Ohio’s Energy Efficiency Mandates

May 30, 2011 By
In a recent Plain Dealer article, John Funk discusses the savings that have resulted from Ohio’s energy efficiency mandates: State rules helped Ohio consumers save $56 million.  We share the concern mentioned in the article about the difficulty of meeting the ever increasing mandates, especially for renewable energy.
What are the most cost effective ways to become more energy efficient?  If you ignore government subsidies, we have found that typically:
  • Insulation and energy efficient lighting have pay back periods of less than 4 years
  • Geothermal heating and cooling has a payback period of less than 10 years
  • Wind energy has a payback period of about 35 years
  • Solar energy has a payback period of more than 50 years.

Government subsidies have been masking the expense of wind and solar technologies, and somebody has to pay for those subsidies.  We continue to encourage our clients to first look to insulate and upgrade to energy efficient lighting.

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Filed Under: Efficiency, Energy Efficiency Mandates, John Funk, Ohio

FirstEnergy’s Energy Efficiency Mandates

May 12, 2011 By

Due to the recent passage of Senate Bill 221, aggressive energy efficiency mandates have been placed on Ohio’s distribution utilities, including FirstEnergy.  The utilities will remain revenue neutral.  The costs associated with the FirstEnergy utilities meeting these mandates will be socialized amongst their customers through a charge under the Demand Side Management and Energy Efficiency (DSE) Rider, called the DSE2 charge.  This charge will take effect on May 18th. The DSE2 rates vary by utility and rate schedule.  For example, residential customers will pay about 0.2 cents per kilowatt hour (kWh).  The rates for commercial and industrial customers range from a low of 0.035 cents per kWh for Ohio Edison Primary, Subtransmission and Transmission rates to 0.1392 cents per kWh for the Illuminating Company’s Secondary rate. One notable example of FirstEnergy’s efforts to meet these energy efficiency mandates is the light bulb program.  You may read about that in an article by John Funk in today’s Plain Dealer:  So, what’s FirstEnergy doing with all those light bulbs? Over time these charges are expected to grow to well over a penny per kWh as the efficiency benchmarks the Ohio utilities have to meet increase over the coming years.  Fortunately, some customers can achieve rider exemption.  Mercantile customers (i.e., non-residential customers who use more than 700,000 kWh per year or are part of a national account) who are able to offer up energy efficiency projects to FirstEnergy have the ability to become exempt from the DSE2 rider.   In addition, on April 11, FirstEnergy launched several new energy efficiency rebate programs for commercial and industrial customers.  This first set of programs provides rebates for lighting and motor projects.   Other programs will be rolled out in June.  However, a mercantile customer cannot use the same project for both the rebate program and exemption from the DSE2 charge under the energy efficiency rider.  We can help you weigh the trade-off between the up-front rebate and the long-term rider exemption. Contact us if you want to know more.

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Filed Under: DSE2 Rates, FirstEnergy, Illuminating Company, John Funk, Ohio, Ohio Edison, Senate Bill 221