There is a huge savings opportunity now available to high-voltage FirstEnergy-Ohio customers, but most have no idea it exists. These customers can get the costly so-called “DSE2” surcharge removed from their electric bills, and it can happen as soon as they complete a simple form.
Ohio Senate Bill 221 Mandates
Ohio Senate Bill 221 (SB 221) placed aggressive energy efficiency and peak demand reduction mandates on Ohio’s investor-owned electric distribution utilities. To comply, Ohio utilities like FirstEnergy have to implement programs to reduce energy consumption and peak demand within their territory by an ever-increasing amount.
Compliance costs incurred by the utilities are passed on to customers through a surcharge on their electric bills. In FirstEnergy’s Ohio service area, this surcharge is called the DSE2 charge.
DSE2 rates are updated every six months and go into effect each Jan. 1 and July 1. The new rates that went into effect this month, along with prior period rates, are listed in the accompanying table.
Each FirstEnergy-Ohio rate schedule is subject to its own DSE2 rate. To determine whether you are on the Residential (RS), Secondary (GS), Primary (GP), Subtransmission (GSU), or Transmission (GT) rate schedule, check your electric bill. To find out how much you will pay in DSE2 charges, multiply your rate schedule’s new DSE2 rate by a typical month’s consumption in kilowatt-hours (KWh)
Streamlined Opt-Out Opportunity
Thanks to the passage of Ohio Senate Bill 310 (SB 310), and the hard work of FirstEnergy and organizations like the Industrial Energy Users of Ohio, a very compelling savings opportunity now exists for FirstEnergy-Ohio GSU and GT customers. This opportunity also extends to high-consumption FirstEnergy-Ohio customers, regardless of rate schedule, that have applied to self-assess the Ohio kWh tax.
Effective Jan. 1, these customers qualify for a streamlined opt-out of the SB 221 energy efficiency and peak demand reduction compliance programs. By opting out, the customer no longer has to pay the DSE2 rider. At the same time, the customer must forego any and all direct benefits from the programs.
The direct benefits historically have been rebate payments for completion of energy efficiency projects. However, FirstEnergy recently modified its compliance plan eliminating most of these rebate programs. Therefore, currently, the direct benefits of remaining in the program are negligible.
Streamlined Opt-Out Steps
For a qualified customer to opt-out, it must first provide notice to FirstEnergy and the Secretary of the Public Utilities Commission of Ohio (PUCO). FirstEnergy has a specific Ohio SB 310 opt-out form available to fill out and submit.
The form requires the customer to provide: 1) the effective date of the election to opt out; 2) the account number for each account to which the opt out shall apply; 3) the physical location of the customer’s facility; and 4) the date upon which the customer plans to establish cost-effective measures to improve its energy efficiency or reduce peak demand.
Streamlined Opt-Out Follow-Up Steps
After the opt-out form is submitted, the customer will have to submit an initial report to the PUCO estimating savings and a timeframe for the implementation of energy efficiency projects. This report must be submitted no later than 60 days after the customer’s effective opt-out date.
In addition, a follow-up report will need to be submitted to the PUCO in November 2016 detailing the status of the projects outlined in the initial report.
Streamlined Opt-Out Savings
Brakey Energy has evaluated the potential streamlined opt-out savings for scores of FirstEnergy-Ohio GSU and GT customers. Based on current DSE2 rider rates, a typical GSU or GT customer can save tens of thousands of dollars per year by opting out. It is not unusual for us to encounter customers that can save hundreds of thousands of dollars — if not over $1 million — per year.
We have encountered many clients and prospective clients that are intimated by the reporting requirements. However, with a competent energy partner, meeting these requirements should not be overly burdensome.
We strongly advise that all FirstEnergy-Ohio customers that qualify for the streamlined opt-out evaluate the opportunity thoroughly. The savings are too large to ignore.
Note: This article was authored by Brakey Energy President Matt Brakey and was originally published by Crain’s Cleveland Business on 1/16/15. You can view the original version on crainscleveland.com.