Guest Blog: Q&A with Ohio's Energy Future Tour Panelist Chris Allwein, Energy Efficiency Expert and Consumer Advocate
Today is the second stop of the Ohio's Energy Future Tour in Columbus, Ohio.
Since its launch in December, the tour has drawn the attention of hundreds of Ohio businesses, environmental and public health organizations, the medical community, local elected and government officials, and citizens who are invested in developing an energy vision that will jumpstart the state's economy and make Ohio a cleaner, safer place for children and families.
Today on the blog, I talked with Chris about the six key facts Ohioans and lawmakers should know about the energy efficiency standard and its benefits in the Buckeye State:
Q. Chris, the tour comes at a crucial time for Ohio: After five years of successful efficiency programs and renewable energy investments, Ohio has now frozen these efforts for two years while a legislative committee reviews their impacts.
As someone who is an expert in assessing the benefits of the energy efficiency standard, can you share with us your experience with Ohio's efficiency programs?
A. Sure. First off, the clean energy standards were put in place for a good reason: energy efficiency is the cheapest and cleanest way to serve Ohio's energy needs, allowing homeowners and businesses to get the same services they want from energy—light, entertainment, cool air, industrial processing—while using less.
But you don't need to be an expert to understand that using less energy will likely mean a cheaper electric bill. Utility-scale programs provide great opportunities for residential, commercial and industrial customers to participate and control their usage without sacrificing comfort or process.
You also don't need to be an expert to understand that Ohio's efficiency programs have consistently been delivering low-cost power and bill savings to consumers since 2009—while driving the economy and reducing pollution. All of these benefits can be found in reports filed by the utilities themselves and available at the click of a mouse to any member of the public.
For example, Ohio's utilities report the progress of their efficiency programs annually to the utility regulatory commission. In these publicly-available documents, utilities report over $1.5 billion in savings from helping their customers save energy over the last five years. And with customers getting—at minimum—a 2:1 return on their investment, these savings are cost-effective. In fact, the administrative rules governing these programs require them to be cost-effective.*
In their annual reports and applications for their program portfolios, utilities report over and over again the value of energy efficiency in Ohio.
AEP Ohio recently called its portfolio of programs "an important resource for the state of Ohio, AEP Ohio, and its customers."**
Though FirstEnergy cancelled the lion's share of its programs before the New Year, just a short time ago it reported that its programs were "cost-effective" and provided "significant opportunities for energy and cost savings for virtually all of the Companies' customers."***
Dayton Power and Light reports that its programs are designed to "help customers save energy and money" and that these efforts to date have been a success, having saved enough energy to power nearly 55,000 homes for an entire year.****
* Represents 2009-2013 energy efficiency program data derived from annual utility status reports available via the Public Utility Commission of Ohio's online docketing system at.
** AEP 2015-2019 Portfolio, Volume 1(March 26, 2014), page 6
*** FirstEnergy 2013-2015 Portfolio, Case No. 12-2190-EL-POR, Application (July 31, 2012), pages 3-4
**** Dayton Power & Light 2013-2015 Portfolio, Case No. 13-0833-EL-POR, Application (Apr. 15, 2013), page 16
Q. Can you expand on the progress you've seen in Ohio since these programs started? What kinds of economic benefits are you seeing?
A. The standards have really spurred the clean energy economy here.
An entire new sector of jobs has been created in Ohio of people who specialize in delivering energy efficiency upgrades and products to homes and businesses. Ohio has over 400 advanced energy companies that employ over 25,000 Ohioans. In the energy efficiency sector, just recently AEP estimated that its energy efficiency programs alone will create 4,000 jobs. And this is just one of the four investor owned utilities.*
FirstEnergy has praised the job-creating benefits of its programs, reporting that they balance "near-term energy savings opportunities among all rate classes with longer-term programs that continue to create jobs and build capacity for delivering greater energy and demand reductions in the future."**
*AEP 2015-2019 Portfolio, Vol 1(March 26, 2014), pages 16-17
**FirstEnergy 2013-2015 Portfolio, Case No. 12-2190-EL-POR, Attachment A (July 31, 2012), pages 4-5
Q. How has this progress affected consumers?
A. Every dollar counts for families living paycheck to paycheck and the energy efficiency standard has put more money back in the pockets of consumers rather than spending it on their electric bills.
