May 22, 2013

Ratepayers Save Under Ohio’s Green-Energy Law

The “green” energy provisions of a 2008 state energy law have saved consumers $170 million, according to Ohio State University findings that run counter to the argument that the law’s requirements have contributed to an increase in bills.

The study, sponsored by a green-energy trade group, says customers’ electricity bills were 1.4 percent lower than they would have been without the law, a difference of about $170 million from 2008 to 2012. That translates to a little more than a dollar per month for a typical household.

“It appears to be a win-win for the ratepayers and for the Ohio economy,” said Joseph Fiksel, a co-author of the study and executive director of OSU’s Center for Resilience. His research center looks into ways that industrial systems can be made more efficient and environmentally friendly.

The report’s sponsor is Advanced Energy Economy Ohio, a group that opposes a legislative push to revise the state energy policy. The 2008 law, Senate Bill 221, said utilities must meet annual benchmarks for energy efficiency and renewable energy.

According to the study, the energy-efficiency requirement is responsible for all the savings, canceling out a small increase in costs related to the renewable-energy rules.

Under the energy-efficiency rules, utilities provided incentives for customers to cut their power use by installing new lighting systems and making other changes.

While cutting costs, the new rules also spurred $660 million in public and private investment and led to 3,200 new jobs, the report says.

Critics say there is no way that the 2008 law has led to a net savings, although they have not seen this study, which will be released to the public today.

“It boils down to a question: If this stuff is so cheap, then why do you have to subsidize it?” said Jonathan Lesser, president of Continental Economics, a New Mexico research firm.

He was among the experts who testified last month before an Ohio Senate panel about Senate Bill 221. His firm provides testimony across the country about the merits of free-market energy policies.

Even though the study was financed by Advanced Energy Economy, the underlying economic model was developed for another project, Fiksel said. In other words, the parameters of the study were not designed to come up with a result that the sponsor would like, he said.

“The takeaway message is that investing in renewable energy and energy efficiency is an economic stimulus,” he said.

That’s a message that Advanced Energy Economy hopes lawmakers will hear. Ted Ford, the group’s president and CEO, said in a statement that the findings will “be a helpful resource to policymakers as they consider possible changes to the law.”

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