Four years after The Dispatch put a spotlight on companies that mark up the costs of electricity and water in apartments and condominiums, nearly every aspect of this business model remains legal.

Some consumers say they feel betrayed by state policymakers who have done little or nothing. Many other consumers have little or no idea what is happening.

"Whatever I do, I get slapped in the face," said Frank Clager, 75, who gets electricity at his Far North Side condominium from one of the utility middlemen.

But there was one notable change in 2017 that is helping the more than 28,000 customers served by these companies. The Public Utilities Commission of Ohio ruled in June that utility resellers — often called "submeter" companies — can charge no more for electricity than a household would otherwise pay to a regulated utility, with some exceptions.

Almost immediately after the PUCO action, customers served by American Power & Light saw several charges vanish from their bill, a monthly savings of about $10 to $18, based on bills reviewed for this story. American Power declined to comment.

Another prominent submeter company, Nationwide Energy Partners, did not need to change its pricing because its practices already were in line with the PUCO order.

And yet, consumer advocates and officials for regulated utilities say the commission didn’t go far enough. American Electric Power, the Columbus-based regulated utility, calls these companies "imitation utilities" whose names are designed to confuse and whose practices would be illegal in most states.

"Our call center gets calls all the time from (American Power & Light) customers because they think it’s us," said Marc Reitter, vice president for regulatory and finance at AEP Ohio. "When we tell them that’s a different company, they don’t understand."

Among the concerns:

• Submeter customers do not have the option to shop for an alternative supplier for electricity; in contrast, customers of the regulated utility can shop for other suppliers and might save money by doing so.

"I don’t think it’s fair what's happening to the residents here that they don't have options," said Ralph Cantore, 27, a resident of Olentangy Commons on the Northwest Side. He is one of the lead plaintiffs in a proposed class-action lawsuit against Nationwide Energy that was filed by Mark Whitt, a Columbus attorney, and others.

• While submeter customers cannot shop, submeter companies can use the shopping system to get lower prices for themselves. Apartment-complex owners sometimes get a cut of the savings, with no requirement that they pass some on to customers.

This is galling to consumers such as Cantore, whose property owner, Crawford Hoying, splits the savings 50-50 with the submeter company, according to a 2010 contract made public in the lawsuit. Crawford Hoying declined to comment.

• Regulated utilities must meet state standards for quality and reliability of service, while submeter companies have no such rules.

Araceli Vences, who lives in the Dublin area, complained to the Ohio attorney general's office because of a long wait for her submeter company to fix an outage. "That company is all about themselves, not the consumer," she said.

• The PUCO order does not address markups on water service for consumers who otherwise would be served by city-run utilities. This leaves out the many customers in the central Ohio territory of Columbus' city water service.

• Submeter customers are not eligible for low-income utility-assistance programs such as PIPP Plus, even though the customers pay rates that include the charge that finances the programs. In Franklin County, low-income aid is administered by Impact Community Action, and officials there say they often are in the difficult position of telling customers they are not eligible.

"Unfortunately there is nothing we can do," said Latisha Chastang, the agency's director of emergency assistance. "It's actually pretty frequent, especially during the winter months. We find it to be an ongoing issue."

Customers unaware

Almost everything about this situation should be an embarrassment to elected officials and regulators who continue to let it happen, said Rep. Mike Duffey, R-Worthington. He has sponsored several bills that seek to rein in the practices; none of those bills have gotten far in the legislature.

"People should be completely outraged," he said.

But there is little evidence that a large number of consumers are upset. For instance, the PUCO has logged just 63 complaints and inquiries about submetering since June, according to records from the office's call center.

The underlying problem is that people don't understand what's happening because of the complexity of utility rates, said Joe Maskovyak, fair-housing coordinator for the Coalition on Homelessness and Housing in Ohio.

"The consumer, for one, has to figure out they’re getting screwed," he said.

Several consumers interviewed for this story say their greatest frustration is that they don't fully understand what is happening. "I think it would be nice if everything were clear," said Charlie Michaels, a condominium owner on the Far North Side.

Nationwide Energy and American Power are the two largest companies that use this model of utility markups. The two serve a combined 28,306 households in AEP's Ohio territory, most of which are in central Ohio, according to AEP. Nationwide Energy, with offices in the Arena District, is the larger of the two, with 17,539 households; American Power, with offices in Westerville, has 10,767 households.

Each company shares ownership with prominent developers of multi-family housing and serves the units developed by the related companies, along with unrelated clients. Nationwide Energy is owned by the people who also own Lifestyle Communities, and American Power is owned by the people who also own Ardent Communities and Village Communities.

Tenants say the connection between the developers and submeter companies is not clearly disclosed.