Efficiency programs can be a boon for businesses as well.
According to Duke, while commercial and industrial customers often consume significant amounts of energy and thus have a lot of capacity for cutting costs, they may not understand the benefits of high efficiency alternatives or even how to access them. Efficiency programs offered by utilities close this gap by giving business owners a jumpstart (through rebates) on often high-cost efficiency equipment, allowing them to get a quicker return on their investment. Duke indicates that these investments, and the corresponding savings on utility bills, allow customers to "reinvest in their business."*
This reinvestment has potentially tremendous benefits for the rest of the economy.
*Duke 2014-2016 Portfolio, Case No. 13-0431-EL-POR, page 19
Q. Can you give an example of energy efficiency projects in Ohio that are helping to drive economic growth and lower costs for consumers?
A. Direct participation in energy efficiency programs and the installation of retrofits (e.g., new energy-efficient refrigerators and other appliances) can provide significant reduction in customer usage without any lifestyle sacrifice.
I saw this on several residential audits that I participated in.
On the commercial side, retrofits such as energy efficient motors and distributed generation projects like combined heat and power facilities allow large customers to control their energy usage, expand their businesses and remain competitive, which is good for Ohio. Jay Plastics, a manufacturer in Mansfield, Ohio, recently invested in a new CHP facility as part of an expansion which included the hiring of 31 new full-time equivalent positions.
Q. Can you share with us how the two-year freeze is affecting Ohio?
A. The freeze is depriving Ohioans of reliable, low-cost, clean energy that helps drive down the price of electricity for consumers, businesses, and manufacturers.
According to the American Council for an Energy Efficient Economy, efficiency significantly lowers wholesale energy prices in Ohio and saving consumers money. Freezing the standards eliminates this benefit, driving electric prices up. In this sense, the freeze runs contrary to Ohio law which requires the state to provide customers with "adequate, reliable, safe, efficient, nondiscriminatory, and reasonably priced retail electric service" and provide a "diversity of electricity supplies and suppliers."
And many Ohio consumers are already feeling the impacts of the freeze.
While Duke, AEP and DP&L are moving forward with their programs during the two-year period, FirstEnergy—the largest utility in the state—is not.
Effective on the first of the year, FirstEnergy cancelled most of its programs, which previously provided consumers a leg up on saving energy by offering rebates on everything from LED light bulbs to ceiling fans, from household appliances to whole house air conditioning. Also disappearing are discounted household energy audits and cash rebates to homebuilders and buyers of very high-efficiency homes. Parallel programs for businesses are also vanishing.
When programs are scaled back Ohioans lose. That's because efficiency programs, instituted on a utility scale, are often the only low-cost option customers have available that allow them to control how much electricity they use and how much they will pay on their energy bills.
Given such developments, the freeze is holding Ohio back from a host of benefits: jump-starting the economy, job growth, reducing power prices, and protecting our health. It is also hindering Ohio's ability to use the easiest, most cost effective tools available—energy efficiency and renewables—to cut carbon from power plants.
These tools have to be a part of Ohio's energy future, or Ohio will fall behind the rest of the states in the development and utilization of clean energy.
Q. What do you believe state leaders must do to help lower costs for consumers, protect health and create new jobs?
A. Ohio should be focusing right now on sound energy policies that move the state forward—not backwards.
Simply put—lawmakers should immediately reinstate the standards and provide Ohioans options to control their energy usage. Affordable, clean power is not a partisan issue. It is a demonstrated benefit for Ohio's consumers.