With passage of SB 221 in 2008, Ohio established the foundation for the full range of customer energy efficiency programs now available. This act called on utilities to develop electric efficiency programs to meet newly proposed energy and peak demand savings targets. This legislation also explicitly includes demand-response programs and transmission and distribution system improvements.
Ohio’s regulated distribution utilities administer their own energy efficiency programs with oversight from the PUCO. The PUCO may also modify the utilities' proposed programs. Ohio natural gas utilities also run efficiency programs. Under the PUCO rules, the electric utilities file their long-term forecasts and benchmark reports. Once the reports and forecasts are approved, the utilities may then apply to recover the costs of their energy efficiency programs.
Large customers have self-direct options. Under SB 221, a mercantile customer, which is a commercial or industrial customer that consumes more than 700,000 kWh per year, may enter into a special arrangement with an electric utility to integrate the customer’s demand reduction,demand response, or energy efficiency programs with those of the electric utility. If the specified reduction levels are met, the customer can request exemption from the cost recovery mechanism.
One of the state’s utilities, AEP, has a self-direct program that offers customers an incentive for previously implemented energy efficiency measures. The one-time incentive is 75% of what the measure would cost under AEP programs and has a maximum limit of $225,000. Projects must have been implemented after Jan. 1, 2008 and must produce 100% of stated energy savings and/or peak demand reductions over a five-year period. Customers taking the incentive are still eligible to participate in the utility's other energy efficiency programs because they are still paying the cost-recovery mechanism (CRM) fee.
Financing options also are available to customers. The Advanced Energy Fund, instituted in 1999, supports an Energy Efficiency Revolving Loan Fund that is administered by the state. A universal service rider, a type of surcharge, supports the Ohio Energy Loan Fund, providing low income bill assistance and efficiency incentives. The charge is $0.0001758 per kWh and adds up to $15 million per year to the fund.
The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.
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