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On July 1, 2026 several parties filed initial comments  in the Public Utilities Commission’s (PUC’s) review of rules regarding corporate separation for electric utilities/affiliates in Ohio Adm.Code Chapter 4901:1-37.

Office of the Ohio Consumers’ Counsel (OCC) – “The importance of Ohio’s corporate separation rules has never been more evident than in the wake of the House Bill 6 corruption scandal. Those rules exist to protect consumers by ensuring that regulated monopoly utilities do not use their captive customer relationships, ratepayer-funded resources, or market power to benefit competitive affiliates or other nonregulated interests. The House Bill 6 investigations exposed the consequences of inadequate separation between regulated and unregulated operations, leading to the extensive audit of corporate separation requirements, as requested by the Office of the Ohio Consumers’ Counsel (“OCC”).”

“That audit ultimately found multiple violations of the corporate separation rules, including improper sharing of personnel and customer information, preferential marketing practices, deficiencies in cost allocation, and failures in corporate compliance oversight. These findings underscore that robust, enforceable corporate separation rules are an essential safeguard against cross-subsidization, unfair competitive advantages, and the misuse of regulated utility assets. As the PUCO undertakes this rules review, the lessons of House Bill 6 demonstrate that weakening these protections would undermine both consumer confidence and the integrity of Ohio’s competitive energy markets.”

In its initial comments, OCC recommends the following general comments:

• “OCC does not oppose PUCO Staff’s proposed rule changes but OCC advocates for additional rule changes that PUCO Staff did not address.”
• “Ohio Adm. Code 4901:1-37-01 – Definitions. These rules purport to cover both regulated and unregulated products and services, but do not define what is considered an unregulated product or service. OCC therefore recommends that a definition should be added for “unregulated products or services.” “This term should be defined to include a product or service provided to a consumer behind the electric utility meter. These products or services should include, but not be limited to, distributed energy resources such as wind and solar generation and battery storage, electric vehicle charging stations and associated equipment, energy management services such as demand response, energy monitoring and control systems and devices, lighting and other smart controls, maintenance services, and warranty programs.”
• “Ohio Adm. Code 4901:1-37-08(E) – Method for charging costs and transferring assets. Ohio Adm. Code 4901:1-37-08(E) currently states: “The method for charging costs and transferring assets shall be based on fully allocated costs.” This rule is unfair to consumers and allows for cross-subsidization. This rule should therefore be changed to provide for asymmetric pricing, as follows: Ohio Adm. Code 4901:1-37-08(E) The method for charging costs and transferring assets shall be based on the higher of fully allocated costs or market price when a utility provides products or services to an affiliate. The method for charging costs and transferring assets shall be based on the lower of cost or market price when an affiliate provides products or services to a utility. This would make the PUCO’s rules consistent with FERC’s affiliate transaction rules. 18 CFR § 35.39, applicable to electric utilities subject to FERC jurisdiction”
• “Ohio Adm. Code 4901:1-37-09(A) – Sale or transfer of generating assets. The PUCO should strengthen Ohio’s corporate separation rules by requiring an electric distribution utility (“EDU”) to divest any direct ownership interest in electric generating facilities, including ownership interests in the Ohio Valley Electric Corporation (“OVEC”), as a condition of operating an EDU in Ohio. That would require a revision to Ohio Adm. Code 4901:1-37-09(A). That section currently states: “An electric utility may apply for commission approval to sell or transfer any generating assets it wholly or partly owns by filing an application to sell or transfer.”5 This should be changed as follows: Ohio Adm. Code 4901:1-37-09(A): “An electric utility may shall apply for commission approval to sell or transfer any generating assets it wholly or partly owns by filing an application to sell or transfer.”
• “New Ohio Adm. Code 4901:1-37-10 – Least-cost transmission planning. The PUCO should adopt a new rule, Ohio Adm. Code 4901:1-37-10, to protect consumers against wasteful transmission costs. The new rule would require utilities to demonstrate that they have followed least-cost practices for transmission project upgrades and investments.”
• “New Ohio Adm. Code 4901:1-37-11 – 501(c)(4) contributions. The PUCO’s corporate separation rules are intended to ensure that regulated utility operations remain independent from affiliate activities and that ratepayer-funded resources are not used to subsidize non-regulated enterprises. Disclosure of contributions to 501(c)(4) organizations is directly relevant to that purpose. Public disclosure enables the PUCO, consumers, and other stakeholders to verify that political expenditures are not being financed through regulated operations or facilitated using utility assets, or other resources subject to the corporate separation rules. The proposed disclosure requirement does not prohibit or restrict political activity. Rather, it provides transparency necessary for the PUCO to determine whether utilities are complying with existing corporate separation requirements and whether additional investigation is warranted when affiliate transactions or political expenditures raise concerns regarding use of regulated resources. . . Requiring utilities and their affiliates to disclose contributions to 501(c)(4) does not expand the PUCO’s regulation of political activity. Rather, it provides a reasonable transparency mechanism that enables the PUCO and interested stakeholders to assess whether the existing corporate separation safeguards are functioning as intended and whether regulated utility resources are being insulated from non-regulated activities. As corporate structures and methods of influence evolve, the PUCO oversight tools must likewise evolve to ensure that the fundamental purpose of corporate separation –”
• “New Ohio Adm. Code 4901:1-37-12 – Audit reports. Requiring utilities to file these reports would not impose a significant burden. The reports already exist and are provided to the utility. Instead, the proposal would improve regulatory transparency, reduce duplicative information requests, and enable the PUCO to determine whether findings identified by another regulator warrant further review under Ohio law. As the House Bill 6 scandal illustrated, effective oversight depends not only on having appropriate rules but also on ensuring that regulators receive relevant compliance information in a timely manner before deficiencies develop into broader threats to consumers’ interests and public confidence in utility regulation.”
• “New Ohio Adm. Code 4901:1-37-13 – Reporting of government investigations. The need for this rule arises from the FirstEnergy House Bill 6 investigation. FirstEnergy did not directly inform the PUCO and interested stakeholders of each material event as it unfolded. Instead, these events unfolded in FirstEnergy’s SEC filings and newspaper reports. The PUCO should adopt a rule that requires a utility to report these types of events directly to the PUCO and interested stakeholders. The importance of full disclosure is obvious from the experiences in the FirstEnergy House Bill 6 investigation. Each utility should be required to report on these types of material events. The PUCO and stakeholders should not have to learn of these events second-hand through the media.
• “New Ohio Adm. Code 4901:1-37-14 – Certification of compliance. Under the Sarbanes-Oxley Act, a public company’s chief executive officer and chief financial officer must personally certify the fairness and accuracy of each quarterly and annual SEC filing.26 Under OCC’s proposed new rule, a utility’s chief executive officer and chief financial officer would be required to annually certify that the utility is in compliance with the rules under this chapter. The rule proposal grows out of the FirstEnergy House Bill 6 investigation, where for a prolonged time, FirstEnergy’s corporate separation plan was out of compliance with these rules. This lack of compliance included training failures, missing records and failure to promptly fill the position of chief compliance officer. Once again, the need for this rule is obvious. Requiring the utility’s chief executive officer and chief financial officer to certify compliance will force each utility to treat these rules more seriously and to make compliance a top priority.”

