Ohio poised to take a big step backwards with SB 310

Blog Post | April 09, 2014 - 1:34 pm
By R. Neal Elliott, Senior Director for Research

The state of Ohio is poised to take a major step backwards if its legislature enacts SB 310. The bill would gut what has been a successful energy efficiency policy that has saved ratepayers hundreds of millions of dollars so far, and would save even more in the future. The passage of SB 310 would set a very bad precedent, and would lead to higher electricity bills and electricity rates for customers.

Last year ACEEE analyzed the impacts of Ohio’s current energy efficiency policy and found that the state’s utility energy efficiency targets (established under the bipartisan legislation SB 221 in 2008) would save customers a total of almost $5.6 billion from avoided energy expenditures and reduce wholesale energy and capacity prices through 2020. Today ACEEE released a report that takes a look at state energy efficiency resource standards [no-glossary](EERS)[/no-glossary] around the nation, which finds very positive to-date results for Ohio. The report documents that through 2012, Ohio’s utility efficiency programs have achieved over 150% of the savings targets set in SB 221, saving customers even more than projected. Based on evaluations filed with the Public Utility Commission of Ohio, these energy savings have come at a fraction of the cost of new generation. Another recent ACEEE report found the cost of utility energy efficiency programs averages about 2.8 cents per kilowatt hour—2 to 3 times less than new generation.

The fact that efficiency is a good deal for ratepayers should not be news to Ohio or its utilities. Last month, AEP Ohio released its 2015 To 2019 Energy Efficiency/ Peak Demand Reduction (EE/PDR) Action Plan , which projects a lifetime cost of saved energy of $0.013/kWh. The plan projects total net benefits of about $1.5 billion for AEP Ohio customers, who would save over $1.60 for every program dollar.

SB 310 would effectively put an end to the energy efficiency resource standard that has resulted in such impressive savings in Ohio. If the bill goes forward, utility customers across the state would pay more for electricity. That might enhance utility profits, but it would be bad news for consumers and the Ohio economy.