC after the “Coingate Scandal,” said offering employers refunds was a controversial practice used frequently in the 1990s. Past administrations have been accused of using BWC refunds to curry favor with business during election years, he said in an interview. “Clearly it’s a quick way of people liking what you’re doing because you’re giving money right back. Whether that is the best use of it, I’m not so sure.” The United Autoworkers filed a lawsuit challenging the use of refunds several years ago, he recalled, noting the union argued that once premiums are deposited in the trust fund, the money no longer belongs to employers. The suit led to a change in statute and BWC guidelines for granting dividends, he added. Instead of granting employers a one-time bonus, net assets should be used to cut overall base rates, Mr. Fulton said. “The administrator has a fiduciary duty to keep premiums as low as possible, obviously with as much money in the system as possible to pay for injuries,” he said. “So if we have too much in there, then let’s reduce premiums.” Ohio Chamber of Commerce President and CEO Andy Doehrel said his group would rather see the BWC use its surplus to refund a portion of employers’ premiums to avoid unpredictable changes to premium rates. 

“While on the surface reducing base rates appears a no-brainer, the problem becomes, if you reduce them and have to jack them back up next year, you’re providing that yo-yo that employers don’t like,” he said. “Let’s keep things on an even keel.” Continuing uncertainty in the market makes a base rate reduction too risky, he said. “Looking at a rebate or providing a credit or something of that nature is probably the more prudent way to go.” Mr. Doehrel contested the suggestion that BWC refunds were used for political purposes. During the heady days of the stock market bubble in the 1990s when the bureau’s investments were soaring, employers received rebates of up to 75% for at least five or six years in a row, he said. “If that was an election year ploy, they really stretched it.” Employers took annual dividend checks for granted until BWC dropped the practice when the market soured around the turn of the century, he said. “As soon as the 75% went away everybody screamed.”

13-Aug-12 Akron Paper Analyzes Electric Rate Action  Customers secondPublished: August 11, 2012 - 05:27 PM:  Akron Beacon JournalAmerican Electric Power long has made clear that its rate case before the Public Utilities Commission of Ohio has been about the money. The power company has insisted it needs a generous cushion of cash to make a transition to a competitive market during the next three years.

On Thursday, the PUCO unveiled its most recent effort to accommodate the utility. You may remember the first try, a rate plan that blew up in the commission’s face, some customers facing increases of 30 percent or more in their bills. The PUCO eventually retreated.

Now it has approved a plan that spreads the price increases more widely across the customer base. Todd Snitchler, the commission chairman, projects increases in the 5 percent to 7 percent range — with a limit of 12 percent.

What should trouble consumers is that there are such higher rates at all. Recall that electricity prices have been declining elsewhere, rates near low points for the past decade. More, state lawmakers approved legislation a few years ago that put consumers first. If the market-based price proved lower than the rate achieved in more traditional regulation, then the market result would prevail, customers benefiting from the better deal.

All along, AEP has insisted that such an approach just wouldn’t work financially, warning that Wall Street would rebel, the company threatening job losses, even to move its headquarters from the state. What the PUCO has done for the past year is put consumers second, maneuvering around the law to meet the needs of the power company.

The commission points to the improvements in the new rate plan. True enough, certain restrictions on customers shopping for better prices have been lifted. Still, the market isn’t driving AEP rates. Something called a “rate stability rider” has been concocted to route additional revenue to the utility. That 12 percent cap actually means that AEP will tap

customers later, one estimate putting the above-market charges at $700 million.

Consider how Wall Street reacted to the news of the PUCO decision. American Electric Power enjoyed a bump in its share price. That should be a sufficient signal of the outcome. The power company got the money. Now customers will pay, no matter, apparently, the market and the law.

13-Aug-12 Snitchler Touts Competition In AEP Territory  One day after finalizing a plan to transition American Electric Power to the competitive market, the chairman of the Public Utilities Commission of Ohio told business leaders that shopping for electricity could benefit their bottom lines. During a Thursday meeting of the Small Business Advisory Council, which guides the Kasich Administration’s Common Sense Initiative Office, PUCO Chairman Todd Snitchler said the new rate plan for AEP Ohio would push the state further toward a deregulated market for electricity, where consumers could shop for competitive generation service. The chairman predicted consumers in AEP’s service territory would soon see a blossoming of new offers from competitive electricity suppliers that could help small businesses save money on their utility bills. “The implementation of competition is helpful in that it will necessarily drive down prices,” he said, recalling that he recently saw an offer for free nighttime generation service in another service territory where the market was more robust. Electric competition requires consumers to be more engaged in reviewing their options and tailoring their usage to maximize the savings, Mr. Snitchler added. The chairman noted that he recently reinstated the PUCO’s Office of Retail Competition to help inform consumers and businesses on how to effectively shop for electricity and offered to send representatives to deliver presentations to local business groups. Earlier this week the PUCO approved a rate plan that is designed to fully set AEP’s generation rates through competitive auctions starting June 1, 2015. While base generation rates are frozen during the three-year term of the electric security plan, overall costs for customers are expected to increase due to the addition of several surcharges.  Chairman Snitchler said competition will enable customers to benefit immediately from historically low prices for electricity resulting from the shale gas boom occurring in Ohio and other parts of the country. However, increasingly stringent federal environmental regulations are forcing utilities to retire some coal-fired power plants that could eventually increase costs for consumers, he said, noting that companies in Ohio have already announced plans to shut down six gigawatts of generation. Ohio currently imports about 10% of its electricity from other states and that could increase in coming years, he said in response to a question from SBAC member Brandon Cohen. Mr. Snitchler said that PJM Interconnection, which manages the region’s power supply, currently has more capacity than necessary and will be able to manage the plant closures in the near

future.“It’s not as if we’re going to be short on power immediately,” he said. However, there could be a shortage of generation in about 10 to 15 years if the retired units are not replaced, he added. Utilities and policymakers are discussing ways to respond to the pending plant closures, he said, noting that the Ohio Power Siting Board has seen a recent uptick in applications for new transmission lines to reroute the electricity grid.  Considerable discussion has centered on building a new fleet of natural gas-fired power plants, Mr. Snitchler said, noting that the Utica Shale and Ohio’s proximity to gas-rich Pennsylvania make the state a “prime location” for new gas plants. Coal-fired power plants still provide about 86% of Ohio’s electricity generation and will continue to be an important part of the mix, even as generation shifts to natural gas, he said. “Coal’s not going away.” Responding to a question from SBAC member Crystal Faulkner, said many people had the misconception that their local utility would “blacklist” them if they switched to a competitive supplier and would not respond to service calls. He noted that incumbent providers continue to be subject to reliability requirements for transmission and distribution for all customers in their territory. 09-Aug-12 PUCO Establishes AEP Ohio Generation Rates  The Public Utilities Commission of Ohio (PUCO) ruled Wednesday on a modified version of AEP Ohio's electric security plan (ESP), which will establish generation rates for customers through May 31, 2015, and result in an increase in ratepayers' electric bills.

The approved plan sets a schedule for AEP to transition to a competitive market so that generation rates will be set completely through competitive bidding beginning in June 2015.

As of now the base generation rates will be frozen at current levels. Then AEP will conduct an energy-only auction for 10 percent of its standard service offer (SSO) load upon the completion of its pending corporate separation plan.

On June 1, 2014, AEP will then conduct another energy auction that would be for 60 percent of its SSO load. A third auction will be held by Jan. 1, 2015 for 100 percent of the SSO load from AEP.

The PUCO has ordered AEP to file a detailed process on how that competitive bidding will happen; that plan is due to the commission by Dec. 31.

Because base generation rates are frozen, the factor that will take effect and that will cause ratepayers to see an increase in their bill is the different "riders" that are either already in place or that were established through the PUCO's order on Wednesday, according to PUCO Chairman Todd Snitchler.

Riders are mechanisms to help a company recover costs from different sources such as storm damage. Snitchler said that it is difficult to tell ratepayers exactly how much of an increase they might see on their bill because of the nature of the riders and their variables.

However, Snitchler said that he would estimate an average ratepayer could see an increase of 5 to 7 percent on the electric bill starting in September. He also emphasized that was an estimate, and that the commission placed a 12 percent cap on how much of an increase a customer could see on a bill.

"We've created that relief valve that if anyone was an outlier -- that for any reason hit that 12 percent -- then they're going to have a deferral for anything above that 12 percent in an effort to mitigate any outlier that appears," Snitchler said, explaining that in a previous order, too many ratepayers experienced a large spike in their bills. "We think that's exactly what they would be is outliers, as opposed to the prior order, where we had so many folks who said 'Our rates are going through the roof and there's no remedy for us, what can possibly be done?' And so we tried to create that remedy in advance in the off chance that that occurs."

During Wednesday's PUCO meeting, Snitchler and Commissioner Steven Lesser both suggested that the ESP order found a fair balance that would both help consumers as well as provide a fair return on equity for AEP Ohio. Snitchler said the commission believes AEP will "comfortably" return somewhere between the 9 percent and 10 percent range.

"That's low on the national average about what utilities can collect. I've seen as high as 11.5 (percent) at other utilities in different parts of the country. But it's also higher than some utilities are presently collecting so it gives them what we think is a very fair rate of return," said Snitchler. "And (the 12 percent) also gives them flexibility if they do earn more -- they're not immediately penalized." 

A major issue for the PUCO as the commissioners decided on a ruling for AEP's ESP case was the handling of capacity rates. Those are costs for competing electric suppliers to sell power to customers in AEP territory. Last month the commission adopted a pricing system that started Wednesday through May 31, 2015. The commission set the cost-based capacity price at $188.88 per megawatt-day, requiring AEP to charge competitive electric suppliers at a lower market-based capacity price known as the Reliability Price Model (RPM) price. (See The Hannah Report, 7/2/12.)

Based on Wednesday's order, AEP can defer those costs to the customers using the Retail Stability Rider (RSR) that was established through the ESP. That exact cost is not yet known because AEP will have to determine the rates based on the customers who decide to shop for other utilities.

AEP customers will not see the cost deferrals for capacity charges until 2015.

Commissioner Lynn Slaby, who voted in favor of the ESP order, wrote a concurring opinion to express his reservations on an RSR.

"It is my opinion that generally the use of an RSR with decoupling components lacks certain benefits to consumers. In addition, a company that receives that RSR has little, if any, incentive to look for more operating efficiencies to reduce consumer costs," Slaby wrote in the order. "Consequently, these inefficiencies could lead to additional costs to consumers in the long run. Although these concerns led to my reservations in this present case, I am also fully aware that certain cases present specific circumstances that necessitate setting aside individual concerns for the greater good."

The Office of the Ohio Consumers’ Counsel (OCC) released a statement following the PUCO's ruling, which stated that the decision means customers will see hundreds of millions of dollars in new rate increases. The OCC's main concern is also the RSR, which it had opposed in the past.

“Ohio consumers, who have faced challenges in a difficult economy, should be benefiting from historically low prices in the electricity market,” Ohio Consumers’ Counsel Bruce J. Weston said. “Unfortunately, Ohioans will be asked to pay dearly for AEP’s transition to competition. That’s unfair.”

The OCC said it was still reviewing the PUCO's order.

Commissioner Cheryl Roberto, who voted against the PUCO's order for the capacity charges, was also the only commissioner to vote in opposition to Wednesday's order.

"I decline to join my colleagues in finding that the quantitative advantage of $388 million dollars that an MRO (market rate offer) would enjoy over the proposed ESP is overcome by the non-quantifiable benefit of moving to market two years and three months faster than what would have occurred under an MRO," wrote Roberto. "For this reason, I do not find that the proposed modified ESP, as modified pursuant to the opinion and order, including the pricing and all other terms and conditions, deferrals and future recovery of the deferrals, and quantitative and qualitative benefits, is more favorable in the aggregate as compared to the expected results that would otherwise apply under Section 4928.142, Revised Code."

On Wednesday afternoon, following the PUCO's order, AEP Ohio responded by claiming that the decision grants many of the elements needed to address distribution reliability, economic development, and energy efficiency. However, AEP added that there were some issues that the commission did not resolve.

“We respect the Ohio commission’s decision to accelerate the move to full competition, but have consistently emphasized the need for a reasonable transition that maintains the health of AEP Ohio,” said Nicholas K. Akins, AEP president and chief executive officer. “Today’s commission order, when combined with the capacity order of July 2, provides more clarity on the timing and specifics of the transition. As we review the order and consider next steps, we will seek additional certainty regarding the transition to competition that our investors require.”

Another concern posed by AEP in response the PUCO's decision was the fact that the commission did not make an order out of the utility's corporate separation case. AEP claimed that the order doubles the competitive auction amount in 2013 and "significantly advances the timing of subsequent auctions."

“We are disappointed that the overall value in the commission’s order falls short of the reasonable proposal the company offered,” Akins said.

For the full record of the AEP Ohio case before the PUCO and the commission's order visit, http://dis.puc.state.oh.us/CaseRecord.aspx?CaseNo=11-0346.

8-Aug-12 PUCO Establishes AEP Ohio Generation RatesThe Public Utilities Commission of Ohio (PUCO) ruled Wednesday on a modified version of AEP Ohio's electric security plan (ESP), which will establish generation rates for customers through May 31, 2015, and result in an increase in ratepayers' electric bills.

The approved plan sets a schedule for AEP to transition to a competitive market so that generation rates will be set completely through competitive bidding beginning in June 2015.

As of now the base generation rates will be frozen at current levels. Then AEP will conduct an energy-only auction for 10 percent of its standard service offer (SSO) load upon the completion of its pending corporate separation plan.

On June 1, 2014, AEP will then conduct another energy auction that would be for 60 percent of its SSO load. A third auction will be held by Jan. 1, 2015 for 100 percent of the SSO load from AEP.

The PUCO has ordered AEP to file a detailed process on how that competitive bidding will happen; that plan is due to the commission by Dec. 31.

Because base generation rates are frozen, the factor that will take effect and that will cause ratepayers to see an increase in their bill is the different "riders" that are either already in place or that were established through the PUCO's order on Wednesday, according to PUCO Chairman Todd Snitchler.

Riders are mechanisms to help a company recover costs from different sources such as storm damage. Snitchler said that it is difficult to tell ratepayers exactly how much of an increase they might see on their bill because of the nature of the riders and their variables.

However, Snitchler said that he would estimate an average ratepayer could see an increase of 5 to 7 percent on the electric bill starting in September. He also emphasized that was an estimate, and that the commission placed a 12 percent cap on how much of an increase a customer could see on a bill.

"We've created that relief valve that if anyone was an outlier -- that for any reason hit that 12 percent -- then they're going to have a deferral for anything above that 12 percent in an effort to mitigate any outlier that appears," Snitchler said, explaining that in a previous order, too many ratepayers experienced a large spike in their bills. "We think that's exactly what they would be is outliers, as opposed to the prior order, where we had so many folks who said 'Our rates are going through the roof and there's no remedy for us, what can possibly be done?' And so we tried to create that remedy in advance in the off chance that that occurs."

During Wednesday's PUCO meeting, Snitchler and Commissioner Steven Lesser both suggested that the ESP order found a fair balance that would both help consumers as well as provide a fair return on equity for AEP Ohio. Snitchler said the commission believes AEP will "comfortably" return somewhere between the 9 percent and 10 percent range.

"That's low on the national average about what utilities can collect. I've seen as high as 11.5 (percent) at other utilities in different parts of the country. But it's also higher than some utilities are presently collecting so it gives them what we think is a very fair rate of return," said Snitchler. "And (the 12 percent) also gives them flexibility if they do earn more -- they're not immediately penalized."

