The American Electric Power building in downtown Columbus. Photo by Jake Zuckerman, OCJ.
An Ohio House committee began its work Wednesday on legislation designed to incentivize utility companies to boost the energy efficiency of their customers’ homes.
House Bill 389, a bipartisan effort backed by several large Ohio utilities and environmental advocates alike, would restore some components of Ohio’s energy efficiency law, which was gutted by 2019 legislation that’s now at the center of a Statehouse bribery scandal.
The bill allows utility companies to charge residential customers a maximum of $1.50 per month and spend it improving their homes’ energy efficiency, especially through rebates on efficient appliances or technology like smart thermostats.
“The cheapest energy is the kind that doesn’t get used,” said one of the bill’s sponsors, House Majority Leader Bill Seitz, R-Green Twp., to the House Energy and Public Utilities Committee.
The legislation doesn’t go as far as Ohio’s pre-House Bill 6 energy efficiency standards, according to Rob Kelter, a senior attorney at the Environmental Law and Policy Center.
“We will be spending less money and the targets will be lower for the utilities,” he said, explaining the difference between the standards. “However, I think the utilities will be running better programs and customers will be getting better results.”
Utilities would submit their energy efficiency programs to state regulators for approval before applying customer charges. They would need to be designed to reduce customers’ energy use by .5% annually, instead of the pre-HB 6 2% requirement, which Seitz called “cripplingly expensive.”
Residential customers would be able to opt out of the charges every five years, or when a utility has a portfolio approved by state regulators. The companies would need to send a letter to customers informing them that they can opt out, and the customers would have at least three weeks to do so. Commercial and industrial customers, on the other hand, would need to opt in to the charges.
Another sponsor, Rep. Dave Leland, D-Columbus, said the proposal is not as aggressive as its predecessor but would be better designed in terms of how to achieve efficiency and some of the oversight provisions. The bill goes in the right direction, he said, and restores incentives aimed to lower emissions and energy costs.
“[Utilities] get $1.50 per month they have to do the program, then they get an ability to make a profit off the program if they’re successful in saving energy,” he said.
Legislative passage could revive savings to consumers. A 2013 finding from Ohio State University researchers (sponsored by a green energy trade group) found that Ohio’s energy efficiency standards, established by a 2008 law, had saved customers $170 million, according to The Columbus Dispatch. Despite the monthly charge to ratepayers, the study found consumers’ bills were 1.4% lower than they would have been without the law.
The bill drew criticism, however, from the Ohio Consumers’ Counsel, a state agency that represents residential customers in cases before state utility regulators. Spokesman J.P. Blackwood said the office has consumer protection concerns regarding the allowed utility charges for energy efficiency and the “adequacy” of the consumer opt-out from those charges.
“We look forward to sharing our consumer concerns with legislators,” he said.
The specter of HB 6 looms over the issue. Besides gutting energy efficiency standards, the legislation provided massive, ratepayer-funded subsidies to two nuclear plants owned at the time by a subsidiary of FirstEnergy Corp., a utility company; and bailed out two coal-fired power plants owned by a cooperative comprised of several Ohio utility companies.
Federal prosecutors accused the former House Speaker and several allies of accepting $61 million from FirstEnergy to ensure passage of the legislation and enrich himself. He has pleaded not guilty and awaits trial. His political adviser, a lobbyist, a dark money entity and FirstEnergy have all pleaded guilty to their role in the scandal.
HB 389 forms an unusual harmony between environmental advocates, Democrats and Republicans who co-sponsored the bill, and Ohio’s utilities — all of whom have been bitterly divided over the fallout from HB 6 and its slow-moving, partial repeal.
In a statement, American Electric Power said the company has long supported helping customers save money by using electricity more efficiently.
“The bill creates voluntary energy waste reduction programs that offer a balanced and sensible approach to help our customers accomplish that goal,” said company spokesman Scott Blake in a statement.
Spokespersons for AES (formerly known as Dayton Power and Light Co.) and Duke Energy could not be reached for comment.
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