Ohio Standard Service Offer: How the Default Rate Is Set

What is the standard service offer in Ohio?

Standard service offer (SSO). As PUCO's glossary defines it: "The electric generation service a customer will receive from their local electric utility if they do not choose an electric supplier."

The law makes this a duty. Section 4928.141 of the Revised Code says an electric distribution utility must offer every customer in its territory a standard service offer, including a firm supply of electric generation. An electric distribution utility is one that delivers power but owns no generating plant. PUCO calls it the default rate for generation supply for a customer who decides not to shop.

The standard service offer is also the safety net. If a supplier fails, section 4928.14 says its customers default to the utility's standard service offer after reasonable notice. They stay there until they choose another supplier.

The Revised Code calls what a supplier sells competitive retail electric service (CRES). You will also see the term CRES provider for a supplier.

It covers supply only. Delivery stays with your utility. PUCO says municipal and cooperative utilities are not regulated by it and do not take part in energy choice. Natural gas has separate defaults, such as the Standard Choice Offer (SCO), explained on the natural gas rates page.

How did Ohio come to set the default rate by auction?

Through two laws. Senate Bill 221, effective July 31, 2008, let a utility set its default rate by competitive bidding or through an electric security plan, and House Bill 15, effective August 14, 2025, made competitive bidding under section 4928.142 the only route for a new offer.

The 2008 law also said a utility's first application had to include a security plan filing. It said that a utility owning generating plants on July 31, 2008, whose first market-rate offer was approved, had to phase bidding in over five years, from ten percent of its load in year one to fifty percent in year five. The table shows the dates.

House Bill 15 changed this in 2025. Section 4928.141 now says a standard service offer is authorized under section 4928.142 only. A security plan approved before the change continues until a standard service offer is authorized, and it ends after the last auction delivery period that PUCO had approved under the plan.

Auctions were not limited to market-rate offers. AEP Ohio's site says PUCO's order on its second security plan required auctions beginning June 1, 2015. The AES Ohio and FirstEnergy auction sites say their auctions run under electric security plan cases.

Who sets the standard service offer, and how does an auction work?

The utility proposes, an independent party runs the bidding, and PUCO decides. Sections 4928.141 and 4928.142 set the steps.

1. The utility files an application with PUCO. PUCO sets a hearing and publishes notice in a newspaper in each county of the territory.
2. PUCO has ninety days to decide whether the utility and its market-rate offer meet three conditions. They are grid membership or comparable access, a market monitor, and a published source of forward power prices.
3. An independent third party designs and runs the bidding. It must be open, fair and transparent, with clear products and standard bid evaluation, and no generation supplier may be barred.
4. PUCO selects the least-cost winners. Their bids become the standard service offer unless PUCO finds, before the third calendar day after bidding ends, that one of the bidding checks below was not met.
5. Those checks are: each portion must draw more supply than the load offered, four or more bidders must take part, and bidders other than the utility must bid on at least a quarter of the load.
6. The utility recovers its auction and supply costs through the standard service offer price, using a reconciliation mechanism PUCO approves.

PUCO's own summary puts it more simply. The default rate is built mainly from the average price won at auction, with bypassable riders that PUCO approves and administration fees making up the rest. A bypassable rider is a charge you stop paying if you choose a supplier.

All four auction sites describe the same format, a descending-price clock auction. The auction manager announces a price. Bidders say how much supply they will provide at it. The price falls round by round while more supply is offered than the load needs.

Winners take on full supply obligations for the customers in that auction. Supply for customers in the Percentage of Income Payment Plan (PIPP) is bought through a separate request for proposals. PUCO says the auctions help reduce variability in electricity prices over time.

You can read the results yourself. Each utility's auction site lists past auctions with the number of registered bidders and rounds. It also posts a calendar of coming auctions. PUCO's page links to all four sites.

How do the auctions differ from one Ohio utility to another?

Each utility buys its own supply on its own schedule. AES Ohio's supply page says each utility has a different date for its auction.

AEP Ohio's auction site says it buys through eight auctions, generally in November and March. They run over its current security plan, June 1, 2024 through May 31, 2028. The products last 12, 24 or 36 months, and delivery starts each June 1. The three FirstEnergy utilities share one auction process.

Because AEP Ohio buys through several auctions and several product lengths, the supply behind its default rate was bought at more than one time. PUCO says the average auction price is the main component of the default rate. So the timing of each utility's auctions matters.

The last column shows the period PUCO's chart states for each utility today. PUCO's charts do not all use the same period, so one utility's rate can change while another's holds.

Utilities also describe the price to compare in their own words. FirstEnergy says it is your bypassable generation and transmission related component divided by the kWh used in the month. PUCO's chart says AES Ohio's figure is an annual weighted average.

The riders inside the default rate differ by utility, so read your utility's tariff for the detail. To find yours by ZIP code, use the price to compare lookup.

How does the price to compare relate to the standard service offer?

The standard service offer is the service, and the price to compare is its per-kWh benchmark. The glossary on PUCO's Energy Choice Ohio site calls the price to compare "the price for an electric supplier to beat" and says it will be shown on a residential customer's electric bill. PUCO also says it is the amount per kWh you stop paying your utility if you choose a supplier.

Ohio's bill rule requires a price-to-compare notice on residential bills. PUCO's charts describe the figure as the price for the generation supply portion of your bill. So a supplier's offer is compared with supply alone. The price to compare page lists the current figure, its reset date and where it sits on a bill.

Do you have to do anything to stay on the standard service offer?

Usually you stay by doing nothing. The exception is opt-out aggregation: if your community forms an aggregation program, you are enrolled with its supplier unless you opt out by the stated procedure, as section 4928.20 sets out. You can come back to the standard service offer later, and PUCO says either your supplier or your utility can arrange it. Check first for an early termination fee, a charge for ending a supplier contract early.

Staying can make sense when, after you add each offer's fees, nothing on the Apples to Apples chart, PUCO's list of supplier offers, comes in under your price to compare. It can also make sense when an offer's monthly charge or exit fee would wipe out a small difference. Some people stay because they do not want a contract end date to track.

If you are in PIPP Plus, PUCO says you are not eligible to shop. The help with electric bills page explains your options.

The Ohio energy choice page explains who can shop. The guide to how to switch electric supplier in Ohio covers the steps. If your bill is higher than you expect, see why your electric bill may be so high.