A major issue for the PUCO as the commissioners decided on a ruling for AEP's ESP case was the handling of capacity rates. Those are costs for competing electric suppliers to sell power to customers in AEP territory. Last month the commission adopted a pricing system that started Wednesday through May 31, 2015. The commission set the cost-based capacity price at $188.88 per megawatt-day, requiring AEP to charge competitive electric suppliers at a lower market-based capacity price known as the Reliability Price Model (RPM) price. (See The Hannah Report, 7/2/12.)

Based on Wednesday's order, AEP can defer those costs to the customers using the Retail Stability Rider (RSR) that was established through the ESP. That exact cost is not yet known because AEP will have to determine the rates based on the customers who decide to shop for other utilities.

AEP customers will not see the cost deferrals for capacity charges until 2015.

Commissioner Lynn Slaby, who voted in favor of the ESP order, wrote a concurring opinion to express his reservations on an RSR.

"It is my opinion that generally the use of an RSR with decoupling components lacks certain benefits to consumers. In addition, a company that receives that RSR has little, if any, incentive to look for more operating efficiencies to reduce consumer costs," Slaby wrote in the order. "Consequently, these inefficiencies could lead to additional costs to consumers in the long run. Although these concerns led to my reservations in this present case, I am also fully aware that certain cases present specific circumstances that necessitate setting aside individual concerns for the greater good."

The Office of the Ohio Consumers’ Counsel (OCC) released a statement following the PUCO's ruling, which stated that the decision means customers will see hundreds of millions of dollars in new rate increases. The OCC's main concern is also the RSR, which it had opposed in the past.

“Ohio consumers, who have faced challenges in a difficult economy, should be benefiting from historically low prices in the electricity market,” Ohio Consumers’ Counsel Bruce J. Weston said. “Unfortunately, Ohioans will be asked to pay dearly for AEP’s transition to competition. That’s unfair.”

The OCC said it was still reviewing the PUCO's order.

Commissioner Cheryl Roberto, who voted against the PUCO's order for the capacity charges, was also the only commissioner to vote in opposition to Wednesday's order.

"I decline to join my colleagues in finding that the quantitative advantage of $388 million dollars that an MRO (market rate offer) would enjoy over the proposed ESP is overcome by the non-quantifiable benefit of moving to market two years and three months faster than what would have occurred under an MRO," wrote Roberto. "For this reason, I do not find that the proposed modified ESP, as modified pursuant to the opinion and order, including the pricing and all other terms and conditions, deferrals and future recovery of the deferrals, and quantitative and qualitative benefits, is more favorable in the aggregate as compared to the expected results that would otherwise apply under Section 4928.142, Revised Code."

On Wednesday afternoon, following the PUCO's order, AEP Ohio responded by claiming that the decision grants many of the elements needed to address distribution reliability, economic development, and energy efficiency. However, AEP added that there were some issues that the commission did not resolve.

“We respect the Ohio commission’s decision to accelerate the move to full competition, but have consistently emphasized the need for a reasonable transition that maintains the health of AEP Ohio,” said Nicholas K. Akins, AEP president and chief executive officer. “Today’s commission order, when combined with the capacity order of July 2, provides more clarity on the timing and specifics of the transition. As we review the order and consider next steps, we will seek additional certainty regarding the transition to competition that our investors require.”

Another concern posed by AEP in response the PUCO's decision was the fact that the commission did not make an order out of the utility's corporate separation case. AEP claimed that the order doubles the competitive auction amount in 2013 and "significantly advances the timing of subsequent auctions."

“We are disappointed that the overall value in the commission’s order falls short of the reasonable proposal the company offered,” Akins said.

For the full record of the AEP Ohio case before the PUCO and the commission's order visit, http://dis.puc.state.oh.us/CaseRecord.aspx?CaseNo=11-0346.

17-Jul-12 - Transitional Work Grant Applications Available  Applications are available for a new grant program aimed at helping employers in developing transitional work programs to get employees back to work or keep them on the job after being injured in an employment setting, Bureau of Workers Compensation (BWC) recently announced. The Transitional Work Grant Program gives employers funds to design programs and personalize job accommodations for a specified period to gradually return injured workers to their original positions of employment, according to the agency, according to BWC.The three-to-one matching grants are available to companies with more than 11 employees but assistance is available for smaller companies to develop their plans, BWC said. Grant amounts range from up to $2,900 for companies with 11-49 employees and as much as $6,300 for those with more than 200 workers.

06-Jul-12 New AEP Capacity Rates Worry Consumer Advocate  

In a response to a decision by the Public Utilities Commission of Ohio (PUCO) regarding American Electric Power's (AEP) new capacity rates, the Office of the Ohio Consumers' Counsel (OCC) said Monday it is concerned about the possibility of costs being handed down to customers.

The capacity rates are costs that the utility can charge to competitors that sell electricity to customers in AEP territory.

On Monday, PUCO established a capacity rate of $188.88 per megawatt day for AEP Ohio and ordered the company to charge its competitors a lower market-based rate of $20.01 per megawatt day, also known as the Reliability Price Model (RPM).

Officials with OCC are concerned about how AEP will make up the difference between the two rates. As of now, the utility could differ the cost to customers, and according to the consumers’ counsel, AEP could add interest of about 11 percent. 

The process in which AEP covers the difference between the two rates will be decided in a different PUCO case that will approve AEP's entire Electric Security Plan (ESP). The capacity charge was a piece of the ESP that PUCO handled separately. 

In a statement released by OCC Tuesday, the group mentioned its previous recommendation that residential customers not compensate AEP for any revenue lost during the transition to a competitive market.

The OCC stated that it was concerned that residential customers could pay hundreds of millions of dollars to help cover the costs created by the PUCO ruling. It also referred to the concurring and dissenting opinion by PUCO Commissioner Cheryl Roberto.

She agreed in updating the rate to the cost-based charge of $188.88 per megawatt day. But in the opinion, she wrote, "I depart from the majority, however, in the analysis of the nature of the Fixed Resource Requirement and, as a result, the bases for the commission's authority to update the state compensation method for the Fixed Resource Requirement.

"Additionally, I dissent from those portions of the majority opinion creating a deferral of a portion of the authorized cost-based Fixed Resource Requirement rate adopted today." 

The PUCO is expected to make a decision on the ESP in early August.

05-Jul-12 New BWC Premium Payment Discounts  The Bureau of Workers’ Compensation has added two premium discounts that a private employer may take advantage of beginning with the premium that is due to the BWC in August of 2012. Public employers can begin to take advantage of the discounts beginning with their July 1, 2013, payroll reports. The ‘Go-Green Discount’ will allow employers to receive a 1% Premium Discount (up to $1,000 every six months) if they agree to receive and pay their payroll report electronically, in full, on the BWC website ohiobwc.com. The ‘Lapse-Free Discount’ will provide an employer with an additional 1% Premium Discount (up to $1,000 every six months) if they have had no lapses in coverage during the

past 60 months.

05-Jul-12 BWC Transitional Workplace Grants  Grant money is now available from the Ohio BWC! Beginning July 1, 2012, the Ohio Bureau of Workers' Compensation has re-introduced the Transitional Workplace Grant Program (TWP) for all Ohio employers. The BWC has enhanced the Program this year to include an employer incentive of a 10% rebate on your annual workers’ compensation premium for employers who have a future transitional work claim that utilizes this certified program. This incentive will only be available to employers who have and utilize a certified BWC Transitional Work Program. By formalizing your Transitional Work Program in accordance with the BWC rules and regulation, it will assure your ability to participate in the 10% incentive.

05-Jul-12 "Renew Ohio" Provides Help for Businesses Affected by Recent Storms  Businesses and farms affected by severe weather may be eligible for an interest rate reduction on new and existing loans at eligible banks. The program through the Ohio treasurer's office has $25 million available to those who qualify. In order to qualify, business owners and farmers must:

Have suffered severe damage or loss as a result of the severe weather this year; Obtain a loan from an eligible bank or apply for a reduction on a current loan to

improve cash flow; Agree to comply with monitoring requests as required by the Ohio Treasurer.

Renew Ohio Application Process Call the Ohio Treasurer’s office at 1-800-228-1102 option #3 to identify an eligible

bank. Borrowers can apply for an interest rate reduction on a new or existing loan at a

branch of an eligible bank. The lender will accept and review applications (Form 1-SBRO for businesses and

farmers), applying the usual lending standards to determine the credit worthiness of the applicants.

The interest rate reduction applies on up to $400,000 of the loan, but the limit may be revised on a case-by-case basis.

The lender will fill out an application (Form 2-RO). The amount of the loan, a description of the affected property and the extent of the damage it has sustained, and the certified borrowing rate offered to the applicant should be filled out on the application.

A two-year investment will be placed with the lender at a percentage rate below current market rates. The lender will pass the interest rate reduction to the borrower.   

For more information, visit the Ohio Treasurer's website.

28-Jun-12 Dry Cleaner Electric Rates on the Block  American Electric Power portrays itself as the victim. In its recent ad campaign, running parallel to its request for a rate increase, the utility warns about diminished competition and lost jobs. What Ohioans should know is that the company mostly is concerned about its own

competitive posture. The jobs at risk? AEP has warned that if it doesn’t get its way with regulators, it may reduce the ranks of its employees.

On Monday, the Public Utilities Commission of Ohio is expected to decide a crucial aspect of the rate case — the “capacity charge” that AEP will assess competitors entering its territory. The level of the charge is decisive. Set too high, and it will discourage competition, resulting in higher prices for customers. AEP has proposed charging as much as $355 per megawatt day for three years. The current market-based capacity charge? Around $16.

The difference offers a glimpse at the height of the barrier the utility seeks. AEP encountered heavy turbulence at the start of the year when its initial rate plan produced whopping increases in many monthly bills — churches, school districts and small businesses especially hard hit. Under pressure, the PUCO withdrew its approval and told the utility to start over on a rate plan.

AEP has massaged the proposal, yet the essence remains. The utility wants to put off FirstEnergy and other competitors in its territory (while it competes elsewhere), hold customers hostage and generate the revenue it deems sufficient.

Unfortunately, the PUCO has appeared most sympathetic to the story AEP has been telling. What commission members must do is take into account the whole record in weighing whether to give the utility what amounts to a bailout.

The Ohio Manufacturers Association has been most critical of the utility’s new proposal, arguing that the issue is not merely about electricity rates but involves economic development. The association noted an Ohio Supreme Court ruling last year that from 2009 to 2011, AEP collected more than $500 million in excess charges. In 2009, Columbus Southern Power, a part of AEP, exceeded the excess earnings threshold. It was ordered to return $43 million to customers.

Consider the conclusion of the PUCO staff: “AEP Ohio is attempting to confuse the commission into believing it is the one that will suffer significant financial harm if its excessive demand is not granted. In reality, retail competition and customer choice will be harmed. … ” Add to the opposition hospitals, schools districts and other businesses, all finding the AEP request unreasonable.

The utility may be facing expectations on Wall Street. What the commission must bear in mind is the altered landscape for power companies in the state, the transition to deregulated markets long in process, even AEP making adjustments. Today, when market prices favor customers, the market prevails. Bow to what AEP wants, and customers will be the victims.

26-Jun-12 OCC Disputes FirstEnergy Plan, Citing Potential Bill Increases  Over concerns that a proposed electric security plan (ESP) would create high-end electric bill increases, the Office of the Ohio Consumers' Counsel (OCC) filed legal briefs Monday asking the Public Utilities Commission of Ohio (PUCO) to reject FirstEnergy's plan.

An ESP is the plan that details the supply and pricing rates for electric generation services. FirstEnergy's current ESP is in effect until May 2014. According to the PUCO's website, the generation prices under FirstEnergy's proposed ESP would "continue to be set by the competitive bidding process, but the bids scheduled to occur in October 2012 and January

2013 will be for a three-year period, rather than a one-year period."

The site lists other details of the proposal:

-FirstEnergy will commit $2 million to support economic development and job retention activities within its service territories.

- Auto manufacturing facilities that used more than 45 million kilowatt hours (kWh) of electricity annually, at a single site, in 2009 will be eligible to receive discounted rates on additional kWh usage.

- FirstEnergy will establish a fuel fund of $4 million in each calendar year in 2015 and 2016 that will assist low-income customers in paying their bills. FirstEnergy will also provide a fuel fund of $500,000 for Ohio Partners for Affordable Energy each calendar year in 2015 and 2016, also for low-income customers.

- FirstEnergy will receive cost recovery for deployment of its smart grid program. All costs associated with the project will be recovered over a 10-year period.

- FirstEnergy will meet its renewable energy resource requirements during the term of the ESP by obtaining renewable energy credits (RECs) through a request for proposal process, with a specific requirement for solar RECs through four 10-year contracts.

- The Delivery Capital Recovery Rider (DCR) will continue to be in place as a mechanism to encourage investment in the delivery system in order to enhance service reliability in lieu of a distribution rate case. 

While FirstEnergy's plan is described as a proposed extension of the existing ESP with PUCO that was approved in August 2010, the OCC contends that the utility is seeking authorization to collect hundreds of millions of additional dollars from customers.

The OCC was joined by the Northeast Ohio Public Energy Council, representing 172 local communities in ten counties in Northeast Ohio, and the Northwest Ohio Aggregation Coalition, representing 11 local communities including Toledo and Lucas County. 

The groups argue that FirstEnergy's proposal, filed April 13, does not qualify for approval under state law.

The OCC said in its briefs Monday that FirstEnergy customers would see a range of high percentage increases in their electric bills. According to the OCC, that increase could be anywhere from 4 percent to 30 percent for Cleveland Electric Illuminating; 4 percent to 26 percent for Toledo Edison; and 4 percent to 27 percent for Ohio Edison."I am concerned about the impact of FirstEnergy's rate proposal on Ohio consumers, and particularly concerned about the adverse impact on customers with all-electric service," consumers' Counsel Bruce J. Weston said in a statement. "In the legal briefs filed today, the consumer groups are recommending that FirstEnergy's proposal, to collect up to $405 million in new distribution costs from customers, be denied."

The plan, if approved, will set generation and distribution rates for consumers of the three FirstEnergy Ohio utilities from June 2014 to May 2016.

In May the OCC also filed to intervene in AEP Ohio's ESP case before the PUCO. In that case the OCC submitted testimony that calls for changes to two proposals; the "Rate Stability Rider" and "Phase-In Recovery Rider."

According to the OCC, the Rate Stability Rider is a charge on customers to account for any money lost from consumers who switch to other providers, and the Phase-In Recovery Rider proposes that AEP defer collection of certain fuel costs for one year. The consumer group said that deferred collection would increase interest-related costs. 

The PUCO continues to hold hearings for AEP's proposed ESP.

15-Jun-12 Small Businesses Push for Municipal Tax Uniformity  Small business representatives made a strong case to the House Ways & Means Committee that Ohio must establish a uniform municipal tax code to minimize burdensome administrative and record-keeping duties on businesses. Speaking on behalf of the Ohio Chamber’s small business affiliate, Tia Ramlow said adhering to the ever-changing tax rules and regulations of multiple cities is a huge potential liability and significant cost. She urged the committee to adopt a uniform set of rules with which small businesses can easily understand and comply.

Ms. Ramlow is the president of Great Works Employment Services, which has been in business in Akron for 20 years. Great Works on average sends over 400 field employees out to work weekly at 75 different client locations, with those clients being located in over 35 different cities or municipalities.

