The word "submeter" entered the vocabulary of Ohio lawmakers three years ago, followed by proposals to rein in companies that mark up the cost of utilities at apartments and condominiums. But nothing passed, and customers continue to pay the price.

The word �submeter� entered the vocabulary of Ohio lawmakers three years ago, followed by proposals to rein in companies that mark up the cost of utilities at apartments and condominiums.

But nothing passed, and customers continue to pay the price.

�They chose to do nothing,� said Carolyn Myers, 74, of Delaware, who is in one of an estimated 30,000 households, mainly in central Ohio, who are locked into this system.

�We�re a captive audience,� she said. �We have no choices.�

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Public records tell the behind-the-scenes story of how submeter companies � businesses that act as middlemen between utility providers and end users � managed to fend off attacks by hiring top lobbyists and following up with big campaign contributions. It helped to maintain a business model that would be illegal in most states.

At the same time, submeter firms have changed some of the practices that came to light in a 2013 Dispatch report. Notably, the companies no longer are evicting consumers who are behind on utility payments, according to municipal court records.

Nationwide Energy Partners, a Columbus submeter company, has eliminated some of the extra fees it used to charge, so its bills are often about the same as consumers would have paid to a regulated utility like American Electric Power.

The same is not true of American Power & Light, a Westerville submeter company, whose bills are often 30 percent more than regulated prices, based on recent bills submitted by customers.

How many people are affected? Right now, about 30,000 households in AEP Ohio territory are served by these types of submeter businesses, according to AEP. That is a leap from 2013, when the number of households was roughly 20,000, indicating that submeter companies are serving many newly built apartments and condominiums.

>> Dispatch special report: The shocking cost of utility �submeter� bills

Any changes made by the companies have been voluntary because the Ohio General Assembly has been unable to agree on how to change the law.

�One way or another, companies can basically write bills, and they do,� said Mike Smalz, an attorney for the Ohio Poverty Law Center. �Companies have a right to press their case. The problem is that it�s not transparent.�

In the trenches

Lawmakers had three competing proposals in early 2014, each with different approaches.

Among them was a bill from Rep. Anne Gonzales, R-Westerville, who she said was inspired to take action because of consumers who reached out to her office with complaints about being overcharged by submeter companies.

However, the content of her bill raised red flags for consumer advocates such as the Ohio Poverty Law Center. The measure seemed to codify the submeter companies� business model, and provide meager benefits for consumers, advocates said.

Additionally, the presence of her bill, along with the two others, created enough congestion so that none of the measures could gain enough support to pass, according to legislators who were involved.

�Her bill was the worst, the least consumer-friendly and the most industry-friendly,� said former Rep. Mike Foley, a Cleveland Democrat, who had a rival bill on the topic co-sponsored by Rep. Terry Blair, R-Washington Township.

A sponsor of a separate proposal, former Rep. Ross McGregor, R-Springfield, said, �Quite frankly, Anne�s bill is what the industry came up with.�

He wrote his bill in response to legislative staff members who told him that they were stuck paying inflated prices at their Columbus apartments. �I had people saying, �Oh my god, I�m a victim of this,� � he said.

Gonzales disputes the idea that industry wrote her bill. �I legislate based on constituent concerns,� she said.

However, public records obtained by the Dispatch show that McGregor and the other critics were on to something. A lobbyist connected to submeter companies had emailed Gonzales with suggested bill text, large passages of which ended up in her bill.

�As requested,� said a March email containing the suggested language, sent by a colleague of lobbyist Matthew Kallner to a Gonzales staff member. �Please let me know if you have any questions. Have a great weekend!�

Gonzales submitted the text to legislative staff members to use as the basis of the bill. In April, when staff members had a list of questions about the bill�s details, Gonzales forwarded to her assistant with this message: �Send to Matt Kallner.�

Some background: Kallner�s clients are some of the largest and most influential companies in central Ohio. That includes Lifestyle Communities, a Columbus-based developer of multi-family housing whose CEO is also co-owner of Nationwide Energy Partners.

Gonzales says her bill was the result of meetings with a variety of interested parties. At the conclusion of one of the meetings, Kallner volunteered to write a draft of what had been agreed upon, she said.

�Matt said, �Why don�t I just sum this up and I�ll send this over to you,�� Gonzales said. �He had offered, �Why don�t I type up the talking points.��

Asked about it late last month, Kallner said this:

�Members of the General Assembly, including Rep. Gonzales, have sought (Lifestyle Communities�) input into drafting legislation around submetering,� he said in an e-mail. �Lifestyle Communities chooses to use submetering because it offers cost effective investment surrounding utility equipment installation and provides opportunities for energy efficiency for its tenants.� He added that the company supports �common sense regulations.�

Additional influence

Kallner was just one of the submeter companies� well-connected supporters.

American Power & Light is part of a group of companies owned by Donald R. Kenney, a developer and donor to Republican candidates. The lobbyist for American Power & Light is Michael Gonidakis, who is also president of Ohio Right to Life.

Underscoring the prominence of Kenney and Gonidakis, both are consumer members of the Ohio Medical Board and appointed by Gov. John Kasich. The panel oversees the licensing of medical professionals.

Nationwide Energy had its own lobbyists: Eric Weldele, a former chief of staff for the Public Utilities Commission of Ohio; and Shawn Kasych, a recent former legislative staff member who has since gone back to the staff and serves as policy director for Ohio House Speaker Cliff Rosenberger, R-Clarksville.

The combination of all this firepower meant that lawmakers faced a coordinated campaign that sought to downplay or refute criticism of the submeter industry, and promote the notion that submeter companies were business innovators.

Meanwhile, Gonzales received some big contributions from people connected to submetering. In 2014, her top individual donor was Kenney, with $8,000, followed my Mike DeAscentis, top executive of Lifestyle Communities and co-owner of Nationwide Energy, with $6,988.40, according to campaign finance records. The two men had given to her before, but never more than $1,000 in any year.

Gonzales said there is no connection between the donations and her actions on the bill. �Don Kenney donates to me all the time. Has nothing to do with legislation,� she said, adding, �I don�t keep track of who donates to me.�

Foley and McGregor are no longer in the House because of term limits. Blair died in office in June 2014.

The only current lawmaker, other than Gonzales, to show much of an interest in the topic is Rep. Mike Duffey, R-Worthington. He says he was upset that a strong bill did not pass in 2014, and he thinks the issue is a black eye for central Ohio, which is where most of this type of submetering is happening.

�I feel very strongly that for submetering to exist in Ohio at all, it must offer something of value to consumers beyond what they get from the traditional utility,� he said. He is working on a bill on the subject.

Following lawmakers� inaction in 2014, critics of submeter companies have turned their attention to other venues, with a formal complaint before the Public Utilities Commission of Ohio and a proposed class-action lawsuit in Franklin County Common Pleas Court.

Gonzales says she remains engaged on the issue and hopes to find a way to protect consumers. When told about the findings of this story last week, she had this e-mailed response:

�Whether it be introducing legislation or voting on a proposed legislation my actions as a legislator are in no way guided or influenced by lobbyist or campaign contributions as such that has always been, and will continue to be, the way I conduct myself as a public official.�

dgearino@dispatch.com

@dangearino