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The Public Utility Commission of Ohio issues an order adopting proposed rules regarding mercantile customers, as required by Substitute House Bill 15 to effectuate requirement that mercantile customers be returned to their local electric distribution utilities’ standard service offer within 3 business days of requesting to do so.

Changes to the Ohio Administrative Code will be submitted to the Joint Committee on Agency Rule Review before becoming effective.

As background, “[o]n May 15, 2025, Governor DeWine signed Substitute House Bill Number 15 (Sub. HB 15). Among other items, Sub. HB 15 adopted two new sections to the Ohio Revised Code, R.C. 4928.73 and 4928.105.1 Specifically, R.C. 4928.73 will allow for the creation of mercantile customer self-power systems, which provide electric generation service to one or more mercantile customers, and requires the Commission to adopt rules applicable to electric distribution utilities (EDUs) to implement the new statute. Additionally, R.C. 4928.105 requires the Commission to establish rules governing the process for an expedited return to an EDU’s standard service offer (SSO) and permitting EDUs to recover the administrative costs of processing such requests through reasonable fees assessed to competitive retail electric service (CRES) providers.

“By Entry dated November 19, 2025, the Commission directed all interested persons or entities to file comments by December 19, 2025, and reply comments by January 9, 2026.”

Specific findings from the order include:

 Ohio Adm.Code 4901:1-10-01 (Definitions)

{¶ 9} “No comments were received regarding Staff’s proposed changes to definitions in Ohio Adm.Code 4901:1-10-01. Thus, the Commission determines that Staff’s proposed additions to the chapter’s definitions, as reflected in the attached appendix, be adopted.”

Ohio Adm.Code 4901:1-10-36 (Expedited Return)

Three-Day Requirement “Regardless Of Billing Cycle”

 {¶ 11} “RESA argues that the statutory three-day requirement necessarily requires returns to be processed without regard to billing cycles. RESA asserts the Commission lacks authority to introduce exceptions based on operational constraints and that “complete” must mean fully switching the customer to the SSO within three business days.”

{¶ 12} “As RESA correctly observes, the General Assembly established a firm three-business-day deadline without qualification or exception. The statute does not authorize EDUs to delay the effective switch to align with meter-read schedules, nor does it create a dual standard in which an administrative acknowledgment could satisfy the statutory requirement while the customer continues to take competitive supply service. Rather, the statute requires that the EDU “complete the request within three business days.” Indeed, nothing in the statute permits the Commission to provide additional timing allowances based on billing cycles or operational preferences. Furthermore, interpreting “complete” to mean only internal administrative acceptance— rather than an actual return of the customer to SSO service—would undermine the statutory purpose and produce a three-day requirement for customer return that does not actually return the customer within three days. The ordinary meaning of the term “complete” and the overall structure of R.C. 4928.105 insist that this rule creates a true expedited return mechanism.”

EDU Verification Of Certain Customer Agreement Information

“Under the adopted rules, an EDU’s responsibility is limited to verifying that the certified request is complete on its face and that the customer is a mercantile customer. Beyond these checks, the EDU is entitled to rely on the CRES provider’s certification, and the EDU shall process the expedited return within the statutory three-business-day period. Any disputes regarding contractual authorization, voluntariness, or notice adequacy are properly resolved between the supplier and the customer, or before the Commission pursuant to existing complaint or enforcement procedures.”

Administrative Cost Recovery

{¶ 19} “The Commission finds that RESA’s position is consistent with both the statutory language and the appropriate procedural framework for establishing cost-recovery mechanisms. R.C. 4928.105(C) provides that EDUs “may recover the administrative costs of processing requests…through reasonable fees assessed to competitive retail electric service providers.” However, it does not prescribe, define, or classify the categories of recoverable costs, nor does it require the Commission to do so in this rules case. The Commission agrees that an ATA proceeding is the proper venue for determining what specific administrative costs are recoverable, how those costs are calculated, how resulting fees should be structured, and how such fees should be incorporated into each EDU’s tariff. These issues are fact-specific and vary by EDU; they cannot be resolved generically within this rulemaking without risking over- or under-inclusiveness. Further, an ATA case will permit full development of the evidentiary record, stakeholder participation, and Commission review of whether a proposed fee represents the “reasonable” recovery authorized by statute.”

Ohio Adm.Code 4901:1-10-37 (Mercantile System)

Virtual Net-Metering

 {¶ 25} “We agree with AEP that reading Ohio Adm.Code 4901:1-10-37 without context could seem to allow virtual net metering, thus requiring an EDU to accept it. But as AEP persuasively explains, the provision cannot be read in isolation. Indeed, the authorizing statute, R.C. 4928.73, prohibits the practice. The relevant definition of mercantile customer self-power system, found in R.C. 4928.73(A)(2)(c), defines a mercantile self-power system as “one or more electric generation facilities, electric storage facilities, or both, along with any associated facilities, that [d]eliver[s] electricity to the mercantile customer member’s side of the electric meter without the use of an electric distribution utility’s or electric cooperative’s distribution system or transmission system.”