She led off testimony from an array of business groups by explaining that her payroll department must stay compliant and up-to-date with the income tax percentage each of the 35 cities requires. Great Works then must withhold and remit the proper amount of taxes to each work city, with a separate tax return on the different forms of each city. In addition, Great Works often may have to withhold for an employee’s tax liability to his/her residential city, particularly if the residential city does not give 100% credit for the amount of tax paid to the work city.

Ms. Ramlow also testified, “In addition to the complexities regarding income tax withholding, my company then has to file a year-end reconciliation with every city in which we had income since revenue was generated there. More often than not, the remittance is $1-10 but my CPA has to generate a tax form for every city– thus driving up my CPA bill.” Ms. Ramlow’s testimony demonstrates why small businesses across the state are greatly concerned about the overall cost of municipal income tax compliance and believe a uniform system of municipal taxation, including business profits and employee withholding rules, should be applied to all Ohio cities.

The Ohio Chamber expect legislation proposing a comprehensive municipal tax uniformity plan to be introduced in the House later this year. 

25-May-12 House Passes Reduced Statute of Limitations (SB224)  

The Ohio House of Representatives unanimously passed SB 224 May 24.  The bill will

shorten the period of limitations for actions upon a contract in writing from 15 to eight (8) years.  The 15 year statute was passed in 1803.

23-May-12 House Committee Recommends Reduced Statute of Limitations (SB224)  The Ohio House Judiciary Committee recommended SB224 for passage.  The bill will shorten the period of limitations for actions upon a contract in writing from 15 to eight (8) years.  The 15 year statute was passed in 1803.

21-May-12 Legislation Moving to Make EPA Less Threatening to Small Businesses  One of the many pieces of legislation that the General Assembly hopes to have wrapped up and on its way to the governor by the end of the month is Senate Bill 294, the Ohio EPA Omnibus Bill. This week, the House Agriculture and Natural Resources Committee sent the bill to the full House for consideration, where a vote is expected next week.

SB 294 contains a provision that expands confidentiality to small businesses seeking help in obtaining compliance with Ohio EPA’s regulations. Under current law, small businesses that voluntarily go to Ohio EPA’s Office of Compliance Assistance and Pollution Prevention (OCAPP) to ensure that they are being good environmental stewards and complying with regulations only have protection from liability for non-compliance for air issues. SB 294 extends the confidentiality provision to all regulatory programs at Ohio EPA.

In making this significant change, Ohio EPA is ensuring that small businesses can find help in navigating the myriad of environmental regulations. Small businesses will be able to rest easy when they utilize OCAPP knowing that this non-regulatory division of Ohio EPA has one goal, to help bring small businesses into compliance without the threat of a violation or penalty.

OCA thanks the bill’s sponsor, Sen. Tim Schaffer, for including this important protection in the legislation. 

14-May-12 Short Time Comp Bill Will Help Employers  The Ohio Chamber of Commerce this week testified in support of legislation that will help companies weather difficult economic times while also helping employees remain employed. House Bill 484 will create a Short-Time Compensation (STC) program that will allow employers, in lieu of full lay-offs, to reduce the hours of some employees on a temporary basis.

Employers will benefit from STC because they will be able to keep their skilled workers and not have to rehire and retrain new workers when economic conditions improve. Instead of being laid off, employees in turn will remain employed and be able to receive unemployment compensation for the hours of work that have been reduced. In addition, STC benefits both the local community and state as a whole since people will still be working and earning money for their families instead of collecting full unemployment.

Federal legislation, House Resolution 3630, will provide the money required to fully fund

the implementation and operation of a STC program in Ohio for three years. Under HB 484, employers wishing to utilize STC can submit a “shared work” plan to the director of Ohio’s Job and Family Services (ODJFS) for approval. However, the Chamber is concerned about a provision that will require an employer that has a collective bargaining unit to get the union’s written approval of the shared work plan before submitting it to ODJFS. This would be the first time that an Ohio statute would force an employer to obtain such union approval. Further, the federal legislation did not contain the union “sign off” requirement, and therefore the Chamber believes it is unnecessary.

14-May-12 Breach of Contract Suit Statute to be Reduced  Today, someone wishing to sue a business in Ohio for violating the terms of a written contract has 15 years from the alleged breach to do so. This long time period, or statute of limitations, makes Ohio uncompetitive among the states with only Kentucky having a comparable statute of limitations. Two bills are currently pending in the legislature that will reduce Ohio’s extended statute of limitations.

Lawsuits are decided more fairly and efficiently the more quickly they are tried. The ridiculously long 15-year statute of limitations puts Ohio businesses at a great disadvantage if they are sued. Reducing it will enable an employer to defend a lawsuit more effectively, since the involved personnel will have fresher memories and company records will be more easily accessible. It also means businesses will no longer be burdened with keeping all relevant records of written contracts going back as far as 15 years.

Enacted in 1803, Ohio’s current 15-year statute of limitations for written contracts is a byproduct of an era when communications took days or even weeks for a party to give notice of a breach of contract. Given today’s technological advances, Ohio’s antiquated law for written contracts is overdue for modernization. In fact, Ohio already has a six year statute of limitations for oral contracts. Changing the law for written contracts will standardize these two statutes and also bring Ohio in line with the other states.

House Bill 170 passed the House by an overwhelming margin and will reduce the current statute of limitations to six years. Senate Bill 224, which unanimously passed the Senate this week, will reduce it to eight years. 

08-May-12 Small Business & Others Push Back On AEP Rate Case  Businesses, schools, competitors and consumers generated a wave of opposition to American Electric Power Ohio’s latest rate plan.

Many of the witnesses testifying at a public hearing asked the Public Utilities Commission of Ohio to reject AEP’s proposed rate plan, which would hike rates by an average 5% rate across all customer classes starting in June, with smaller additional increases in 2013 and 2014. 

AEP says the rate plan would mitigate rate increases that were authorized in the original electric security plan (ESP) and ensure a fast and orderly transition to the competitive market, while offering investors some measure of financial stability.  Certain charges that AEP’s competitors pay would gradually decrease each year until that

transition, which would occur more quickly than a market rate option, according to the utility. Proposed capacity costs, which are charged to competitive retail providers to use AEP’s lines to sell electricity to their customers, are higher than the current market rate, but the company says it’s still a discount from its own costs.

The PUCO recently pushed back proceedings on the electric security plan (ESP) as hearings in a related case on the utility’s proposed capacity charge were extended. An evidentiary hearing is now scheduled to begin May 14 and oral arguments are set for July 3. In their written testimony, many of the intervening parties said the revised ESP was not much of an improvement over the one the PUCO rescinded earlier this year after small businesses, churches and local governments complained of rate shock. While the PUCO cited a lack of information about rate increases when it withdrew approval of the original ESP, there is no lack of engagement this time, which dozens of witnesses offering perspective on the rate plan and most of it is critical. Roger Geiger, executive director of the National Federation of Independent Business-Ohio urged the commission to take a free market approach and asked that any rate increase the PUCO deemed necessary be spread equally among residential, commercial and industrial ratepayers. “Clearly, small business owners cannot be the sole group asked to bear the burden of any rate increase without serious and detrimental effects on job creation and retention within the AEP-Ohio service territory,” he said. Mr. Geiger said his intervention in the rate case and the related capacity charge proceedings was the first time NFIB ever became party to a case before the PUCO. “Our unprecedented involvement in these two cases emphasizes the importance of the Commission’s decision to Ohio’s job creators and every individual they employ. It is exactly why we are asking that the Commission allow free market forces to work, and ensure that AEP-Ohio’s rates be set at a competitive level in the electric service market for small commercial users and business owners.” Testifying on behalf of the Buckeye Association of School Administrators, the Ohio Association of School Business Officials, the Ohio School Boards Association, and the Ohio School Council, energy consultant Mark Frye spoke in opposition to AEP’s proposal, which he said would allow the company to collect $929 million a year through May 2015. The proposed retail stability rider (RSR) “is a thinly disguised, impermissible and unreasonable generation transition charge and should not be adopted,” he said. He also criticized AEP’s plan to create a two-tiered capacity charge for the first set of customers who switch to a competitor as “discriminatory.” “However, if the Commission were to adopt these charges, it should consider special rate treatment for Ohio’s schools,” Mr. Frye said, noting that school districts’ budget cuts during the 2012-2013 biennium total about $2.8 billion in state and federal funds. “Approval of the RSR, coupled with drastically increased capacity charges will only add to the Schools’ financial distress caused by the lack of traditional revenue sources, likely leading to funding

cuts affecting the levels of teachers, staff, materials and programs.” Ohio Consumers’ Counsel Bruce Weston also urged the PUCO to reject the $284 million RSR, which would give the utility with a guaranteed revenue stream to offset the money it could lose from customers who shop. All customers, whether they shop or not, would pay the RSR and AEP wants to charge residential customers the largest portion of the cost, even though they are shopping the least, he said, noting that only 8% of residential customers have chosen a competitive supplier.

OCC also asked commissioners to mitigate the proposed phase-in recovery rider, which is designed to allow AEP to recover deferred fuel costs that exceeded the cost cap in the 2009-2011 ESP. The utility has proposed delaying collection by another year, which would further increase interest-related costs to the detriment of customers, according to the OCC. “The PUCO acted to protect Ohio consumers when it rejected the original settlement of this case,” Mr. Weston said in a statement. “At that time the PUCO emphasized its need for information in the ratemaking process, and today OCC is submitting testimony with our concerns about the impact of AEP’s rate proposal on Ohioans’ electricity bills.” Tony Banks, vice president of competitive market policies for FirstEnergy Solutions Corp. urged commissioners to reject the ESP because it would limit competition and offers “even fewer purported benefits than AEP Ohio’s previous ESP Stipulation, which was ultimately rejected by the Commission.” Moreover, the ESP would cost customers hundreds of millions of dollars to more than a billion dollars more than a market rate offer (MRO), he said. “Competition is the best way to promote lower generation prices for customers, to promote greater productivity and efficiencies from the numerous existing generating plants, to reduce the risk imposed on customers, and to provide the appropriate market signals regarding the need for new generation,” he said. Testifying on behalf of Industrial Energy Users-Ohio, J. Edward Hess said AEP’s proposed charges on competitive suppliers were illegal.

The capacity charge, the retail service rider, and a “pool termination provision” would allow AEP to receive additional generation service-related transition revenue well beyond the time when such recovery from customers was addressed and resolved by PUCO cases associated with electric restructuring legislation passed in the 1990s, (SB3, 123rd General Assembly), he said.

Ohio Hospital Association Senior Vice President R. Reed Fraley expressed concern that the modified plan could impose rate increases on hospitals of 10.5-11% through the end of 2014. “The point I want to leave the Commission with through my testimony is that given the current financial realities faced by hospitals, the consequences of the increasing costs of that electric service is going to be felt by decreases in the level or scope of services that hospitals are able to deliver to the citizens of Ohio,” he said.

 Testifying on behalf the OMA Energy Group, Bradley Belden of Belden Brick Company, LLC, said the proposed rate increase would strain the company’s ability to invest in new capital project, worker training, hiring new employees, and keeping existing employees. “Belden Brick produces in other states and the increased costs on our operations in Ohio that the AEP-Ohio plan represents could influence decisions to make future investments out of the state,” he said.

07-May-12 SB 224 (Statute of Limitations on Contracts) Slated for Tuesday Vote  Action Requested

The Ohio Senate Judiciary Committee is placing SB 224, introduced by Sen. Larry Obhof, on the calendar for a vote on Tuesday. The passage of SB 224 will fix an outdated Ohio law and in so doing will alleviate a significant burden on both Ohio businesses and courts. As introduced, SB 224 would reduce the statute of limitations on contracts from 15-years to 6-years.

The bill is expected to be on the Senate floor the following day (Wednesday, May 9).

Ohio is one of only two states (along with Kentucky) that allow fifteen years to bring a lawsuit on a written contract. Forty other states have a statute of limitations on contracts of 6-years or less.

Unfortunately the Senate will amend the bill to provide an 8-year statute of limitations on contracts in Ohio. It is our understanding that this change is being made in response to concerns raised by debt collection entities and trial lawyers.

Nonetheless, cutting the number almost in half is a great step.  

Now is the time to contact your state senator asking for a favorable vote on SB 224. Go to find your Senator and send him a message:  

http://www.ohiosenate.gov/

03-May-12 BWC Announces Extension of Deadlines  Destination: Excellence is a new Bureau of Workers’ Compensation (BWC) program package designed to help protect your workers and your organization’s bottom line by focusing on safety, accident prevention and return-to-work opportunities to bring injured workers back to work sooner.  The BWC has recently extended the deadline to enroll in the Transitional Work Bonus Program and the Industry Specific Safety Program to May 25, 2012. We encourage our members to visit the Destination: Excellence page on the BWC website at www.ohiobwc.com to learn more about these cost control options.

30-Apr-12 BWC Proposal Keeps Private Employer Average Base Premium Rate at Same Level  The Ohio Bureau of Workers' Compensation (BWC) presented a plan to the Board of Directors Friday to hold next year's statewide average base premium rate for private employers paying into Ohio's workers' compensation system at the current level. If approved

by the BWC Board of Directors at the May meeting, the plan would extend the $65 million in rate cuts enacted last year for Ohio's private sector employers. The Board's Actuarial Committee heard the proposal on private employer rates for the 2013 policy year, which runs July 1, 2012 - June 30, 2013, during its meeting on Thursday. BWC is proposing to maintain the statewide average rate at the current level, therefore maintaining last year's 4 percent average rate reduction over the 2011 rates for private employers. Each employer's actual premiums incorporate overall claims cost trends within their specific industry and job classifications, as well as their own individual performance. "This proposal is consistent with BWC's goal of maintaining reasonable and stable rates, allowing businesses to better predict workers' comp costs so they can focus on injury prevention and return-to-work," said BWC Administrator/CEO Steve Buehrer. "Stable rates, combined with more options to better control costs and improve return-to-work rates will increase the chances of positive outcomes for injured workers and save money for employers." He went on to note that employers can realize additional savings and improve outcomes for injured workers by participating in the Transitional Work Bonus and Industry Specific Safety Programs, both options created as part of the Destination: Excellence rating plan. The Industry Specific Safety Program helps employers improve workplace safety by focusing on the risks associated with specific industry types and developing strategies to prevent injuries. The Transitional Work Bonus Program can reduce premiums for employers that create and utilize a plan to return injured workers back to the workplace in a safe, timely manner. The deadline to apply for both programs has been extended to May 25. Additional information and applications are available at ohiobwc.com.

30-Apr-12 Labor Squeals and Workers Comp Bills Put on Hold  Just as quickly as three workers’ compensation reform bills were introduced, they were put on hold due to opposition from labor and plaintiff lawyers. Generating the most opposition is House Bill 517, which would expedite medical treatment for injured workers so they could return to work faster. Despite the help HB 517 would provide injured workers, the bill has been derided by labor and the plaintiff lawyers as “an attack on workers”.

The contentious issue in HB 517 deals with the injured worker’s choice of physician. The bill would allow an injured worker to see a physician of his/her choosing for 45 days after injury. If the injured worker has not returned to work after 45 days, however, a managed care organization (MCO) could manage the injured worker’s care by directing him/her to one of the MCO’s network providers. This would not only ensure injured workers get the right treatment so they can return to work faster, but also reduce cost to the workers’ comp system.

In addition, the AFL-CIO and the Ohio Association of Justice (OAJ) complain that the Bureau of Workers’ Compensation (BWC) did not meet with them prior to the reforms being introduced. However, BWC Administrator Steve Buehrer has refuted this notion, saying that, “[W]ithin my first 90 days at BWC, I asked the head of the largest state labor association, to enter a discussion about improvements to the system...These invitations have

been refused to this point.”

