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Customers to see higher electricity bills under proposed freeze to Ohio’s energy standards

Ohio Environmental Council, May 20, 2014

New calculations issued today conclude that a proposed freeze of the state’s advanced energy standards is estimated to cost residential electric customers as much as $150 in higher electricity bills during the two years utilities will shut down the efficiency or renewable energy programs – the so-called freeze.   These bill increases would be avoided under current law through the energy efficiency and renewable energy programs.  Commercial customers face average increase of $31,820 over the two years.

“We strongly support a study of Ohio’s advanced energy policy, but suspending the programs by freezing the standards before a study makes no sense,” said Ted Ford, president and CEO of Ohio Advanced Energy Economy.  “Utility companies have demonstrated that efficiency programs are resulting in real savings for customers.  Freezing the standards will stop Ohio’s advanced energy industry in its tracks while also raising consumer costs.”

Sub. SB 310 seeks to eliminate the advanced energy and energy efficiency requirements for two years because utilities have already achieved the savings required under the freeze.  This means that large utility companies are under no obligation to do additional work to reduce customers’ power usage or provide energy efficiency programming, two provisions of current law that have led to over a billion dollars in consumer savings.  Bills will increase for both residential and commercial customers.

The cost increases vary based on utility service territories across the state.  For residential customers, the costs range from a low of $80.25 to a high of $149.86, with an average cost of $109.61 per customer during the suspension of the programs.  Commercial customers using 300,000kwh monthly, will pay an average of $23,201 more when there is no additional efficiency work, with a potential two year impact reaching as much as $30,000 in some parts of the state.

“One hundred and ten dollars is a lot to many Ohioans,” said Dave Rinebolt, executive director of Ohio Partners for Affordable Energy, a nonprofit organization that advocates for affordable energy policies for moderate and low-income Ohioans.  “The food pantries run by our member agencies are overwhelmed at the end of the month and some Ohioans can’t afford the medications they require. Saving an amount equal to one to two months of electric bills has a huge impact on these families and seniors.”

The calculations were performed by Wilson Gonzalez, a long-time policy analyst with the Office of the Ohio Consumers’ Counsel who recently retired.   Gonzalez relied on information from annual status reports filed by utility companies with the PUCO reports, as well as study by Synapse Energy Economics, which explains how energy efficiency lowers the prices for wholesale power.

“Based on the data collected at the PUCO, with our modeling, these are credible and conservative estimates for what the average residential and what a subset of the business community can expect to pay in higher electricity bills,” Gonzalez said.