Review of Ohio Senate Bill 221 and its Energy Efficiency Provisions

ACEEE’s research demonstrates that Ohio’s energy efficiency resource standard has been and will continue to be economically beneficial to the state. Ohio’s utilities are generating energy efficiency savings at a levelized cost considerably lower than the levelized costs of new generation resources. Utility energy efficiency programs run by the state’s four investor-owned utilities have created significant financial benefits for Ohio electricity consumers over the past five years. 

Continuing utility commitments to meeting the SB221 energy efficiency standards in coming years could save customers a total of almost $5.6 billion in avoided energy expenditures. We estimate utility energy efficiency program administration costs to be $2.7 billion.  

Of the savings, $2.2 billion results from price mitigation impacts that reduce wholesale prices, which in turn reduces bills for both participants and non-participants of utility-sponsored energy efficiency programs throughout the entire energy system.

Energy efficiency is the lowest-cost energy resource to meet customer electricity needs in Ohio and can be deployed much more quickly than new capacity can be constructed. The value proposition to businesses and manufacturers, participants and non-participants alike, is unequivocal: energy efficiency reduces customer energy costs, both directly through facility efficiency improvements and through downward pressure on market energy prices. Energy efficiency also reduces risks associated with volatile energy markets and, ultimately, enhances the competitiveness of Ohio’s businesses.