Administrator Buehrer further stated that he and two BWC Directors representing labor met with the head of the Ohio AFL-CIO about these proposals and left the door open for further discussions on how to improve the system for injured workers. Up to now, however, labor has failed to offer the administrator any such ideas or proposals.

While the three bills – HB 516, 517, and 518 – are important, they do not constitute major reforms. Labor has nonetheless threatened to seek to repeal them by referendum if passed. As a result, legislation designed to assist injured workers to get medical treatment faster and return to work as soon as possible is in limbo while the House Republican leadership and the administration wait for constructive solutions from labor and the plaintiff lawyers. 

23-Apr-12 Three Workers' Compensation Bills on Fast Track  According to the testimony of  Bureau of Workers’ Compensation (BWC) Administrator, Steve Buehrer, the number of injured workers returning to work has dropped over the last four years.  This week he told the House Insurance Subcommittee on Workers’ Compensation on House Bill 516, HB 517 and HB 518 that "after thirty days, if an injured worker has not returned to work, their chance of ever returning to work declines dramatically." The three bills comprise a legislative package that will assist injured workers to return to work faster, allowing employers to better manage their workers’ comp costs.

Research shows that an injured worker who is off the job for more than 45 days has an increased likelihood of not returning to work for an extended period of time. The longer an injured worker is off work, the more the employer’s workers’ comp costs increase. Therefore, it is imperative that injured workers receive the necessary medical care immediately after an injury.

To expedite care for injured workers, the legislation will permit the BWC to pay for certain medical services for 45 days after the claim is allowed. If the claim is later disallowed, the surplus fund will be charged and not the claimant’s employer. If, however, the claimant has not returned to work on the 46th day, the legislation will allow a managed care organization to direct the injured worker to see a medical provider in its network. The worker can still see a provider of his or her choice out of the network but will be liable for the appropriate out-of- plan copayment.

Another source of increased costs for employers is when injured workers, without good cause, refuse to attend scheduled medical exams or cooperate with treatment prescribed by a doctor. The legislation addresses this source of employer frustration and incentivizes return to work by making claimants more responsible for their care. A claimant, who, without good cause, rejects or unreasonably delays ordered medical treatment, or who declines to attend medical exams or to release medical records, will forfeit the right to compensation during the refusal period.

House Republicans have proposed a fast track for passing all three bills and have indicated they may be before the full House for votes sometime in the first week of May. 

17-Apr-12 House Republican Releases Tax Committee Report  The chairman of an ad hoc House panel on Ohio’s tax system issued a report Friday calling for more regular reviews of tax breaks and proposing changes to sales and business taxes. Rep. John Adams (R-Sidney), the House majority whip and chairman of the Tax Structure Study Committee, announced the release of a  "Chairman's Report" based on input the panel received from business interests and other stakeholders. The House GOP’s announcement said the report could serve as “a springboard for legislative initiatives.” “During this General Assembly, we have focused on creating an economy where businesses can thrive and Ohioans can compete for jobs right here within our borders,” Rep. Adams said in the release. “Creating economic prosperity starts with a tax structure that is conducive to business growth and job creation. The people of Ohio made their voices heard when we came to their areas of the state and helped us to put together this report of recommendations, which may serve as the genesis of future legislation.” Among the reports recommendations:·       Tax expenditures should be reviewed every two years “for validity” by a standing subcommittee of the House Ways & Means Committee.

·       Ohio’s sales tax should be applied to all economic activities including goods and services.

·       The Commercial Activity Tax “should be modified to establish a tax liability of the lesser of two calculations: a tax on gross receipts, as established by the current CAT law, or a tax on net income.” Mr. Adams said the change would reduce discrepancies arising from “pyramiding” effects of CAT liability depending on industry type.

·       A “continuing, open dialogue on tax issues” should be pursued. The Tax Structure Committee met six times last summer and fielded testimony from more than 80 witnesses, according to House Republicans. “This has been a productive process and I look forward to further discussing these findings with the legislature,” Rep. Adams said. 

10-Apr-12 BWC Reminds Employers of April 30 Deadline to Sign Up for New Rating Program  Ohio employers interested in protecting their workers and their bottom line have until the end of the month to take advantage of Ohio Bureau of Workers' Compensation's (BWC) new rating plan, Destination: Excellence. The program is designed to help Ohio employers focus on safety, accident prevention and return-to-work opportunities to bring injured workers back to work sooner, BWC said in a release.

"This plan not only offers opportunity for Ohio employers to save on their premium, it

supports BWC's top priority of preventing injuries and getting injured workers healthy and back to work sooner," said BWC Administrator/CEO Steve Buehrer. "It also offers employers more choice and rewards them for embracing effective return-to-work tactics such as transitional work plans and vocational rehabilitation."

Destination: Excellence offers a package of new and existing BWC programs that allow employers to customize a risk management plan that suits their business needs. The programs address workplace safety and stresses transitional work and vocational rehabilitation programs while providing opportunities to reduce premiums through adoption of best practices and meeting certain performance requirements. Additional savings are also possible for effective policy maintenance such as doing business online and keeping current on premiums.

The deadline to apply for several components of the program is Monday, April 30, and the effective date is Sunday, July 1.  Employers can visit ohiobwc.com or send an email to Excellence.Destination@bwc.state.oh.us with questions to learn more.

09-Apr-12 Free Small Business Seminar Series  

The Ohio Department of Development (ODOD) will offer a series of seminars for small business owners from April through September. Designed to strengthen and expand small business ownership across the state, the free seminars are sponsored by the ODOD’s Office of Business Assistance, the Small Business Development Centers (SBDC) of Ohio, and the U.S. Small Business Administration (U.S. SBA).  

"This series of seminars provide Ohio’s small business owners and entrepreneurs with the information they need to create, sustain and grow their businesses," ODOD Director Christiane Schmenk said in a statement. “The strength of Ohio’s entrepreneurial and small business community is essential to the overall health of Ohio’s economy. At development, we are committed to providing these business owners with the resources they need to succeed.” 

The seminars were developed specifically to address the needs of aspiring entrepreneurs. Representatives from the SBDC of Ohio and the U.S. SBA will give in-depth overviews of programs and services available to assist business owners. The seminars will provide information on establishing a business, operating a business, loan programs, marketing, and procurement opportunities. The SBDC of Ohio provides consulting and training assistance to small businesses and emerging entrepreneurs to promote growth, expansion, innovation, increased productivity, and improved management. The SBDC of Ohio are supported through a partnership among the ODOD, the U.S. SBA, and several chambers of commerce, colleges and universities, and economic development agencies. 

All Small Business Development Series seminars run from 9 a.m. to 12 p.m. at the locations listed below in the following cities: Cincinnati, Columbus, Dayton and Mansfield/Shelby. The seminars are free, but registration is required. Business owners interested in the seminar series can learn more or register by contacting the Columbus Small Business Administration office at 614-469-6860 ext. 282. 

Cincinnati - Union Institute and University 440 W. McMillan St., 45206

Date                                  Program Title/SubjectWednesday, April 25       The Resource Network (Small Business Resource Partners)Wednesday, May 23       Starting Right and Beyond (Legal, Accounting, Insurance)Wednesday, June 27       Access to Capital (Building Banking Relationships)Wednesday, July 25        Credit Report/Credit Score (How to Improve/Better Money Management)Wednesday, Aug. 22       Small Business Marketing (Media and E-Commerce)Wednesday, Sept. 26      Small Business Procurement (Opportunities and Certifications)

Columbus - Columbus Urban League, 788 Mt. Vernon Ave., 43203

Date                                  Program Title/SubjectThursday, April 19          The Resource Network (Small Business Resource Partners)Thursday, May  17         Starting Right and Beyond (Legal, Accounting, Insurance)Thursday, June 21          Access to Capital (Building Banking Relationships)Thursday, July  19          Credit Report/Credit Score (How to Improve/Better Money Management)Thursday, Aug. 16          Small Business Marketing (Media and E-Commerce)Thursday, Sept. 20         Small Business Procurement (Opportunities and Certifications)

Dayton - The Entrepreneurs Center, 714 Monument Ave., Suite 116, 45402

Date                                  Program Title/SubjectTuesday, April  17          The Resource Network (Small Business Resource Partners)Tuesday, May  15          Starting Right and Beyond (Legal, Accounting, Insurance)Tuesday, June  19          Access to Capital (Building Banking Relationships)Tuesday, July  17          Credit Report/Credit Score (How to Improve/Better Money Management)Tuesday, Aug.  21          Small Business Marketing (Media and E-Commerce)Tuesday, Sept. 18          Small Business Procurement (Opportunities and Certifications)

Mansfield - James W. Kehoe Center for Advanced Learning, 175 Mansfield Ave., Shelby, OH 44875

Date                                  Program Title/SubjectWednesday, April 4        The Resource Network (Small Business Resource Partners)Wednesday, May 2        Starting Right and Beyond (Legal, Accounting, Insurance)Wednesday, June 6       Access to Capital (Building Banking Relationships)Wednesday, July 11       Credit Report/Credit Score (How to Improve/Better Money Management)Wednesday, Aug. 1       Small Business Marketing (Media and E-Commerce)Wednesday, Sept. 5      Small Business Procurement (Opportunities and Certifications)

09-Apr-12 Gov. Kasich Signs "Right to Cure" Bill  Governor Kasich has signed legislation that will provide a useful new tool for quickly resolving Consumer Sales Practices Act (CSPA) cases for businesses. House Bill 275 will give businesses the opportunity to offer a reasonable settlement, known as a “right to cure”, to a person who has filed a lawsuit alleging a violation of the CSPA. The new law will also encourage the suing party to accept that offer.

Sponsored by Rep. Ron Young and former Rep. Lynn Slaby, HB 275 was strongly supported by Ohio's business community. Under the new law, the company’s cure offer to the allegedly aggrieved consumer must be financial compensation and an additional offer to pay the consumer’s attorney fees, up to $2,500. If the consumer accepts the cure offer, the case is settled. If the consumer does not accept the cure offer, proceeds with litigation and is awarded damages more than the cure offer, then the new law would not restrict the consumer’s ability to receive possible triple damages and attorney fees.

If the consumer does not accept, proceeds with litigation and is awarded damages less than the cure offer, then the company will not be liable for the consumer’s court costs and attorney fees after the date he or she received the cure offer. The company will also not be liable for triple damages under the CSPA.

Businesses will need to make a practical evaluation of their settlement proposal, which will mean a realistic consideration of what a plaintiff may be awarded by a court. HB 275 will also incentivize plaintiffs’ attorneys to more realistically value their cases.

The new law is expected to become effective sometime in the first week of July. 

03-Apr-12 PUCO Publishes Schedule for Considering New AEP Rates  The Public Utilities Commission of Ohio set out a schedule for considering evidence and testimony on a replacement rate schedule for AEP Ohio, whose earlier rate plan was revoked following a deluge of outcry over sharp rate hikes from dry cleaners and other small businesses, churches, schools and other groups. A decision is planned for summer.

The process will begin in a week with an April 9 technical conference "to help customers and stakeholders better understand AEP Ohio's application." It will begin at 10 a.m. at the PUCO's Columbus offices, 180 E. Broad St., and be webcast live at http://www.puco.ohio.gov/

AEP Ohio is now operating under a revised version of previous rates while it and the commission develop a new Electric Security Plan to replace the one revoked Feb. 23. 

Other hearings, conferences and deadlines for the case are as follows.:

- April 20: Motions to intervene due.- April 27: Testimony due from AEP-Ohio.- May 4: Discovery requests due.

- May 4: Testimony due from intervenors and PUCO staff.- May 7: A procedural conference will begin at 10 a.m. at the PUCO offices, Hearing Room 11-A.- May 14: An evidentiary hearing will begin at 10 a.m. at the PUCO offices, Hearing Room 11-A.- July 3: Oral arguments will be held before the commission at the PUCO offices, 11th floor.

Additional local public hearings where AEP customers can testify will be scheduled later.

AEP's modified ESP application is available by searching case 11-346-EL-SSO at the PUCO's Docketing Information System website at http://dis.puc.state.oh.us

29-Mar-12 House Approves Senate Right to Cure Amendments  A split Ohio House Tuesday approved Senate changes to "Right to Cure" legislation. Democrats voted against accepting Senate amendments on HB275 (Young-Slaby), arguing again that the bill weakens the state's Consumer Sales Practices Act. Rep. Dennis Murray (D-Sandusky) said he believes the legislation continues the trend of siding with the wealthy at the expense of the poor, while Rep. Matt Lundy (D-Elyria) called the bill the "right to cheat bill." Rep. Ron Young (R-Leroy), a primary co-sponsor of the bill, pointed out that the top enforcer of the Consumer Sales Practices Act, Attorney General Mike DeWine, is in favor of legislation. He said the bill is "fair and reasonable" and allows the consumer to talk with a supplier about a cure offer, whereas the current system draws cases out for an expandedperiod of time.

22-Mar-12 Split Senate OKs Right To Cure Measure (HB275)  A divided Senate voted Wednesday to back legislation that supporters said would create an expedited way to settle claims made under the Ohio Consumer Sales Practice Act.  The bill (HB275) gives those sued under the law an opportunity to propose a settlement offer, or “right to cure,” that plaintiffs could accept, Sen. William Coley (R-Middletown) said. He said settlement offers would have to include a remedy, and offer up to $2,500 in attorney fees and court costs. If accepted, the offers would bring an end to the case. If plaintiffs decline the offer, the case would proceed to trial. If plaintiffs win a finding, but are awarded less than the settlement offer, they would not receive treble damages typically tied to CSPA claims, he said. Sen. Edna Brown (D-Toledo) said the bill would make Ohio’s CSPA one of the country’s least effective consumer protection laws.

She said the bill undermines that law’s fundamentals, saying the removal of the potential to pay treble damages eliminates businesses’ incentive to avoid providing shoddy goods and services. Sen. Brown added that responsible businesses already have a right to cure by acting in good faith when dealing with customers. Sen. Joe Schiavoni (D-Canfield) said the clear purpose of the legislation was to give the business community an advantage in the court system. “There was no problem in the first place,” he said.

 Sen. Kevin Baron (R-Columbus) said there is an “honest disagreement” between members about the impact of the legislation. He said the measure encourages companies to make reasonable offers because they would minimize the risk that businesses face in paying treble damages. “The lower you offer, the greater risk you have.” It passed on a 23-10 vote.

21-Mar-12 Right To Cure Bill Approved by Senate Committee  The Senate Commerce and Labor Committee recommended for passage HB 275 which would allow suppliers and consumers to enter into a Right to Cure agreement thus removing the need for costly litigation. Two amendments offered by Chairman Bacon were accepted. An amendment offered by Sen. Schiavoni was tabled. Bacon explained that his first amendment would clarify limitations on a judge, jury or arbitrator award that is notgreater than a cure offer. He said his second would ensure payment of documented consumer's attorney's fees, upto $2,500, following acceptance of a cure offer.

20-Mar-12 Moody's Upgrades Ohio's Economic Outlook  

Moody's Investors Service announced Friday that it has boosted Ohio's credit outlook from negative to stable, joining other credit agencies in doing so.

In addition, Moody's said it has assigned an Aa1 rating to $430 million in General Obligation Bonds, and affirmed the ratings on the state's outstanding general obligation bonds. 

