Cleveland Housing Network, an Ohio House candidate and Lutheran leaders weigh Ohio's halting progress on clean energy
Why have the recent efforts to “freeze” Ohio’s renewable and energy efficiency standards sparked such heated debates? Utilities say they can do a better job without them lowering costs and introducing renewables and efficiency. Environmental and housing groups, manufacturers, and even Evangelical Lutheran church leaders have weighed in with strong reasons for keeping the standards in place.
Which side is right?
By now, most Ohioans have heard that its legislature is poised to halt a law where utility companies produce 25% of their power from “advanced” sources like wind and solar by 2025. The Ohio General Assembly is also considering an end to a 2008 law that requires utilities to improve their energy efficiency by 25% by 2025.
If it all sounds familiar, it may be because some lawmakers have already attempted to roll back the renewable and energy efficiency mandates, twice, and were beaten back by a coalition that has reported gains in employment and economic activity and reductions in energy costs to homeowners as a result of the law.
But, as the Columbus Dispatch reported, the battle lines have been drawn. On one side are investor-owned utilities, like Akron’s FirstEnergy, and some manufacturers, like Canton’s Timken, a maker of ball bearings, ironically, for wind turbines, who would like to “freeze” the standards. On the other side are manufacturers like Honda, which recently erected two wind turbines at its Russell’s Point, Ohio plant, and OwensCorning, whose Toledo facility makes glass for solar panels.
Timken told the Dispatch that it estimates its energy costs have gone up $2 million since the start of the mandate. Anthony Alexander, president and CEO of FirstEnergy, told the paper that renewables and energy efficiency “play some role in meeting the energy needs of customers, (but) they are not substitutes for what has worked to sustain a reliable, affordable and environmentally responsible electric system.”
On April 8, 2014 eleven manufacturers with 30,000 employees in Ohio countered in a letter to Senate President Keith Faber that the energy efficiency mandate is of “strategic importance” in their efforts to reduce operational costs and grow their bottom line.
“These programs, as well as efficiency improvements in homes and buildings, provide business prospects and jobs for contractors across the Buckeye State,” the manufacturers wrote. “Energy efficiency also is a low-cost strategy for keeping utility costs under control and providing protection against price volatility, which enhances competitiveness for our companies.”
The cost-benefit analysis of Ohio’s renewable and energy efficiency mandate has been an area of dispute.
The Dispatch reports that, “utilities pay for renewable energy and energy-efficiency programs through special charges that appear on customers’ bills. This ranges from about $5 per month for a typical household to more than $100,000 per month for a large company.”
When reached for comment on the costs-benefits of the mandate, Ryan Augsburger, Managing Director, Public Policy Services at The Ohio Manufacturers' Association states that the Ohio Utility Energy Efficiency Program has produced a savings of $4 billion.
“Ohio’s four investor-owned utilities have not testified on any of the recent legislation (SB 310) dealing with energy efficiency, while behind the scenes they have been lobbying,” Augsburger writes in an email. “However, the utilities have annually filed spending and savings data with the Public Utilities Commission of Ohio (PUCO), as required by law.
“Here’s what the filings show: Electricity ratepayers across the state saved $1.03 billion from 2009 to 2012 through the utility energy efficiency programs. The utilities projected $4.15 billion in ’lifetime' (10 years) benefits from this four-year period of energy efficiency projects.
“The customer energy savings data comes directly from utility status reports, and are available via the PUCO’s online docketing system. The utilities’ own reports verify annual energy savings and confirm that energy efficiency programs are saving customers money.
See the data by utility here.”
A study commissioned by Advanced Energy Economy Ohio Institute (AEEO) and conducted by researchers at Ohio State University concluded that the mandates have more than offset the increase in generation costs, as efficiency tactics have reduced overall energy demand. Further, the mandate lowered Ohio utility bills by 1.4 percent, created 3,200 jobs, and stimulated $160 million in economic activity that contributed to the state’s GDP.
Despite the mounting evidence to support their continuation, the campaign to remove the mandates is gaining steam this time around. An executive of a housing non-profit group in Cleveland warns that the Senate Public Utilities Committee very nearly has the votes to freeze the mandates. He and a group of local non-profit groups working on housing in Cleveland met with Senator Shirley Smith (D-Cleveland), who serves on the Public Utilities Committee, in an attempt to convince her of the benefit of the mandate to low-income homeowners. Smith, he said, seemed resigned to the mandates being frozen. Further, he noted that Smith is a swing vote.
Some of these housing groups hold contracts with utilities, including FirstEnergy, to perform the residential energy efficiency work under the mandate. John Sarver runs the program for Cleveland Housing Network (CHN). The mandate means FirstEnergy spends $1.6 million in Greater Cleveland on its contract with CHN which swaps out incandescent for compact flourescent light bulbs in low-income homes. They also test and offer $100 to replace refrigerators with EnergyStar models. Sarver calls this work, “the low hanging fruit.” The program, he says, has impact. “(Demand) is really never ending.”
But, Sarver feels, the mandates would have even more impact if the electric utilities would remove some administrative hurdles. “Reporting systems for FirstEnergy are data intensive,” he says, adding, “they want a lot more weatherization information than (they need) for what I’m doing. There’s just not enough money for me to do weatherization, like insulation. FirstEnergy is telling us they want to do more for home weatherization, but they make it difficult to process the funding.”
Sarver represents CHN in a coalition, Ohio Partners for Affordable Energy, who favor not changing the mandate. He says any changes at this point would mean, “I’d lose funding to some degree and our (electric) rates will go up.”
Mike Piepsny is Executive Director of Environmental Health Watch, which has a $20,000 contract to improve home energy efficiency because of the mandate. The organization also just completed a 3-year contract with HUD where it completed twelve energy retrofits of early 20th century homes in Cleveland, including what he calls six “deep energy” retrofits.
Piepsny, who is campaigning for a House seat in Cleveland’s 14th District, feels that the Ohio energy mandates will continue to push innovation in clean energy and efficiency.
“The more we learn about making energy efficiency more cost effective, the more we’ll need to continue the infrastructure, and the picture on power plants, with regulation. That’s going to be the investment in the future.”
With all of the progress Ohio has made, and with mounting evidence that immediate action can forestall the worst effects of climate change, a group of Evangelical Lutheran Church leaders spoke out last week.
Rev. Rick Barger, president of the Trinity Lutheran Seminary in Columbus, has appealed to Senator Faber to lead efforts to save the energy mandates on faith-based and economic grounds, the Plain Dealer reports.
"I understand he is a Lutheran," Barger explained in an interview, "and am looking forward to meeting with him. Ohio needs to lead this country and not lag it in innovation, in imagination and in creating an alternative future."