New Year Begins with Focus on Familiar Topic: Reforming Ohio’s Energy Efficiency Mandates

As the new year kicks off and legislators return to the Statehouse, an issue familiar to Ohio businesses remains unresolved: Ohio’s increasingly costly energy efficiency mandates. Senate President Larry Obhof publicly committed to a vote in January on legislation addressing Ohio’s energy mandates. With much of the debate continuing to focus on the renewable energy requirements, Ohio’s four electric utilities gained initial approval from the Public Utilities Commission of Ohio to implement energy efficiency programs, such as lighting rebates, that comply with the efficiency requirements also contained in Ohio law. Unfortunately, efforts over the several last General Assemblies to enact common-sense changes that would reform the energy efficiency mandates have been stalled in the Senate.

In March 2017, the Ohio Chamber testified in support of provisions in House Bill 114 that would make the energy efficiency mandates less burdensome by increasing what energy-saving activities count as compliance with the law and creating an opportunity for mercantile customers to opt out of the utilities’ broader programs. The House, intending to send a strong message after the administration’s veto of HB 554 in 2016, passed HB 114 by a veto-proof majority shortly after. The bill has received less than urgent attention in the Senate, with interested party testimony before the Energy and Natural Resources Committee still unscheduled.

Meanwhile, the portfolio plans the utilities file with the PUCO to outline their compliance programs speak to what the Ohio Chamber has warned for years: the cost to reduce the same amount of electricity is increasing. Efficiency programs targeted to business customers provide tangible benefits. However, the administrative costs of utilities, rather than businesses themselves, directing energy efficiency spending adds millions of dollars every year to electricity bills in Ohio. This highlights the need to allow mercantile customers to opt out and take control of their own efficiency investments by using the energy professionals many businesses already employ.

The consequences of failing to address the energy efficiency mandates will only increase in severity as the annual reductions required of the utilities, and ultimately their customers, double after 2020. With past program budgets as a guide, administrative costs and total utility program budgets are sure to increase and make Ohio less competitive by artificially raising the cost of electricity. To protect Ohio’s business climate, the Senate must pass common-sense reforms to the energy efficiency mandates this month.

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