The credit agency said the move reflects "a record of strong financial management proven through generally proactive responses to budget shortfalls, recent revenue growth and improved financial position, and the expectation that excess revenues will continue to be used to rebuild reserves in the near term. The state's satisfactory financial position is also demonstrated by the expected return to structural balance in fiscal 2013, and maintenance of strong liquidity. The Aa1 rating also incorporates a transitioning economy that remains somewhat vulnerable to disruption but has shown recent stabilization due to growth in manufacturing and service sectors."

Going against the state, Moody's said the state's low reserve position leaves in vulnerable to any renewed economic or revenue disruption; any budget surpluses "will likely be relatively small, resulting in a protracted period to rebuild reserves"; the economy remains vulnerable to high gas prices and external disruptions, "given manufacturing industry exposure"; and a "lack of certain best financial management practices." 

Credit agency Standard & Poor's made a similar move last summer, boosting the rating to "stable." 

Gov. John Kasich said he received the news Friday morning. Kasich said he, along with Budget Director Tim Keen, and representatives of JobsOhio, have been communicating the depth of Ohio's recovery to Moody's. 

"I think the ability to show them that Ohio is not a one-trick pony matters. You know, there's a sense on Wall Street, or wherever, that Ohio is just manufacturing -- cars, autos. And autos are important to us, but it's not just autos that work in Ohio. I think being able to explain the diversity of business is helpful here," the governor told reporters Friday.

Kasich later released a statement saying, “Moody’s decision to upgrade Ohio’s credit outlook is fantastic news and affirms that Ohio is getting back on track. Today’s announcement marks the first time since February 2007 that all three rating agencies -- Moody’s, Fitch, and S&P -- have given Ohio an AA+ rating with a stable outlook. Over the past year, we’ve eliminated an $8 billion budget shortfall and implemented policies that foster a jobs-friendly environment and manage taxpayer dollars in a responsible way. It’s great to know that these efforts to make Ohio’s economy stronger are getting noticed.”

16-Mar-12 Business Groups Line Up In Support Of EPA Reform Bill (SB294)  A diverse group of stakeholders backed an omnibus bill aimed at providing regulatory reforms for the Ohio Environmental Protection Agency, saying the proposal contains a number of common sense measures. Kara Allison, director of government and community relations for Hull & Associates Inc., said the measure creates “opportunities that dually encourage corporate environmental responsibility and economic investment.” “We believe that this common-sense approach to streamlining many of the state of Ohio’s environmental regulations will facilitate business expansion and retention in Ohio while continuing to be strongly protective of our environment,” she said. Last month, the bill, SB294, received sponsor testimony and the backing of EPA Director Scott Nally.  Provisions supported by the firm include allowing certain solid-waste landfills to temporarily store low-level radioactive waste in a manner aimed at continuing protection of public health, Ms. Allison said. Such materials may include a variety of things, including light bulbs, native soils and drill cuttings. Upon detection of potential low-level radioactive waste, landfill operators need flexibility for safe temporary storage until an alternative option is identified, she said. Ms. Allison also said the firm supports other provisions such as exempting coal combustion waste from solid waste management district generation fees; increasing the threshold for use of a state scrap tire fund; and construction and demolition debris fee changes.

While many provisions received support, lawmakers should clarify which wastes from secondary aluminum production would be prohibited from co-disposal at municipal solid waste landfills, she said. Frank Reed Jr., who spoke on behalf of the Ohio Hospital Association, said the bill would “greatly simplify existing statutes and eliminate duplicative and burdensome requirements” particularly related to labeling and transportation of certain medical waste.

“It will make it easier for all generators of medical and infectious waste to read, understand and follow the rules,” he said. “This bill eliminates 25 paragraphs of regulations as it relates to packaging and transportation. Anytime the General Assembly can eliminate superfluous regulation, all Ohioans should be thankful.” Instead, infectious waste transportation and packaging would fall under sole jurisdiction of existing federal regulations, Mr. Reed said. He told Sen. Capri Cafaro (D-Hubbard) he would look into how many states rely only on federal statute, adding that standards for packaging, labeling, handling and transportation are all covered under federal measures. Pam Starlin, environmental services manager at Fairfield Medical Center, said despite evolution in health care technologies, rules for management of medical waste have not kept pace. She told the committee six cents of every dollar in her $3.5 million department operations budget is spent on management and treatment of potentially infectious waste. Ms. Starlin said the health system is working to identify $7 million in cost savings for this year’s operating budget and methods of savings are limited. “In addition to manpower expense, the categories of supplies and waste management are truly the only areas that afford me opportunities,” she said. “Trust me, our community does not need any more folks who are unemployed, so that should indicate where my focus lies.”Kathy Trent, director of government affairs for Waste Management of Ohio and chairwoman of the Ohio Chapter of the National Solid Wastes Management Association, said she supports the legislation, which would beneficially affect the management of solid waste in the state.

Such measures in the bill include exempting coal combustion wastes from solid waste district generation fees, which was inadvertently left out of exclusions in the biennial budget, she said. In addition, Ms. Trent spoke in favor of changes to construction and demolition debris fees on asbestos and elimination of “consent to service” requirements for solid waste transport. According to her testimony, such elimination would remove requirements for related paperwork for people transporting solid waste from out of state to an Ohio facility.  Sen. Lou Gentile (D-Steubenville) said he does not want to advocate for additional regulatory burdens, but told Ms. Trent he wanted to make sure out-of-state waste was being taken seriously. The solid waste facilities keep detailed records on transporters and their loads, Ms. Trent said. The Ohio EPA or local health authorities are able to inspect the materials at any time, and the facilities provide annual reports to the state agency that include details about out-of-state waste.

Douglas Clark, president of the Ohio Water Environment Association, said the bill would improve operations of the EPA.

He said his organization supports language that makes operator exams more accessible;

encourages the agency to consider compliance history of applicants prior to taking action; creates criminal penalties for tampering with public water sources; and establishes an in lieu fee mitigation program for impacted wetlands.

Erv Ball, assistant director of the Cuyahoga County Board of Health, submitted a letter in support of the bill. He said it removes duplicative and “frankly, in some instances, unnecessary regulatory burdens shared both by the private sector as well as from the regulatory sector, especially with regard to infectious waste rules.” Materials management has changed significantly since the late 1980s, said Mr. Ball, a member of the state Solid Waste Advisory Council. The legislation provides greater clarity and support of the Resource Conservation and Recovery Act, as well as additional strength of the agency’s compliance and pollution prevention program. “Regardless of the current world fiscal climate, we believe such clarity better positions the agency and its partners to most effectively improve the health and safety of our environment without necessarily impeding growth and development within Ohio,” he said. Ohio Manufacturers’ Association Director of Public Policy Services Kevin Schmidt submitted written support to the bill sponsor Sen. Tim Schaffer (R-Lancaster). He said the bill would expand confidentiality protection, which is necessary for the agency’s Office of Compliance Assistance and Pollution Prevention to be successful in its mission. The provision would be a “meaningful improvement that will help businesses understand how they can become or remain compliant,” he said in the letter. Richard Lorenz of the Ohio Section of the American Water Works Association submitted written support for provisions in the bill, such as those allowing the EPA the option of having a third party administer drinking water operator exams and establishing criminal penalties for falsification of agency documents and tampering with a water supply. Ohio Petroleum Council Executive Director Terry Fleming also submitted written support for provisions to make underground storage tank sites with a responsible party eligible for cleanup through a voluntary program. The Ohio Environmental Service Industries submitted written testimony in favor of the bill as did the Ohio Petroleum Marketers and Convenience Store Association. In a written letter to EPA Director Nally, Allen Fore, director of public affairs for Kinder Morgan Energy Partners L.P., said the company appreciates efforts to streamline regulatory processes and supports improvements in “the climate for future investment in energy infrastructure projects.”

16-Mar-12 Tax Credits for Expanding Payroll into Vacant Facility (HB18)  The bill that provides a tax credit for expanding payroll into a vacant facility has been recommended for passage by the Senate Ways and Means Committee

14-Mar-12 Senate Committee Hears "Right to Cure" Bill (HB275)  Four witnesses testified in opposition to HB275 (which would enact a new process for settling customer grievances) during a March 13 hearing before the Senate Insurance,

Commerce and Labor Committee.  Rocco Yeargin, an attorney representing himself and a coalition that includes the Summit County Office of Consumer Affairs, the Miami Valley Housing Authority, AARP and Pro Seniors, among others; Nadine Ballard, a professor at Sinclair Community College where she teaches a consumer law class; Gregory Travalio, professor of law emeritus from the Moritz College of Law at Ohio State University; and Linda Cook of the Ohio Poverty Law Center. They all agreed with Yeargin's assessment that the bill is not needed, that Ohio's current Consumer Sales Practices Act (CSPA) strikes the right balance between consumers and suppliers/vendors; and the bill disrupts the balance by reducing the maximum damages. Yeargin said HB275 reduces the CSPA "to a list of moral recommendations." He noted that "the business community has already successfully insulated itself from legal accountability through the widespread use of mandatory arbitration clauses, jury waivers and similar waivers that are now standard in all consumer contracts." He emphasized the need the keep the penalty of "treble damages" plus liability for attorney fees if a supplier "lies, cheats or steals ...." He said the current CSPA encourages settlement as a rule. "The fully litigated case is the unusual exception." He added that "the so called 'right to cure' [in HB275] would permit any supplier to avoid real liability by simply paying economic damages or offering an additional repair attempt." He said this eliminates the supplier's incentive to adopt fair procedures, would render "the bona fide error defense meaningless"; "gives all suppliers the same token penalty regardless of whether the violation was the result of an honest mistake or whether it was intentional and malicious." Chairman Bacon asked Yeargin whether the proposal doesn't provide the same incentive for the supplier to make a fair offer -- that it could go to court and the supplier would be found liable for more. Sen. Faber asked about the possibility of a class action lawsuit with Yeargin saying there are no class action suits in consumer cases since arbitration. Faber also suggested the attorney general can enforce the law, with Yeargin saying they are understaffed. Ballard picked up on this last issue, telling the committee that the attorney general (AG) "filed only 29 lawsuits in 2011 to enforce this act." She also noted that the AG's office assisted with 50 investigations, resulting in three guilty pleas "but there is no mention of consumer restitution. In fact, neither the annual report nor attorney general press releases reveal how many consumers actually received restitution based on the criminal or civil enforcement of the law by the Ohio Attorney General." She said the CSPA instead relies on the "private attorney general" concept. "The fee shifting provisions of the current law is crucially necessary to empower consumers victimized by fraud to file a lawsuit essentially on behalf of all Ohio citizens when the consumer seeks injunctive relief to stop fraudulent practices." She also objected to what she called the bill's "failure to give the court sufficient discretion

to see that justice is served. "This legislation will not help victims obtain reasonable remedies, will do nothing to deter future misconduct, and will do nothing to enhance competition between businesses that play by the rules." Cook describe the impact of the bill on the state's poor families who have limited access to legal help if they have problems.

Travalio said he believes HB275 provides the wrong incentives, becoming "operative only after suit has been filed. It incentivizes businesses to wait until a lawsuit has been filed before engaging in good faith negotiations with consumers." He noted, in fact, West Virginia has "a provision with precisely the opposite provision -- a consumer cannot bring suit unless the consumer has informed the supplier of an alleged violation and provided the supplier the opportunity to make a cure offer." He also noted "there is no justification whatsoever ... for using only economic harm for judging the effectiveness of a cure offer," adding that the CSPA specifically allows up to $5,000 in non-economic damages for violations. He said the way the bill would work then is "if that cure offer is less than all of the damages found by a court, the consumer retains his or her right to recover treble damages and attorney fees."

He also told the committee the Consumer Protection Division has put together a task force to look at ways to improve the CSPA. "This is a deliberative process in which people with a wide array of experience and expertise are coming together to thoughtfully consider how this critical component of Ohio law can be improved. I do not think it is a good idea to proceed with a bill for which so many problems have been identified ... especially while this deliberative process is going on." 

08-Mar-12 PUCO Grants AEP Capacity Charge Request but Tweaks Interim Rates  The Public Utilities Commission of Ohio approved American Electric Power Ohio's request Wednesday to institute generation capacity charges the utility says are needed to help avert negative financial consequences as a result of the PUCO's decision to revoke a controversial rate agreement. The commission also approved interim rates to be charged to AEP customers while it works to develop a new Electric Security Plan (ESP) to replace the one it rescinded after small businesses, schools and other groups complained of sharp rate increases.  But the PUCO modified the interim rates that AEP had proposed, directing the utility to drop a phase-in recovery rider (PIRR) and revert to an unblended fuel adjustment clause (FAC) andtransmission cost recovery rider (TCRR). Those changes reflected objections by Industrial Energy Users-Ohio and Ormet Primary Aluminum Corp, who argued that the PIRR wasn't authorized under the old ESP that the PUCO ordered AEP to revert to. The two parties had objected to the use of a blended FAC and TCRR instead of separate FAC and TCRR charges for AEP subsidiaries Ohio Power and Columbus Southern Power.  

Those subsidiaries have been merged -- a move the PUCO approved Wednesday -- but they were separate companies under the old ESP under which AEP must temporarily operate. "My fellow commissioners and I anticipate a revised ESP application from AEP by the end of this month that will continue to move the utility towards the competitive market," PUCO Chairman Todd Snitchler said in a statement. "Once we receive AEP's filing, we will carefully weigh the interests of the utility and its customers as we work to complete the transition to a market-based rate structure in an expeditious manner. We believe full competition is in the best interest of Ohio's utilities, ratepayers, and the state as a whole." The temporary rates take effect Friday and will last until a new ESP is developed, while the capacity charge took effect immediately and will remain in place through May 31. The commission said it will have a hearing by April 17 to set long-term capacity charges. The capacity charges set up a two-tier capacity pricing system for AEP. According to the PUCO, suppliers will pay a market-priced capacity charge of $110 per megawatt day up to the first 21 percent of customers in each customer class. All government aggregations will receive unlimited tier-one market-priced capacity. The second-tier capacity pricing of $255per megawatt day will be applied beyond the first 21 percent of customers in each class. "The interim capacity charges approved today strike a fair balance between AEP and competing electric suppliers," Snitchler stated. "This short-term resolution provides a level playing field on which AEP's competitors can continue to vie for customers' business while we revisit the capacity charge issue and the electric security plan on a more permanent basis."

Commissioner Cheryl Roberto was the lone dissenter on the vote to approve capacity charges, saying the move accomplished "both less than and more than we should in terms of public policy." AEP President and CEO Nicholas Akins reacted to Wednesday's decisions with the following statement:

"Today's decision by the Public Utilities Commission of Ohio provides an appropriate short-term solution that fairly balances the interests of electric consumers with the need to protect the financial health of AEP Ohio. We recognize, however, that this is the first step in a longer process of addressing the transition to a fully competitive market that is structured equitably for all market participants and provides benefits for consumers. The transition must be done in a manner that doesn't unduly harm or unfairly enrich any individual utility or retail energy provider. We're committed to working to achieve a fairand transparent regulatory outcome in the months ahead that provides a reasonable transition to full competition while recognizing the commitments AEP has made on behalf of its customers."

07-Mar-12 Update on Electric Rates: AEP Will Amend its ESP Application  American Electric Power Ohio said Tuesday it will fill an amended version of its Electric Security Plan (ESP) application by month's end, rather than submit a new application to the Public Utilities Commission of Ohio in the process of developing a new rate structure after the commission rejected its previous one.

PUCO rescinded AEP Ohio's new rate plan two weeks ago following a mass outcry from small businesses, schools and other groups about sharp price spikes -- spikes commissioners said they'd not anticipated based on the information they'd gotten during the rate case. 

