Office of the Ohio Consumers' Counsel

Managing Ohio’s Energy Future

Securing a bright, affordable energy future for Ohio consumers was at the forefront of the opportunities embraced by the Office of the Ohio Consumers’ Counsel (OCC) in 2007. With rate stabilization plans set to expire at the end of 2008, many of the OCC’s ideas came to the forefront through the legislative process. Examples of the agency’s recommendations included: the need for utilities to have a diversified portfolio standard that includes renewable energy resources; increased use of energy efficiency; and rates that are established at the lowest levels possible while still ensuring reliability.

Renewable Energy

Renewable energy has become one of the more important topics of discussion in Ohio and across the United States as the country looks for ways to resolve environmental concerns and dependence on foreign energy sources.

In Ohio, wind, biofuel and solar energy projects have begun to sprout and many customers are talking about making them part of the energy they use on a daily basis. Still, Ohio lags behind approximately two dozen states that have renewable portfolio standards requiring electric utilities to produce a certain amount of their generation using green resources such as the sun and wind.

Ohio is catching up with other states as legislation was introduced this year that would increase the use of renewable energy in Ohio.

In addition, the OCC partnered with American Electric Power, Duke Energy and FirstEnergy to introduce green pricing options that allow customers to choose to support the development of renewable energy certificates. These certificates represent the positive environmental and social attributes associated with renewable energy. Each option was created through the collaborative work of the OCC, the companies and others in order to bring more options to consumers who are seeking ways to support alternatives to traditionally produced electricity.

Distributed Energy Becomes Easier

The Office of the Ohio Consumers’ Counsel made significant contributions over the last two years to make distributed generation easier for consumers to pursue. Distributed generation refers to energy produced on the customer’s property that is also usually owned by the customer. Among the work done by the OCC to make distributed generation more assessable were changes to the rules for net metering (the “net” result of how much energy a customer provides or uses from the utility) and interconnection (the physical connection of the energy generated by customers to a utility’s distribution line).

OCC also provided input on electricity usage to reduce demand at peak times. Net metering and interconnection rules are critical for customers who want to install solar panels or other forms of renewable energy. Also critical are standby rates for larger customers who self-generate but need the utilities to provide backup service when their generator is down.

The positions of the OCC and other stakeholders on these issues resulted in the Public Utilities Commission of Ohio’s (PUCO) March 28 adoption of new interconnection, net metering and standby rate regulations and requirements that utilities offer time-differentiated rates, among other outcomes. These provide different tools for customers to potentially save on their electric bills. This case was an outcome of the Energy Policy Act of 2005 which required the PUCO to consider various elements of distributed generation technologies and make a determination about them for Ohio. — Case No. 05-1500-EL-COI

Energy Efficiency

Reducing the demand for electricity is a measure that has begun to gain ground with utility companies. Utilities like Duke Energy Ohio, First Energy and Vectren Energy delivery of Ohio have implemented demand side management programs to help consumers curb their use of energy. Duke Energy has 10 different energy efficiency programs for consumers, FirstEnergy introduced the Home Performance with ENERGY STAR and residential direct load control programs and Vectren began a weatherization program for low-income customers who were at 150 percent to 200 percent of the federal poverty requirements. OCC actively worked in collaboration with the utilities to develop these programs.

Duke Introduces Programs to Curb Usage

New energy efficiency programs were introduced to customers of Duke Energy Ohio which could help reduce future electricity and natural gas costs. The OCC supported Duke in the development of these programs and the PUCO accepted them in July 2007.

Duke Energy has offered 10 different programs to its customers. Four of the programs provide customers with home energy analysis to help determine cost-effective ways to save energy, three are educational tools, two provide incentives to promote high efficiency heating and cooling equipment and one is a pre-paid program that allows consumers to control their monthly bills.

The OCC believes these demand side management programs provide system benefits for residential customers and are an effective way to control energy costs. The natural gas programs will be launched as pilot programs for three years and the electric program will be used for five years.

Duke Energy will use $75 million to fund the program over the five years. Duke will be able to recover program costs and lost revenues due to increased efficiencies as a result of the programs. Some of the programs will also allow Duke an incentive to collect a based shared savings mechanism on how well the programs perform. The money recovered will be subject to refund or additional collection by Duke, which will be determined by future impact studies to determine the programs’ effectiveness. — Case Nos. 06- 91-EL-UNC, 06-92-EL-UNC, 06-93-GA-UNC

Home Government Relations Electric