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Ohio’s Energy Efficiency Resource Standard: Impacts on the Ohio Wholesale Electricity Market and Benefits to the State


April 30, 2013

Research Report E138

Authors:

Max Neubauer, Ben Foster, R. Neal Elliott, David White, and Rick Hornby

Description:

Utility energy efficiency programs generate significant financial benefits to Ohio’s customers in four primary ways: (1) they help reduce customer demand for electricity, thereby directly reducing monthly electricity bills for participants; (2) they reduce customer demand, or load, which lowers wholesale energy prices, particularly in the short and medium term; (3) in a competitive wholesale capacity market, bidding in energy efficiency resources lowers wholesale capacity prices; and (4) they provide revenue for utilities that bid energy efficiency resources into wholesale capacity auctions, which helps to offset energy efficiency program costs.

In this analysis, we quantify the benefits that would accrue through the full implementation of the energy efficiency resource standard (EERS) in Ohio through 2020. Our analysis shows that there is an inextricable link between Ohio’s energy policy and its economic health and that continuing Ohio’s EERS could save customers a total of almost $5.6 billion in avoided energy expenditures and reduced wholesale energy and capacity prices.