The PUCO action triggered a 30-day period for AEP to decide whether to change its ESP application or submit a new one entirely.

"AEP Ohio plans to filed a modified ESP by March 30 and will proposed leaving in place the current rate plan pending the outcome of the new ESP proposal," AEP Ohio President and CEO Joseph Hamrock said in a statement.

AEP has asked PUCO to set an expedited calendar for developing new rates, and also filed an emergency motion for the commission to reinstate the generation capacity charges from the rejected rate plan, saying failure to do so would be a major blow to AEP's finances. 

AEP on Tuesday also specifically called for quick action on its bid "to corporately separate and transfer its generation assets in Ohio."

"In order for us to transition to market as planned, we must corporately separate and transfer our generation assets," AEP President and CEO Nick Akins said in a statement. "The commission's denial of AEP Ohio's corporate separation, which it had previously approved, has much broader implications for the state of Ohio. A reasonable transition to fair competition in an environment of regulatory certainty is critically important to attract jobs and investment to Ohio."

Meanwhile, the PUCO is scheduled Wednesday to consider tariffs AEP filed to comply with the revocation of its rate plan and the temporary reversion to rates close to those charged in 2011.The tariffs already have drawn objections from two intervening parties, Industrial Energy Users-Ohio and Ormet Primary Aluminum Corp.

Industrial Energy Users-Ohio said in a filing that the tariffs do not truly reflect the terms and conditions of AEP's previous ESPs for subsidiaries Ohio Power and Columbus Southern Power, to which the PUCO ordered AEP to revert. The group specifically objected to AEP's calculation or inclusion of a fuel adjustment clause (FAC), transmission cost recover rider (TCRR) and phase-in recovery rider (PIRR).

"A substantial portion of [Ohio Power's] Feb. 28, 2012 compliance tariffs do no comply with the commission's entry on rehearing. OP has incorrectly presented the commission with a blended FAC rate, a blended TCRR rate, a PIRR which has not been authorized and which is calculated with new and incorrect methodologies, no documentation regarding the appropriate reversion to the RPM price as the state compensation mechanism, and incorrect terms and conditions of service," the group's filing states.

Ormet also objected to the inclusion of the PIRR.

The Office of Ohio Consumers' Counsel (OCC) also objected to AEP filings. OCC said the PIRR represents "costs that were deferred years ago for later collection from customers. AEP was to seek approval before actually collecting the deferred costs from customers. AEP

has not been given approval to date, but nevertheless included the charge in its revised rates."

OCC also objected to AEP's request for increased generation capacity charges, saying the utility's recent financial history undercuts its argument that failure to increase the charges will cause it significant. OCC notes that Columbus Southern Power surpassed the "significantly excessive earnings threshold" of 17.6 percent set by the PUCO in 2009.

"Earning also could surpass the PUCO's threshold for excess earnings for 2010 and 2011," the consumers' counsel said in a statement. 

02-Mar-12 2012 Ohio Safety Congress & Expo  March 27-29Greater Columbus Convention Center

Well at home. Safe at work. That’s what BWC wants for every business and worker in Ohio. The 2012 Ohio Safety Congress & Expo (OSC12) will help you foster a culture of safe and healthy behaviors both on and off the job.

Click here for an event preview with schedule of events, featured speakers, Expo Marketplace and other details.

Free registration at www.ohiobwc.com.

29-Feb-12 BWC "One Claim Program" & Credit Card Payment Changes  2011 Policy Year  - One Claim Program participants are required to complete a one-day class through BWC’s Division of Safety & Hygiene. This is to be completed by 6/30/12. 2011 OCP employers that are renewed in the 2012 Policy Year will be “grandfathered” in at the 40% discount for their remaining years of eligibility. The new training requirement will be to complete 3 Hours of online classes within the 2012 Policy year. 2012 Policy Year  - Employers entering  OCP for the first time in the 2012 Policy Year  will be required to complete a 3 hour (1/2 day) classroom style class with the Div. of Safety & Hygiene the first year and 3 hours online during subsequent OCP eligible years. The discount schedule for OCP employers entering  the 2012 Policy year is as follows:                                                               Year 1 = 20% off Base Rate                                               Year 2 = 15% off Base Rate                                               Year 3 = 10% off Base Rate                                               Year 4 =   5% off Base Rate Please contact John Lykins at john.lykins@bwc.state.oh.us with any questions.

24-Feb-12 PUCO Yanks AEP Rate Pact but Restates Desire for Transition to Market  Electricity rates for American Electric Power customers in the state will return approximately to last year's levels after the Public Utilities Commission of Ohio Thursday rescinded a rate plan approved in December that drew loud protests from dry cleaners, other

small businesses, schools and other groups. AEP said it was disappointed by the move. Commissioners voted unanimously to restart the process of working out a rate agreement for AEP Ohio, but said repeatedly they'll keep moving toward market-based rates for electric utilities, and that certain customer classes can't expect to be subsidized by others.

"In this matter there remain many disputed issues that have far-reaching impacts for Ohio, for AEP and for the customers that it serves. Rather than make an expedient or politically easy decision in response to one issue or another, the best course of action for us to take is to step back and to reset the process, which will allow all parties the full opportunity to develop their positions on the record and provide the commission all of the necessary information we need to make the best decision possible," Commission Chairman Todd Snitchler said. "Nothing in our action today should be perceived or understood as the commission moving away from our goal of moving toward a more robust, competitive marketplace."

"I remain convinced that appropriately functioning markets will produce the best results for utilities and for consumers," said Commissioner Andre Porter. "I know that markets are not perfect currently. They need to be modified so that utilities have long-term certainty, and so their customers have access on the retail side to varied options.

"At the end of the day, consumers deserve to be engaged in how they consume electricity," Porter said.

AEP reacted Thursday by characterizing the commission's decision to restart the process as an overreaction.

"We are concerned by the commission's reaction to what we believe were solvable issues on rehearing," said a statement from Nicholas Akins, president and CEO of AEP. "We are currently evaluating our options and the potential financial and operational impacts on AEP Ohio."

With their downtown Columbus hearing room filled by those interested in the case Thursday -- a few of whom clapped at the announcement of a reversion to 2011 rates -- commission members also stressed Thursday that they must rely solely on information in the official case record to decide on rate agreements.

"Therefore, we need a record based on full participation from what are now very interested parties that will allow this commission direct a transition to market based on prices that are fair to all classes of customers, AEP and competitive suppliers," said Commissioner Stephen Lesser.

"I am pleased to see that this room is filled today. The reason for your engagement I hope is that you actually want to understand the process," said Commissioner Andre Porter. "I'm sure you want to save money. At the end of the day, I want you to save money. But we cannot continue to do so through artificial means. If it costs a certain amount to serve a customer, then a customer's bill should closely align to the cost of serving those customers. Certain customer classes have either historically benefited from special discounts, or recently, some additional customers have requested that special discounts be provided. This type of behavior I believe is actually troubling. I think that going forward, we need to ensure that we all understand that when there are discounts provided, someone actually has to pay

for those discounts."

Commissioner Paul Centolella urged AEP to consider "more broadly" ways to transition to market rates, including through improved utilities, giving customers greater ability to control their own costs, and avoidance of "cross subsidies."

"For example, the church that uses most of its power on Sunday mornings when market prices are low can be subject to the same demand and energy charges as a customer whose usage coincides with peak price periods," Centolella said.

The commission also said in a released statement that Thursday's action allows it also to address concerns with a recent decision by AEP to propose divestment of some assets to other states before the Federal Energy Regulatory Commission. "AEP's FERC filing fails to ensure that all generation assets currently owned by AEP will be bid into the company's 2015 base residual auction. By taking quick, decisive action to rescind its December order and revoke asset divestiture, the commission ensures that its consideration of this issue will not be pre-empted by the FERC," the commission stated.

The commission said Thursday's decision leaves AEP's initial application, filed in January 2011, in place, giving the utility 30 days to withdraw or amend it. The commission said it will release a procedural schedule for hearing from parties in the case once AEP makes a decision.

The PUCO had heard hundreds of complaints from AEP customers following the December decision, and in turn also heard from Gov. John Kasich and state lawmakers voicing concern about the effects of the rates. 

The PUCO approved agreements for distribution rates and an Electric Security Plan for AEP Ohio in December, setting out plans for the utility to merge its operating company's, separate its distribution and generation assets and move by 2015 to setting generation rates through competitive energy-supply auctions. The agreements had been signed by 21 or 31 parties to the case, according to the commission. 

Following Thursday's statements from commissioners that they need full participation from all parties to build a complete record in the case, the Council of Smaller Enterprises (COSE), the small-business affiliate of the Greater Cleveland Partnership, said it plans to intervene to ensure small business interests are represented.

"We applaud the decision of Chairman Snitchler and the PUCO to re-open the AEP rate case in part to address the negative impact AEP's Electric Security Plan would have on rates for small businesses. COSE will formally intervene in the process to represent both our members within the AEP territory as well as all small businesses who are impacted by this process and need to have their voices heard at the PUCO," said a statement from Steve Millard, COSE's president and executive director. 

The Office of Ohio Consumers' Counsel had declined to sign on to the agreement the PUCO signed in December, and also weighed in Thursday's on the commission's decision.

“The PUCO’s rejection of AEP’s settlement is a beginning step toward improving electricity rates for the public,” Interim Consumers’ Counsel Bruce Weston said in a statement. “The

Consumers’ Counsel will continue its advocacy so that the voices of Ohio’s residential consumers are heard in this process for fair rates.”

The Ohio Manufacturers' Association (OMA) also praised the PUCO's decision, through a statement from OMA President Eric Burkland. 

“The Ohio Manufacturers’ Association commends the PUCO for acting quickly and decisively to  ‘hit the reset button’ on AEP’s electric security plan once it became clear that the plan as implemented was turning out to be much different from the settlement agreement the OMA and other stakeholders signed onto back in December," Burkland said. “Starting over from the beginning is a prudent course of action given the magnitude of what’s at stake and the critical need in Ohio for competitive electricity rate structures."

17-Feb-12 Ohio EPA Reform Bill Gets Hearing (SB294)  A much anticipated Ohio EPA reform bill received its first hearing this week in the Senate Agriculture, Environment and Natural Resources Committee. Sen. Tim Schaffer, the bill’s sponsor, and Ohio EPA Director Scott Nally hailed the bill as a common sense measure that will protect the environment and provide regulatory relief for Ohio businesses. Last fall, Ohio EPA began meetings with interested parties to discuss proposed legislative changes that would make the agency more efficient and effective. Senate Bill 294 is the product of those meetings.

During the hearing, Sen. Schaffer said the bill’s reforms will improve permitting and outreach programs, as well as remove dual regulations and put in place simple good government practices. Director Nally emphasized the bill’s expansion of confidentiality protections for businesses that seek compliance assistance from Ohio EPA. He testified that the proposed reforms are based on programs in other states. Currently, only small businesses seeking air permitting assistance are covered under Ohio EPA’s confidentiality provisions.

Hearings on the bill are expected to continue in mid-March when legislators return to Columbus following their primary election break.

17-Feb-12 Drycleaner Outcry Gets Results  Often businesses wonder if their voice really makes a difference in Columbus. Late last week, the Public Utilities Commission of Ohio (PUCO) provided the evidence needed to know it does.

Last Friday, the PUCO announced it will revisit portions of an AEP rate plan that left many drycleaners scratching their heads when they opened their monthly electricity bill. The rate plan, approved by the PUCO in December, will allow AEP to transition to a market-based generation rate structure over a four and one-half year period. Additionally, AEP will separate its generation and distribution assets; and down the road, will begin to procure electricity for customers through competitive auctions.

As the full effect of the rate plan became clear, many drycleaners and other small businesses contacted their state legislators, the PUCO and the governor’s office. When faced with the outcry, the PUCO said it didn't expect the rate plan to result in the huge increases some small businesses experienced. Then, last Friday, the PUCO announced it would revisit the

case in hopes of finding a solution.

In making the announcement, PUCO Chairman Todd Snitchler stated, “We acknowledge the negative impact our decision is having on small businesses, the backbone of Ohio’s economy. To those affected customers, we too are deeply concerned and are fully committed to addressing the situation quickly. We want to resolve this issue so you can get back to positively impacting the economic recovery beginning to take place in Ohio.”

The PUCO hopes to have a solution in place by the end of February. 

15-Feb-12 Sen. Schaffer & EPA Chief Nally Propose Changes  Ohio Environmental Protection Agency Director Scott Nally Tuesday explained a host of statutory changes his agency is seeking to make regulations clearer to businesses, reduce duplication and expand certain programs.

Nally and Sen. Tim Schaffer (R-Lancaster) testified on the changes proposed in Schaffer's SB294 in the Senate Agriculture, Environment and Natural Resources Committee.

"I've had 326 external outreach meetings, and this bill is the culmination of those outreach meetings," said Nally.

"This legislation institutes some long overdue, common-sense permitting improvements as well as business outreach programs, modifications to remove dual regulations, and simple good government practices," said Schaffer.

The bill would expand the degree to which businesses can confidentially deal with the Ohio EPA on compliance questions. The agency's Office of Compliance Assistance and Pollution Prevention currently can only offer confidentiality to small businesses inquiring about air permits. Schaffer's bill would allow any business to ask about any permit type. 

"They should have the ability to have that conversation under confidentiality as long as it's not posing immediate harm," Nally said

The bill also would create a program for paying fees in lieu of wetland mitigation for impacts to isolated wetlands. Nally said that will give companies a clear idea of the per-acre cost of wetland impacts for business planning purposes.

The bill also would allow the Ohio EPA to renew National Pollution Discharge Elimination System (NPDES) permits when the permit holders are in violation of the current permit. Schaffer said the current prohibition on doing so means businesses might continue to operate under old permits with outdated pollution control standards.

Sen. Keith Faber (R-Celina) questioned one provision of the bill that would allow Ohio more freedom to adopt federal rules written under the federal Resource Conservation and Recovery Act, noting he's generally leery of allowing agencies greater power to freely adopt new rules. 

Nally said the inability to keep up with federal changes affects businesses that would like to opt for the state regulatory process rather than the federal process, but can't because of gaps

in the state program.

Other changes proposed in the bill include the following: 

- Allow solid waste landfills to temporarily store low-level radioactive waste;

- Exempt coal combustion waste from solid waste management district generation fees. Nally said the biennial budget bill provided such an exemption for municipal solid waste landfills but overlooked solid waste management districts. The intent, he said, is to encourage the waste to go to existing facilities, rather than have waste generators build their own disposal sites.

- Expand the type of sites and parties than can proceed with corrective actions to remediate sites through the Voluntary Action Program;

- Increase from 2,000 to 5,000 the number of tires a scrap-tire site can have and still be eligible for funding from the Scrap Tire Fund for cleanup;

- Change the fee structure for operator certification testing for drinking water and wastewater operators, in part to enable third parties to administer the test. Nally said current practice is to offer the testing once per year in Columbus, an inconvenience to test takers.

- Changes construction and demolition debris fees to encourage the removal of recyclable debris from the waste stream before disposal and clarify the application of fees to asbestos materials that go to either a construction and demolition debris landfill or a municipal solid waste landfill;

- Update statute of limitations laws to correct an omission made several years ago;

- Update hazardous waste reporting requirements to be biennial rather than annual, consistent with the U.S. EPA's practice;- Revise environmental background check requirements;

- Clarify terminology related to the types of hazardous waste permits subject to a compliance history evaluation;

- Eliminate consent-to-service requirements for people transporting solid waste. In response to a question from Sen. Lou Gentile (D-Steubenville), agency legislative liaison Tracy Freeman said the state instituted the paperwork requirement previously to keep track of people transporting solid waste in case they'd later need to be called in for legal proceedings. But she said the agency hasn't seen a need for that in the 23 years the requirement has been in place;

- Ban co-disposal of secondary aluminum production waste at municipal solid waste landfills, to prevent the harmful chemical reactions that occur during co-disposal;

- Removing some infectious waste oversight procedures to reflect the fact that such wastes are now heavily regulated by federal agencies;

- Make tampering with a public water system a felony.