“As part of this proceeding, Staff proposes to amend Ohio Adm.Code 4901:1-10-01 to incorporate that definition into the rule chapter. Such a system cannot, by definition, include a system operating with virtual credits for power generated elsewhere. The reader of the rule, seeking to understand and comply with it, must seek the definition for the self-power system. No reasonable interpretation of Ohio Adm.Code 4901:1-10-37, read in conjunction with the definition of “mercantile customer self-power system” contained in R.C. 4928.73(A)(2) and incorporated into the regulatory definitions with Staff’s proposed changes to Ohio Adm.Code 4901:1-10-01, would lead one to understand an EDU as obligated to accept a program allowing a mercantile customer receiving behind-the-meter generation credits for power generated elsewhere. We find that no more safeguards than a definitional exclusion are necessary, and thus, we decline the invitation to include other explicit prohibitions. [Emphasis added.]

 “Generation”

{¶ 29} “RESA urges the Commission to delete the word “generation” from proposed Ohio Adm.Code 4901:1-10-37(C). According to RESA, “generation” in this context creates uncertainty as to whether the rule references behind-the-meter generation from the mercantile self-power system or standard billing for retail electric generation service. Thus, RESA wants clarifying language indicating that the rule is not referring to generation from the mercantile self-power system.

{¶ 30} While the Commission appreciates RESA’s concern and acknowledges that the statutory language is not perfectly mirrored in the proposed rule, the Commission finds that removal of the term is unnecessary. The rule does not impose any new or additional generation-related billing obligations on mercantile customers, nor does it alter the statutory prohibition against cost-shifting or the treatment of behind-the-meter generation under R.C. 4928.73. Rather, the reference to “generation” reflects existing billing practices, including consolidated billing arrangements, and does not expand the scope of an EDU’s authority to charge for services beyond what is already permitted by statute or tariff. Because the term, as used in the rule, is neither misleading nor inconsistent with the overarching statutory framework, the Commission declines to adopt RESA’s proposed deletion.

{¶ 31} Accordingly, the Commission adopts Ohio Adm.Code 4901:1-10-37 as proposed, without any additions or deletions.”

Ohio Adm.Code 4901:1-21-21 (Certified Requests for Expedited Return)

Certified Request Form

{¶ 34} “[T]he Commission finds merit in the first of FirstEnergy’s proposals. Ensuring that the certified request form is made publicly available prior to implementation and agrees that permitting use of an EDI transaction, where appropriate, should facilitate timely and accurate processing of expedited return requests. However, the Commission declines to adopt FirstEnergy’s proposed language requiring pre-payment of administrative costs at the time a certified request is submitted. As RESA correctly notes, EDUs do not currently invoice such fees at the time of submission, and there is no proposal for a practical mechanism by which a supplier could pre-pay before receiving an invoice or charge. Moreover, conditioning a certified request on pre-payment would 25-741-EL-ORD -13 – introduce administrative steps inconsistent with the statutory three-business-day completion requirement and is therefore inappropriate in this rulemaking. For these reasons, the Commission adopts FirstEnergy’s clarification regarding form availability and EDI submissions but declines to incorporate the proposed pre-payment requirement into Ohio Adm.Code 4901:1-21-21(A).

{¶ 35} For these reasons, Ohio Adm.Code 4901:1-21-21(C) is adopted with the clarification that the certified-request form will be published for review and comment prior to implementation and that an EDI-based submission will be accepted as an equivalent means of compliance. The Commission directs Staff to publish the certified-request form in advance of publication of the final rule, and solicit stakeholder feedback before finalizing the form. In addition, consistent with comments from both FirstEnergy and RESA, the Commission finds it reasonable to allow the certified request to be submitted either on the Commission-approved form or via an equivalent EDI transaction, thereby facilitating operational efficiency and minimizing the potential for manual-entry errors.”

Seven-Day Notice Requirement

{¶ 36} “RESA asks the Commission to eliminate the seven-day notice requirement in proposed Ohio Adm.Code 4901:1-21-21(B), arguing it conflicts with the three-day processing requirement in R.C. 4928.105. AEP disagrees, contending that the notice requirement is unrelated to the three-day expedited return requirement. Duke, wanting as much advance notice as possible for the return requests, seeks an amendment including EDUs in the group of notice recipients.

{¶ 37} While RESA argues that the proposed seven-day notice period impermissibly expands the statutory three-day expedited return requirement, the Commission agrees with AEP that the notice provision is distinct from, and does not conflict with, the statutory mandate in R.C. 4928.105(A). The statute governs the timeframe within which an EDU must complete an expedited return once it receives a certified request; it does not speak to the notice that must occur before a CRES provider submits such a request. As AEP explains, the seven-day notice requirement does not alter the EDU’s three-day obligation and instead functions as a reasonable, pre-submission communication between the supplier and customer. The Commission therefore finds no statutory conflict and retains the notice requirement. The Commission also finds merit in Duke’s proposal to include the EDU as a notice recipient, recognizing that advance awareness may assist EDUs in preparing to process expedited returns without delaying the statutory switching timeframe. Accordingly, Ohio Adm.Code 4901:1-21-21(B) is adopted with the addition of “and EDU” to ensure both the customer and the EDU receive timely notice prior to submission of a certified request.