ACEEE debunks the myths behind the Ohio bill that would gut efficiency programs

Blog Post | April 22, 2019 - 1:48 pm
By Annie Gilleo, Senior Manager, State Policy

As the Ohio state legislature holds a hearing tomorrow on a bill that would effectively gut the state’s energy efficiency programs, we want to explain why the bill's special interest supporters are flat out wrong.

House Bill 6 would establish a “Clean Air Program Fund” to support Ohio’s aging nuclear fleet while simultaneously rolling back the state’s energy efficiency and renewable energy standards. It would effectively saddle customers with the bill for expensive power plants while eliminating options to control how and when they use energy. Unfortunately, the bill is based on a faulty understanding of energy efficiency. The arguments for the bill simply don’t add up.

MYTH: The Clean Air Program would save customers money.

HB 6 adds a monthly charge to customers’ bills to fund the Clean Air Program, ranging from $2.50 for residential customers to $2,500 for large commercial and industrial customers, but it provides no direct benefits in exchange. In contrast, similarly funded energy efficiency programs save customers money by reducing energy usage and keeping utility system costs down. In 2017, every $1 spent on energy efficiency programs created $2.65 in benefits for Ohio families and businesses. These benefits don’t accrue just for program participants. Instead, energy efficiency is an important low-cost resource for all customers. It helps everyone by keeping costs down. A study by ACEEE found Ohio’s energy savings goals could save customers almost $5.6 billion in avoided energy expenditures and reduced wholesale energy and capacity prices over 10 years of implementation.

MYTH: Energy efficiency is just a tax with no benefits.

Even beyond the utility sector, energy efficiency produces benefits for Ohioans. Efficiency improvements in buildings and industry decrease fossil fuel emissions and air pollution. The reduced emissions could help counties working to improve air quality meet national standards. A recent analysis shows that efficiency is a key tool for reducing emissions for three Ohio counties in particular: Jefferson, Lorain, Butler, and Hamilton. These pollution reductions also have significant impacts on the health of Ohio residents. In fact, ACEEE research found that Ohio is one of the states that could see the biggest health impacts from energy efficiency, saving up to $1.6 billion in avoided health harms. And efficiency is a major job creator in the state, employing almost 80,000 Ohioans. It accounts for 20% of all construction jobs and 24% of all energy sector jobs. HB 6 could completely erase these health and job benefits.

MYTH: We’ve already done enough when it comes to energy efficiency.

Ohio passed legislation in 2008 establishing energy savings goals, and utilities began implementing programs to meet them the following year. Since then, Ohio’s energy efficiency programs have saved enough energy to power every home in Ohio for more than 10 months. But there’s still a lot more to do. Not only have utilities’ own potential studies identified a clear pathway to meet the state’s current savings goals, ACEEE analysis highlighted additional savings opportunities, including emerging technologies and strategies to encourage additional customer participation. Instead of throwing in the towel, utilities should be exploring these emerging technologies and expanding outreach to underserved customers.

MYTH: Customers could still opt-in to energy efficiency programs if they want them.

The legislative proposal might seem to throw a lifeline to efficiency and renewable energy programs by allowing interested customers to opt back in. However, this proposal would be impossible to implement. A lot of work goes into preparing a multiyear plan for energy efficiency programs. Utilities need to plan budgets, timelines, objectives, and a whole host of operational details. The proposed legislation, which allows customers to opt-in at will, would mean utilities will have no idea what the size and scope of any programs should be, how many customers programs would cover, or the size of available budgets. It is just not possible to design and implement an effective energy efficiency portfolio under those circumstances, so it’s far more likely the programs themselves would cease to exist.

When the Ohio House hears testimony on HB 6 tomorrow, we hope legislators will take care to separate fact from fiction and protect Ohio’s energy efficiency programs.