'Imitation utilities'

AEP officials say it is inexcusable that the problems with submetering have been widely known for years, yet little substantive action has been taken.

"They skirt the very rules that we as regulated utilities have to play by," Reitter said.

He repeatedly uses the term "imitation utility" to describe companies such as American Power and Nationwide Energy because he thinks "submeter company" is not an accurate way to describe these businesses.

A traditional submeter business model has been around for decades; under it, companies essentially are a billing service that charges a few dollars for each bill. In contrast, American Power, Nationwide Energy and others rely on markups on the cost of electricity and water.

How much is the markup? The companies won't say, but the nonpartisan Ohio Legislative Service Commission analyzed the differences in costs based on publicly available data and found a "bulk savings discount" of 25 percent. This example is based on a hypothetical 350-unit apartment complex in central Ohio.

The commission says it asked Nationwide Energy for information to better illustrate the cost differences, but the company declined to help other than to provide generalities about its business model that could not be verified.

Gary Morsches, Nationwide Energy's CEO, says criticism of his company is baseless. He calls out Whitt, the attorney who is working on the proposed class-action lawsuit and has several complaint cases before the PUCO.

"AEP Ohio and utility advocate Mark Whitt are waging a war to restrict property rights and suppress energy-saving innovations that benefit consumers," Morsches said in an e-mail. "NEP continues to apply, on behalf of its property-owner customers, the same electricity rate as the local host utility residential rate, and at some communities, the rate applied is less."

He added, "NEP’s services are a gateway to real energy innovation and efficiency in Ohio. We provide property owners the ability to meter for electricity via a smart meter for each separate unit. This network of smart meters creates a smart-metered microgrid, which provides greater flexibility, access to innovations and control over electricity generation and use."

Lacking consensus

The Dispatch's 2013 report mainly looked at how submeter bills compared with regulated prices for households, and it found that consumers were paying 5 to 40 percent more for service. The comparison was straightforward, using copies of bills and looking at what the regulated price would be for the same usage.

The bulk-buying discounts spotlighted by the Legislative Service Commission are at the wholesale level and not visible to consumers.

As lawmakers and regulators look at the markups, their focus has been on the simple comparison of customer bills, with almost no scrutiny of the underlying business model.

The PUCO opened its investigation in 2015. The result was the June ruling that submeter companies can charge no more than a customer would pay to the regulated utility, with exceptions. Those exceptions include charges for electricity in common areas such as hallways, and a broader exception that allows occasional price gaps.

Nationwide Energy had phased out its extra charges on bills over the prior few years, so the company did not have to change its practices as a result of the PUCO order.

It was a different story for American Power. Based on dozens of bills reviewed by The Dispatch, customers were paying a monthly fee of $10 to $11 that was listed as "distribution recovery," plus a separate charge of $6.75 listed as "service charge." These charges were in addition to a base rate that was the same as the regulated price for a household.

After the PUCO order, American Power immediately halted the two charges. This adds up to an annual savings of about $200 per housing unit for the bills examined. If these bills are representative of the company's full customer base, the overall savings is $1 million to $2 million.

"We are well aware ... that this is not a full and complete fix of the submetering issue," PUCO Chairman Asim Haque said in a recent interview. "For a full and complete fix, we would need some guidance from the General Assembly."

In other words, he thinks the PUCO has done as much as is allowed under state law.

"We tried to take care of, from a policy perspective, the primary issue, which was price gouging," Haque said.

Duffey, the state legislator, has been one of the harshest critics of the PUCO action, which he describes as "just window-dressing" because it does not address the underlying business model.

He also worries that the General Assembly will ultimately pass something that appears to be consumer-friendly but has the effect of codifying harmful practices. For instance, he is leery of any proposal that includes a ban on local governments making their own rules governing submetering.

Brad Miller, a spokesman for House Speaker Cliff Rosenberger, R-Clarksville, had this statement:

"As the debate over submetering in recent years has illustrated, there has not been a consensus opinion on what, if anything, should be done legislatively," he said. "However, we do recognize the helpful steps that PUCO has taken to establish some standards for the industry, as well as companies like NEP that are changing its business practices to consumers’ benefit at the behest of property owners."

Two bills on the subject are pending, but there is little evidence that either has a chance of passing.

Meanwhile, the PUCO is still considering whether to revise any aspects of its June decision, which is a normal part of the process on a major case. The commission also is reviewing a complaint case from a consumer advocate, the Office of the Ohio Consumers' Counsel, that is seeking more protections for submeter customers in AEP territory.

In the background, the proposed class-action lawsuit remains active, with no indication of its likelihood of success.

Taken together, all this means there is a chance that consumers will see changes, but also a strong possibility that nothing will be different at this time next year.