Nally said the agency is seeking an additional amendment to pursue delegation authority from the U.S. Army Corps of Engineers on the section 404 permitting program under the Clean Water Act. Such a change would allow businesses to seek permitting under both sections 404 and 401 from the state, rather than going to the Corps of Engineers for one and the state for the other.

14-Feb-12 Ohio's CSI Information Now Accessible on Facebook, Twitter  Lt. Governor Mary Taylor announced recently that Ohio's Common Sense Initiative (CSI) is now posting program information on Facebook and Twitter. She said that these social media resources, along with the CSI Ohio website, provide Ohioans with background, contact information and timely CSI-related news. "Facebook and Twitter are important tools that provide immediate information to Ohio businesses, consumers and the general public," said Taylor. "The goal of CSI is to create a new culture in Ohio government that recognizes the business community as a partner in economic success. In order to do that, we must offer multiple means of gaining and usinginformation. Facebook and Twitter provide a resource for Ohioans so they can access the information they need to grow their business, create jobs, and realize economic success." Launched Jan. 10, 2011, by the Kasich administration, CSI Ohio addresses Ohio's regulatory policies and "helps make Ohio a jobs- and business-friendly state," Taylor said. Ohioans with ideas on reforming excessive or duplicative rules are encouraged to visit the CSI website at www.governor.ohio.gov/CSI, visit Facebook and click "Like" on the CSI OHIO page, and follow on Twitter at https://twitter.com/#!/CSI_OHIO.

13-Feb-12 EPA Reform Bill Emerges (SB 294)  Ohio dry cleaners may experience a kinder, more effective EPA as a result of legislation its sponsor says will reform certain provisions under the Ohio Environmental Protection Agency to provide businesses with regulatory relief. Sen. Tim Schaffer (R-Lancaster) said the bill (SB 294) was drafted in collaboration with EPA Director Scott Nally. The measure is scheduled for sponsor testimony on Feb. 14 in the Senate Agriculture, Environment & Natural Resources Committee, of which Mr. Schaffer is vice chairman. “This legislation will go a long way in continuing job growth in Ohio by ensuring a more business friendly climate while protecting the environment for our citizens,” Sen. Schaffer said in a release. “The legislation institutes some long over due common sense permitting improvements,” he said. “Among other things, it will allow more options for protective wetland development and provide the Ohio EPA director with more discretion when renewing wastewater discharge permits.”  “I am confident this legislative proposal will help streamline the regulatory process while maintaining good, solid, environmentally protective practices,” Mr. Nally said in a release. The Ohio Environmental Council has given tentative support. Staff attorney Trent Dougherty said the legislation appears to “strike that balance for efficiency and

environmental protection” but OEC will monitor it in hopes that it doesn’t become a “Christmas tree for other provisions to be hung on.” According to Mr. Schaffer’s office, another key update includes a reduction of duplicative labeling, shipping and transportation requirements for heavily regulated infectious waste generators. Also, businesses would have the ability to confidentially inquire about requirements for all permits. Currently, businesses can confidentially inquire about air permits. Sen. Schaffer said by including confidentiality provisions the state is “fostering a positive relationship between the business community and environmental protection.”“In these tough economic times, we need to be sure that we are providing Ohio businesses with a friendly reception that affords them the opportunity for growth,” he said. The bill also makes certification testing for drinking and wastewater operators more accessible by expanding the frequency and locations for which examinations are given, according to Mr. Schaffer’s office. Currently, testing is administered once a year in a single place.OEC particularly likes the ability for construction and demolition debris landfills to charge for materials containing asbestos, which could lead to such items being taken to more protective solid waste landfills, Mr. Dougherty said. The organization also supports measures addressing criminal penalties for tampering with public water sources. However, OEC does have reservations about some confidentiality measures, Mr. Dougherty said. “The omnibus bill, in our eyes, has a lot of really good points that I think are protective, that are really fixing some holes that have been in the law for quite a while,” Mr. Dougherty said. “If the other provisions that we see as really rather innocuous actually help efficiencies on the permitting side for businesses, then it could be a win-win.” “So we’re cautiously optimistic that this is the bill that we’ll see in the end. And we are currently supportive but are going to be probably having to play some defense as people are adding some provisions to this that may jeopardize the EPA’s authority.”

13-Feb-12 PUCO Plans to Address Dry Cleaner Complaints on AEP Rate Hikes The Public Utilities Commission of Ohio said Friday it will revisit a recent AEP Ohio rate case after hearing from dry cleaners, law-makers, the governor, and angry small businesses about sharp price increases. In a statement, PUCO Chairman Todd Snitchler said regulators had relied in the rate case on information from AEP in allocating to different classes of customers hundreds of millions of dollars in cost-recovery charges for deferred distribution and fuel costs, and the expense of moving to a market-based model. "Our decisions are only as good as the company billing information they are based upon," Snitchler stated. "In this case, we depended upon AEP to provide accurate data upon which to base our decision. Now that we have a full understanding of the impacts, we are actively developing a plan to resolve the rate impacts faced by affected General Service 2 customers.  While I cannot prejudge the outcome, we will take this issue up immediately so that there

can be a long-term resolution in place by the end of this month." The PUCO approved agreements for distribution rates and an Electric Security Plan for AEP Ohio in December, setting out plans for the utility to merge its operating company's, separate its distribution and generation assets and move by 2015 to setting generation rates through competitive energy-supply auctions.  Gov. John Kasich said Thursday he plans to discuss the rate increases with Snitchler, while saying he didn't want tomicromanage or "lean on" the PUCO and stressing that increased competition and better energy policies are the long-term solution for lowering electricity costs.  The commission said it also had heard from more than 200 customers affected by the increases. It urged affectedcustomers to file written comments online under case No. 11-346-EL-SSO atwww.puc.state.oh.us/secure/PicForm/index.cfm?intype=comment. "My fellow commissioners and I are deeply troubled by what we have heard from business owners, elected officials, and the governor on this issue," said Snitchler. "We acknowledge the negative impact our decision is having on small businesses, the backbone of Ohio's economy. To those affected customers, we too are deeply concerned and are fully committed to addressing the situation quickly. We want to resolve this issue so you can get back to positively impacting the economic recovery beginning to take place in Ohio."

10-Feb-12 Tax Incentive Bills Moving Forward at the Statehouse  Usually after the passage of the state’s two-year biennial budget bill, few if any tax or incentive-related bills get more than a courtesy hearing, particularly if they have any impact on the state’s general revenue fund (GRF). This is not necessarily the case in the 129th General Assembly. Three bills that are intended to help businesses and encourage job creation are moving through the legislature’s committee process. This week, the House passed House Bill 365, sponsored by Rep. Pete Beck, by a vote of 88 to 8. The bill would allow business owners who pay state personal income tax and increase their Ohio payroll withholding by 10 percent, to reduce the amount of federal enhanced depreciation expense they must otherwise add back on their Ohio income tax return. This means sole proprietors, partners, and shareholders in limited liability companies and S corporations would be able to preserve their company’s capital for future investment in Ohio if they meet the required payroll increase threshold. The second piece of legislation is House Bill 327, sponsored by Rep. Anne Gonzales and currently in the House Economic & Small Business Development Committee. It expands eligibility for the job creation and job retention tax credits by allowing “home- based employees” to be considered as employed on the project.  Finally, legislation encouraging businesses to locate in currently vacant or unoccupied buildings and create jobs, House Bill 18, has passed the House and is in the Senate Ways & Means & Economic Development Committee. Sponsored by Rep. Nan Baker, the bill provides a $500 per employee grant from the Facilities Establishment Fund for each newly-created job to an employer that moves into a 75 percent vacant building abandoned for one year or more. Companies eligible for the grant must employ at least 50 percent or more of

their employees or at least 50 employees at that space.

06-Feb-12 A Few Industries Will Get Refund Check From AEP!!  

American Electric Power will be sending monthly checks to some industrial businesses because of an extraordinary quirk in its new rate plan. The checks, which relate to just one part of a company’s overall electricity costs, are part of a rate system approved in December by the Public Utilities Commission of Ohio that has raised costs for many small businesses while lowering costs for some large ones.

Rate spreadsheets now available from AEP show the extent of this disparity, including the fact that a few large businesses will see their electricity-delivery costs drop below zero, meaning they will get a credit or a check.

Supporters of the plan say the rates are fair, considering that large industrial businesses often don’t get their electricity from the local delivery system, so they shouldn’t have to pay delivery charges. Instead, they get their electricity from the interstate transmission system that’s federally regulated.

But some economists and rate analysts say that the state should not approve utility rates that actually pay one group of customers at the expense of others.

“It doesn’t make any sense,” said Robert Burns, a research specialist at the Center for Energy, Sustainability and the Environment at Ohio State University.

Earlier in his career, Burns helped officials in West Virginia look at how to change their electricity rates. One of the proposals would have given some customers a monthly credit for delivery costs.

“We presented the model, and we said, ‘Of course, you would never do this.’ You don’t get to the point where you write people checks just because they’re attached to the system,” he said. But the PUCO-approved plan would do exactly that.

The AEP credits are going to a subset of companies in the “General Service 4” rate class, which is made up of the largest manufacturers. The number of companies receiving credits is not available, but people who regularly deal with rate issues speculate that the tally is probably fewer than 200. That would be a fraction of 1 percent of AEP’s customer base.

The Ohio Energy Group, a coalition that represents some of the state’s largest manufacturers, says the new rates are fair, considering that big businesses have paid a disproportionately high share of delivery costs for decades. Those payments served as a

subsidy of sorts for smaller businesses, said Michael Kurtz, lead attorney for the group.

“It’s human nature that these small-business customers get upset when their subsidy gets taken away,” he said.

The rates are the result of negotiations last year among AEP, the PUCO staff and several dozen other companies and groups, including the Ohio Energy Group.

Kurtz said the delivery-cost break for large manufacturers makes sense because the utility uses that money to maintain the parts of the delivery system that the largest businesses do not use. An auto plant or a metal factory will hook straight into the utility’s transmission system, which is regulated on the federal level.

Here’s an example of a scenario that would lead to a refund: Under the new rates, a hypothetical factory using 12 million kilowatt-hours of electricity per month with maximum demand of 20,000 kilowatts would have a delivery charge of minus $69,000 for the month.

If the customer gets its electricity-generation service from AEP, the credit probably would be applied to the generation bill, which in this case would be about $600,000 after the credit.

However, if the customer gets its electricity-generation service from another provider, the only “bill” from AEP would be a refund check for $69,000.

06-Feb-12 Cost of Electricity Shocks Schools & Government as well as Dry Cleaners  

Dry cleaners and other small businesses aren’t the only ones upset about the sudden increase in American Electric Power bills: Schools and governments are reacting with disbelief that their bills are jumping so dramatically. And the fallout will affect taxpayers.

Economists, meanwhile, say the rising costs are bad news for Ohio’s struggling economy because they could put the state at a competitive disadvantage.

Pressure appears to be mounting on the Public Utilities Commission of Ohio, the agency that approved the rates in December. The agency has received 103 complaints about the rate increases, most of which were made in the past few days, a spokesman said.

Most complaints are about small-business rates, but school districts said they also are filing complaints.

“It’s blindsided us,” said Paul Shaw, treasurer of Logan-Hocking schools.

The Hocking County district, like many others, has cut its energy consumption through various steps, including reducing lighting, keeping computers off at night and closing buildings during holiday breaks.

But the increase in AEP’s distribution rates offsets any potential savings, officials say. Shaw’s district, like many other taxpayer-funded groups, has buildings that are in the same rate category as small businesses.

“We’ve done our part, but we’re getting hammered by these increases,” Shaw said.

AEP says the rates are part of a transition toward great-

er competition among electricity providers. The company realizes that the transition is “ adversely impacting certain customer groups that in the past have enjoyed partially subsidized rates,” said spokesman Jeff Rennie.

For customers who feel blindsided, Rennie noted that the PUCO approved the rates on Dec. 14, which allowed only about two weeks before they went into effect.

“There simply was not enough time to provide advance notice to customers,” Rennie said.

The PUCO’s governing board has said it will review its decisions, a move that is common in major cases such as this. But the panel has not specified which parts of the case it is reviewing.

There is concern that the PUCO’s decision, left unchanged, will harm Ohio’s efforts to create jobs here.

The rate increases will “have a devastating effect on job creation,” predicted James Newton, chief economic adviser for Commerce National Bank in Columbus. “It is basically shooting a torpedo into the economic ship of state, and it’s just plain stupid and self-destructive.”

Gov. John Kasich will not step in, said his spokesman, Rob Nichols. Kasich is going to let the PUCO handle the situation: “We don’t micromanage utility-rate cases.”

In this case, rates are rising because of provisions the PUCO approved that shift costs from the largest businesses to small ones, and because of AEP costs that were deferred from previous years. All the components add up to rate increases of up to 40 percent for some customers.

The city of Columbus has its own electric utility, which powers many city facilities. But it

pays AEP for facilities that aren’t on the city grid.

Laura Young Mohr, spokeswoman for the city’s Division of Power and Water, provided six examples comparing AEP electricity bills from December 2011 and last month. Two of the bills rose by 26 percent, and one rose by 13 percent.

But how the increases will affect Columbus’ finances won’t be known until the city does a quarterly financial review at the end of March, she said.

Franklin County and COTA leaders also are monitoring the issue, but they did not have estimates about their overall rate changes.

Some school districts that invested in energy-saving upgrades are dumbfounded by the size of their latest electric bills.

Grandview Heights schools, for example, used 5 percent less electricity in January than in December, but their total bill increased 23 percent, to $6,011.

“I could certainly find better ways to spend the money,” said Superintendent Ed O’Reilly.

Worthington schools spent about $129,000 on electricity in January, an 18 percent increase from the previous month. Treasurer Jeff McCuen said the impact of changes in AEP delivery charges, which rose by 65 percent, “seem out of line with reality.”

District leaders said the mild winter will help them absorb the additional costs.

But Logan-Hocking schools might have to cut positions to balance the budget, Shaw said. The district’s total electric bill last month was $51,673, a 30 percent increase from the December bill.

Shaw had forecast a drop in electricity expenses this school year because of an energy-saving program that shaved about $124,000 off those bills in the past six months compared with the same period the previous school year.

Some school districts switched to alternative electricity providers in recent years to get lower prices on electricity generation. But all customers pay AEP for the delivery of power, which is the part of the bill that has risen the most.

Schools would be paying even higher rates if not for several discounts the PUCO included in the plan. For example, schools are exempt from the “market-transition rider,” a charge that

is the largest part of the rate increase for some businesses.

But that merely reduces the size of the increase at a time when many school districts cannot afford any unexpected costs.

03-Feb-12 "Right to Cure" Bill Supported by Ohio Chamber of Commerce (HB275)  Common sense reforms to Ohio’s Consumer Sales Practices Act (CSPA) were advocated by the Ohio Chamber this week to the Senate Insurance, Commerce & Labor Committee. The Ohio Chamber’s director of labor and human resources policy, Tony Seegers, voiced support for House Bill 275, which will entice businesses sued by consumers to make a realistic offer of settlement, or “right to cure”, and encourage consumers to accept that offer.

