May 6, 2014

Advocates of Ohio's Green-Energy Law Tally Savings

Programs led to consumer savings of $1 billion compared with costs of about $500 million.

Energy-efficiency programs that could be changed or eliminated as a result of a legislative proposal have led to consumer savings of $1 billion compared with costs of about $500 million, according to company reports and an analysis by “green” energy advocates.

Those figures cover the first four years — 2009 to 2012 — of programs that, under current state law, were expected to grow each year until 2025.

However, Senate Bill 310 would stop the annual increases in the law’s requirements, which cover energy efficiency and also renewable energy. Senate Republican leaders say the bill is an attempt to rein in a law that imposes costs on all utility customers while benefiting only a few of those customers. They hope to pass the measure in the next month or so.

In response, green-energy advocates say the public record shows that energy-efficiency programs have created savings that far exceed the costs.

“It’s an overwhelming win for customers,” said Max Neubauer, a senior policy analyst for the American Council for an Energy Efficient Economy, a research group.

Critics of the energy-efficiency programs say that the benefits are going to the small share of customers who choose to participate. They say that many of the projects would have been done anyway, so any savings are illusory. They also say that compliance will get much more expensive as the efficiency requirements increase, leading to higher charges in customer bills.

“Very few people get these benefits, and everyone pays for them,” said Jonathan Lesser, a New Mexico economist who has done his own analysis on behalf of companies that oppose the energy-efficiency rules.
Ohio’s four investor-owned electricity utilities must file reports on efficiency programs; the programs provide rebates and other aid to encourage customers to find ways to use less electricity.

American Electric Power spent $174 million, FirstEnergy $206 million, Duke Energy $86 million and Dayton Power & Light $49 million. The total was $515 million.

The $1.03 billion in savings is an estimate by Ohio Advanced Energy Economy, a trade group that opposes S.B. 310.

The group came up with the figure by looking at the energy savings, listed in public records as units of electricity, and converted the data to dollars by using a rate of 10 cents per kilowatt-hour. This is close to the average rate for the types of customers that use the programs; the actual rates vary by utility and other factors.

Ohio Advanced Energy Economy plans to release its analysis today.

AEP says it agrees that the programs led to savings that exceeded the costs from 2009 to 2012, but the utility also says that costs will need to rise “significantly to reach the future (efficiency) requirements, and we don’t think that’s a good idea for our customers,” said spokeswoman Fay White.

“That is why we support common-sense approaches to review the mandates, and we continue to be engaged with the legislature and other interested parties on the subject.”

The utility’s central Ohio customers pay for the programs through a charge on their monthly bills of $2 to $3 for a typical household.

In central Ohio, AEP has done projects in nearly every community.

“It’s a great program, a fantastic program,” said John Gordon, vice president for construction and environmental at Englefield Oil Co. of Heath.

His company is one of the largest convenience-store owners in the state, best known for its Duchess Shoppe stores. With AEP’s help, the company put in high-efficiency lighting at 85 locations and replaced the lighting at its headquarters.

At the headquarters, the company paid $45,000 and then received a $12,000 rebate from AEP. As a result, the building’s lighting costs are down about 60 percent. Gordon estimates that his savings will cover the costs in less than three years.

“It’s a very good deal that we’re proud to be part of,” he said.

AEP has done projects for hundreds of other companies and agencies, including many schools and libraries.
Meredith Southard of Worthington Libraries said in an email: “Above all else, the library is here to serve the community, through our collections, services and programs. Money that was saved through greater energy efficiency and through the AEP rebate can go towards these goals.”

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