New Ohio Senate Bill threatens to weaken energy efficiency policies

A bill that could weaken Ohio’s energy efficiency standards is currently pending in the Ohio Senate Public Utilities Committee.Sponsored by Sen. Bill Seitz, Substitute Senate Bill 58 would reform Senate Bill 221, which was passed in 2008 and set energy efficiency criteria for the four major investor-owned utility companies in Ohio.

The bill was created after Seitz determined that assumptions on which S.B. 221 was created were not correct, including the prediction that there would be an increase in energy demand that would necessitate more generation capability in Ohio. Because of this, Seitz and other proponents say that S.B. 58 will protect customers from increased energy prices.However, the bill has also received criticism from people who argue that, contrary to what proponents say, energy efficiency saves customers money.

Right now, S.B. 221 requires that by 2025, energy companies get 25 percent of their energy from renewable resources. It also mandates that they reduce their energy output through increased energy efficiency by 22 percent.The new bill would keep these requirements but alter annual energy efficiency benchmarks, “requiring a little less compliance in the near term in trade for a little more compliance in the years just before 2025,” according to Seitz’s sponsorship testimony to the Public Utilities Committee.

It will also allow the “largest and most energy-sensitive utility customers” to opt out of the energy efficiency programs, implement a cost cap on efficiency programs, and replace the requirement that half of the renewable energy must come from within Ohio to one that allows for all renewable energy to come from “sources deliverable and dispatchable into Ohio.”

Seitz, who declined an interview, said in his testimony that consumers are willing to give up energy efficiency for being free of government oversight.

“Virtually all large electricity users desire to be relieved of energy efficiency mandates, and since they are sophisticated energy consumers, they are willing to forego the benefits of EE Programs in return for being relieved of Mother Russia telling what they have to do.”

Meanwhile, supporters of the energy efficiency regulations like the American Council for an Energy Efficient Economy, who testified in favor of SB 221 on behalf of the Ohio Manufacturers Association, said that the cost of implementing energy efficiency programs is less than the cost of using more non-renewable resources.They also argued that while natural gas is both readily available and inexpensive, energy efficient programs are essential.

“Ohio’s utilities are generating energy efficiency savings at a levelized cost considerably lower than the levelized costs of new generation resources,” the ACEEE said. “While natural gas prices have reached historically low levels, and an abundance of shale gas has been found in the Marcellus and Utica Formations, neither of the phenomena preclude the need for investments in energy efficiency,” the ACEEE said.

According to Jack Shaner, deputy director and senior director of legislative and public affairs at the Ohio Environmental Council, energy efficiency helps consumer by keeping the wholesale cost of electricity down.

“It’s supply and demand. The more demand there is for power, typically the price of electricity is going to rise but counterbalance now energy efficiency. Energy efficiency...helps hold down how fast electric power costs will rise,” Shaner said. “Estimates are we will save billions of dollars, all customers right here in ohio, if we leave the standard alone.”

However, companies like FirstEnergy Corp., one of the four investor-owned utility companies in Ohio, argue that the cost of implementing energy efficiency programs in the future will increase to the point of being economically detrimental.

“Ultimately, the cost of these mandates will lead to fewer jobs and less growth,” FirstEnergy Corp. said in a Ohio Senate testimony.

But no matter which side of the argument someone agrees with, both have a long way to go before a decision is made on the bill.

“This is a battle that is just starting to spiral up and flare all of this year and maybe even into next year,” Shaner said. “So Ohioans need to be on alert and engage in learning about this debate and raising their voices both to their representatives in Washington D.C. and also the State House in Columbus.”