The CSPA was enacted in 1972 to allow consumers to sue businesses for alleged unfair and deceptive acts. The law is a strict liability statute, which means that a company cannot defend itself on the grounds that the unfair or deceptive act was a mistake or that it unknowingly violated the law. Therefore, a company that has legitimately made a mistake will still be held liable for the consumer’s actual damages. The CSPA also allows a consumer to receive up to three times his/her actual damages (known as treble damages) as well as court costs and attorney fees.

Businesses can be sued for mere “paper” or technical violations of the CSPA. These types of violations cause the consumer no real harm, yet they are entitled to receive a statutory minimum of $200 for the “harm”. Because plaintiff attorneys can collect treble damages and attorney fees, they have no incentive to accept reasonable settlement offers.

In his testimony, Seegers said HB 275 would incentivize consumer attorneys to more realistically value their cases, as it will enable companies sued under the CSPA to make a cure offer. Under the bill, the cure offer must be financial compensation and an additional offer to pay the consumer’s attorney fees related to filing the initial complaint, up to $2,500. If the consumer accepts the cure offer, the case is settled. If the consumer does not accept, proceeds with litigation and is awarded damages less than the cure offer, then the company will not be liable for the consumer’s court costs and attorney fees after the date he or she received the cure offer. The company will also not be liable for treble damages. Seegers concluded his testimony by saying that HB 275 should help change the minds of plaintiff attorneys who do not want to accept reasonable offers of settlement.

01-Feb-12 Senate Committee Hears Right to Cure Bill (HB 275)  The Senate Insurance Committee took testimony January 313 regarding HB 275 which allows suppliers and consumers to enter into a Right to Cure agreement. Proponent testimony was given by Joe Cannon and David Brown on behalf of the Ohio Auto Dealers Association, as well as Curtiss Cornett, Tony Seegers, and Chris Ferruso.  Brown said HB275 creates "a mutual incentive to resolve cases."

Sen. Schiavoni asked whether there was an influx of litigation that prompted HB275. Cannon replied that there has not been any increase in litigation, but that the bill was

designed to address the discrepancy between what businesses have to pay in court cases and what consumers actually receive.

Cornett, a lawyer, said that he has worked on cases where the damages awarded to the consumer were negligible compared to the attorney fees awarded.

Seegers, testifying on behalf of the Ohio Chamber of Commerce, said HB275 would require businesses to make "a realistic consideration of what a plaintiff may be awarded by a court" in order to avoid treble damages, court costs and attorney fees.

Ferruso, legislative director for the National Federation of Independent Business/Ohio, said he believes HB275 "strikes a balanced approach by providing an appropriate remedy to consumers and their attorneys, ensuring that suppliers are not saddled with potentially costly awards and damages, and continuing to allow the Ohio attorney general to go after bad actors."

31-Jan-12 New Training Requirements for Underground Petroleum Tank Operators  New training requirements for Underground Petroleum Storage Tank operators will take effect August 8, 2012.  Click here for the ‘Operator Training Frequently Asked Questions’ document which includes a link to the BUSTR Website as well as the ‘Ohio Class C UST Operator Training Instructional Material, Evaluation and Certificate Form’ for your review and use. In addition, a list of the Operator Training Course Sponsors is included.  In general, the Class A is the ‘owner’ or ‘owner representative’, the Class B is generally the ‘store manager’ and Class C is generally the ‘attendant on duty’.  BUSTR is tentatively scheduled to hold Class A and B Operator Training classes at the State Fire Marshal's Office in Reynoldsburg, Ohio on the following dates: 

May 16th 2012 (9:00AM-1PM) May 30th 2012 (9:00AM-1PM) May 31st 2012 (9:00AM-1PM)

An email to all UST owners was sent out in December 2011 and January 2012 outlining this training opportunity. If you have additional questions after reviewing the documents, please feel free to contact Jason AnthonyUST Inspector SupervisorOhio Department of CommerceDivision of State Fire Marshal-BUSTR8895 E Main StReynoldsburg OH 43068Office/Cell:  614-205-7387Fax:  614-644-7227Email:  jason.anthony@com.state.oh.usWebsite:  http://www.com.ohio.gov/fire/bustMain.aspx

23-Jan-12 Professors Critique use of Tax Credits  

Two noted economics professors at separate Ohio universities expressed different levels of concern about the use of tax deductions, exemptions and credits – also known as tax expenditures – to attract capital investment and jobs to the state. One was openly opposed to them on the grounds that they violate the tax principle of economic neutrality and result in government picking winners & losers rather than a functioning, free market. The other viewed tax expenditures as just another way to accomplish and fund a legislatively approved purpose without having to go through the state budget’s appropriation process.

In testimony before the Senate Ways & Means & Economic Development Committee, Professor Richard Vedder of Ohio University first outlined the attributes of a good tax – those being simplicity/uniformity, fairness/equity, transparency, and economic neutrality. He then said tax expenditures are deviations from uniformity and simplicity involving de facto substitution of varying effective rates of taxation in an administratively costly manner. He believes the benefits of tax expenditures are somewhat over-stated and their continued existence impedes economic growth because their relationship to lowering overall tax rates is not understood by the public.

On the other hand, Professor Ned Hill of Cleveland State University recognized it is the nature of the beast that tax expenditures will accumulate in any state’s tax code as economic development deals are struck. Most of his concerns were related to the state’s ability to verify the actual impact of the tax expenditure – for example, does it generate other tax revenues to indirectly pay for itself? Should the tax expenditure be treated as a state investment and, if so, how should the return-on-investment be measured? 

16-Jan-12 Ohio CPAs Express Optimism about State's Economy  The Ohio Society of CPAs released the results of a multi-state business outlook poll Monday, finding Ohio's accountants are slightly more optimistic about business growth in the state in 2012 than those in other states. The poll was conducted among CPAs by the University of Toledo Urban Affairs Center in late 2011 on behalf of the Ohio Society of CPAs and CPA organizations in Indiana, Michigan and Pennsylvania. It was conducted among nearly 13,000 CPAs who are partners or sole owners in public accounting firms or serve as CEOs, CFOs or presidents of companies in various industries. Respondents were slightly more optimistic about business growth in their states than in the nation as a whole. The Ohio Society of CPAs also said that there were more Ohio CPAs expecting marginal or substantial revenue growth than CPAs in neighboring states. Overall, only 6 percent predicted robust growth nationwide, but 9 percent predicted robust growth for their state. In addition, another 20 percent see growth in their industry, and 25 predicted growth in their organization. Those surveyed indicated new hiring in the next 12 months, while expressing concerns about health care costs, government regulation and uncertainty in the tax laws. "The poll shows businesses in Ohio and surrounding states are experiencing slow but consistent growth despite daunting economic and business challenges," said James D. Gottfried, CPA, chair of the Ohio Society of CPAs. "These include increasing costs for regulatory compliance, rising health care costs and a complicated tax structure in Ohio and nationally." Only 10 percent of respondents said they expect a reduction in employment, while 32 percent expect marginal growth in employment, and 2 percent expect a substantial increase. One of the biggest concerns CPAs and their clients listed was the ability to obtain funding, with 78 percent in Ohio agreeing that small businesses do not have access to

adequate credit to grow or sustain their operations. Ninety-eight percent of respondents said health care costs are a concern for businesses, with 94 percent agreeing that companies are reevaluating employee benefits and costs and another 63 percent saying that companies are dropping or reducing employee health insurance coverage. Respondents also listed concerns with labor costs, workers' compensation and public pension funding, with public pension exposure taking the highest percentage. About 76 percent of Ohio respondents said state pension funding is problematic. About 61 percent of respondents said that companies are taking advantage of available tax breaks, but said few were using lower interest rates as an opportunity to grow. Respondents also said that while they see taxes, especially business taxes, and regulatory costs as a hindrance to businesses, those factors won't cause them to move their businesses and practices to another state. Ohio CPAs also said they believe there is room for improvement in the municipal tax structure, and 94 percent said either greater administrative uniformity, a more streamlined filing process, or both should be a goal in Ohio reform efforts. Eighty-five percent of Ohio respondents also said they were more concerned about overall government regulation than two years ago, and 34 percent said state and local regulatory burden is a hindrance to attracting job creators to the state. CPAs also listed better economic packages than those offered by competing states and local government cooperation as other ways to attract out-of-state job creators.

04-Jan-12 Still Time To Enroll in OCA's Workers' Comp Group Rating Program  Time is Running Out – Sign Up Now Enrollment materials for the July 1, 2012 Frank Gates Workers’ Compensation Group Rating Program has been sent to all employers that qualify.                 If your company has not enrolled in the Program yet, the deadline for Frank Gates to receive the enrollment materials is Thursday, February 23, 2012. Return the materials now to lock in your discount.                                                                                                          If you have not requested a July 1, 2012 Group Rating quote from Frank Gates, there still is time – but you must complete an AC-3 (Temporary Authorization to Review Information) in the near future. To request a no-cost, no-obligation quote, please contact Frank Gates at (800) 395-4119. Note that employers currently in the Frank Gates Group Rating Program do not need to send an AC-3 as they are automatically reviewed for the Group Rating Program.  The deadline to join the 2012 Group Rating Program is approaching quickly!  Please call Frank Gates to help find the best option for your business.

04-Jan-12 BWC's New "Destination: Excellence" Program  During the December 2011 BWC Board of Directors Meeting, the Board approved a number of changes to the current rating structure.  The overall project is titled 'Destination: Excellence' and the changes include adjustments to current programs and the release of new programs.  Here is an article that outlines the changes made by the BWC.  Note that there are some details that are still being tweaked, but the general concepts have been approved.

03-Jan-12 Panda Express Headed for the Cleaners  U.S. fast-food chain Panda Express said it is turning its Chinese food franchise expertise to a new venture -- dry cleaning.

"There isn't any consolidation in this particular industry. There is no McDonald's of dry cleaners. We see this as an opportunity," said Andrew Cherng, co-chief executive officer of Panda Express.

The company, which began in 1973 with one restaurant in Pasadena, Calif., and eventually became an empire tucked into food courts in U.S. shopping malls, earned $1.4 billion in revenue in 2010, The Los Angeles Times reported Wednesday.

Jeff Wampler, chief executive of Agile Pursuits Franchising, which manages the Tide dry cleaners business at Procter & Gamble, said dry cleaning customers have, "generally been dissatisfied with the poor physical environment, routine errors with garment care and unremoved stains common at many dry cleaners.

"We're trying to elevate the industry," he said.

Panda Express expects to open five stores in 2012 and as many as 200 more if the franchise takes off.

Cherng said, "The restaurants are already pretty saturated. Doing another line of business presents us with more real estate opportunities."

Some voiced skepticism that dry cleaning could succeed as a franchise business, due, in part, to the training that is required to do the work.

At this point, it is rare for a dry cleaning company to operate even two or more outlets. Ninety percent of the $9.2 billion per year industry is comprised of owners who operate only one shop, research firm IBISWorld reported.

Read more: http://www.upi.com/Business_News/2011/12/28/Panda-Express-headed-for-the-cleaners/UPI-80751325099480/#ixzz1hw5o4J5W

03-Jan-12 Six Important Small Business Marketing Trends to Watch in 2012  Every year around this time, we shift our focus from "the year in review" to "the year ahead." Trend reports abound, and with a bit of searching you can usually find one targeted to whatever your specific business niche might be. Too often, though, these trend reports get delivered in overwhelming PowerPoint decks crammed with head-spinning data, charts and graphs.

The renowned brand strategy consultancy Landor saves us that migraine in their look ahead with an eminently digestible article that looks at a host of different marketing areas–naming, demographics, image sharing, China, mobile technology, on-demand media, design, innovation, change and the notion of trends itself–and answers three simple questions: What can we expect in 20102? What is the impact on brands? What brands stand out?

Here are the most relevant trends for entrepreneurs, startups and small businesses for 2012, in the context of marketing and branding.1. Abstract is the new concrete. Names–for products, for companies–will get more abstract. "Finding a name that is unique, memorable, and–very important–ownable, has become increasingly challenging," states Jason Bice of Landor. "Names that are coined, abstract or arbitrary stand the greatest chance of clearing the multiple hurdles involved in the naming process." The implication is that you need to become a better storyteller. "Coined names come with zero baggage," continues Bice. "Unfortunately, they also come without a built-in meaning. Couple that with brands being increasingly accountable to a very vocal and socially networked public, and story becomes a crucial part of what a name needs to deliver."

2. Boomers–they're baaack! The 47 to 65-year-old demographic, also known as the Baby Boomers, is an afterthought for most marketers. That means the estimated 77 million boomers in the United States are undermessaged and underserved. "They control over 50 percent of discretionary spending and enjoy 80 percent of all leisure travel," writes Landor's Susan Nelson. "They represent about 40 percent of regular Facebookers. But the percentage of marketers targeting the boomers? Neglible." That sounds like opportunity calling. A few smart brands are catching on and catching up, but "so many consumer packaged goods and media brands seem stuck in the fallacy that early adopters are all young and cool," Nelson states. "They don't get that there are a lot of boomers with plenty of money to spend."

3. Trending is trending. Hockey great Wayne Gretsky was once quoted as saying "I don't skate to where the puck is; I skate to where the puck will be." It's become a bit of a cliche, but customer and market trends are changing at the speed of a hockey puck on ice. One of the things that's changing is trending itself. "The emergence of 'what's trending' is itself an upcoming trend impacting what we see (Charlie Sheen's #winning), what we don't see (#occupywallstreet trending blocked by Twitter) and ultimately how we interact with content online," advises Karl Isaac, Landor's Executive Director of Digital Branding. "Facebook's change to feeds organized by top stories sent a clear signal that trending is an increasingly significant influencer of user interaction." Easy ways to hunt for trends via Twitter include Trendsmap, Topsy and Trendistic.

4. The photo's the thing. It's true: a picture's worth a thousand words. Over 90 billion images have been uploaded to Facebook. The ultra simple app Instagram is experiencing exponential growth, and even behemoth GE used it to post "behind the scenes" photos of manufacturing plants and distribution channels to foster a sense of consumer intimacy and authenticity. According to Russ Meyer of Landor, "Brands that can harness these emerging social behaviors to their advantage, much the way American Express did when it partnered with Foursquare to offer special deals, will see breakthroughs in their relations with the public. To be successful in 2012 and beyond, brands will have to follow the trail blazed by consumers in regularly sharing relevant images online."

5. Tablets, tablets everywhere. "The tablet is the first true crossover device for use both at home and out in the world," writes David Keefe. "And brands are starting to understand the tablet's relevance to retail: Their owners increasingly take them to grocery stores, pharmacies and car dealerships." Keefe's advice? "Start today. Migrate your audience. Think video. Understand how to integrate tablets into places that intersect with existing

brand touchpoints. For example, many new cars will soon be equipped with tablet-like devices."

6. Creativity takes center stage. According to Landor, the burning question for 2012 is this: How can companies rapidly and efficiently infuse innovation across their entire culture, capitalize on the new ideas they spawn, and create value for customers and equity in their brand? "It's no longer enough to move the line," states Landor's Allen Adamson. "Companies must reinvent it. For example, Uniqlo has taken the basic Gap formula and made it better, more fun and more edgy. This trendy Japanese retailer, with its amazing new flagship store in New York, can make anyone look cool, and for a very cool price."The implication is that if your company's DNA doesn't carry the gene for nimble creativity, you may not make it to 2013.

You can read the full article here. What might the potential impact of these and other emerging trends be on your business? How will you respond in 2012?