Northeast Ohio Public Energy Council (NOPEC) – “While FirstEnergy’s unlawful and corrupt conduct was a blackeye for an Ohio, it shed light on ways the Commission’s regulation of electric distribution utilities (“EDUs”) and their affiliates can be improved. The Commission should take the opportunity to strengthen the corporate separation rules to prevent the types of unlawful and anticompetitive activities committed by FirstEnergy as found in the Corporate Separation Case from ever happening again.

To protect the competitive marketplace and ratepayers from unlawful conduct, NOPEC requests that the Commission revise the corporation separation rules to expressly do the following:

• Prohibit unregulated competitive affiliates of EDUs from using service company employees or executives that perform work for the EDUs.
• Explicitly prohibit the practice of “warm transfers” from the EDUs and/or services company to any unregulated EDU affiliate.
• Require the unregulated competitive affiliates to be completely structurally separated from the EDU and the service company that serves the EDUs.
• Prohibit unregulated competitive affiliates from using the name and branding of the EDU (e.g., “FirstEnergy” or “AEP”).”

Retail Energy Supply Association (RESA) and Interstate Gas Supply (IGS).  “The Commission should establish a rule that requires periodic corporate separation audits for each electric distribution utility. Specifically, RESA and IGS recommend that these audits be staggered to occur every 4 years such that each year one EDU has an audit proceeding.”

“The Commission should modify the conduct provisions in Ohio Adm.Code 4901:1- 37-04(D) and cost allocation provisions of Ohio Adm.Code 4901:1-37-08 to address the competitive advantages the incumbent monopoly electric utilities have with respect to data access. Revising these rules is critical as while RESA and IGS believe that the monopoly electric utilities should not offer products and services available in the competitive marketplace, electric utilities continue to make competitive product and service proposals while having asymmetric access to customer data.

Specifically, the Commission should clarify that the corporate separation rules prohibit the regulated monopoly distribution service function from sharing nonpublic data with their affiliates unless they make the same data available to CRES providers. For purposes of these revisions, it is important to note that the Commission’s rules have, and continue, to define an internal business function of an electric utility that offers a competitive product or service as an affiliate for purposes of compliance with the corporate separation rules.”

“Examples of where this asymmetric data access have come up in recent years includes: (1) AEP Ohio engaging in a partnership with Bloom Energy to offer onsite fuel cell solutions to data centers while the load growth associated with data centers was not yet made public, (2) post termination of the statutory EE/PDR mandates electric utilities proposing in ESP or stand-alone cases energy efficiency and active demand management programs based on customer data not available to CRES providers, and (3) post elimination of ESPs, electric utilities proposing active demand management programs based on customer data not available to CRES providers.”