Ohio's Clean Energy Success Story

The Clean Energy Law Three Years In
Released by: Environment Ohio Research & Policy Center

Ohio’s Clean Energy Law is delivering on its promise of improved energy efficiency and increased production of clean, renewable electricity—reducing Ohio’s dependence on coal and natural gas power plants, which harm public health and the state’s environment. The Clean Energy Law—Senate Bill 221—was passed in 2008 and sets requirements for energy efficiency and renewable energy for each of the state’s four investor-owned utilities (IOUs).

Between January 2009, when the law took effect, and December 2011 Ohio’s four largest utilities implemented energy efficiency programs that have saved 3.2 million megawatt-hours (MWh) of electricity, enough electricity to power 267,000 Ohio homes for a year. The 412 megawatts (MW) of wind and 45 MW of solar photovoltaic capacity added in Ohio between 2009 and 2012 can produce enough energy to power 95,000 Ohio homes.

In 2011, for the first time, all four major utilities in Ohio met the renewable energy requirements of the law. Three of the four utilities met the energy efficiency requirement, using a combination of new energy efficiency measures and past customer-initiated savings, with only FirstEnergy narrowly missing its energy efficiency benchmark.

The Clean Energy Law is working. Ohio should continue and improve the implementation of the law to maximize the potential of home-grown clean energy to protect our environment, safeguard our health, and invigorate Ohio’s economy.

Customers across the state are saving money and cutting pollution as a result of programs established by major utilities to comply with the Clean Energy Law.

·    Funding from American Electric Power’s (AEP’s) New Construction program helped Reynoldsburg build its new high school to strong building energy efficiency standards. With help from more than $182,000 in incentives from AEP, the new school was constructed to consume less energy than a conventional school building and will cost less to operate. These smart building practices will save Reynoldsburg an estimated 1,660 MWh of energy annually.
·    Ohio residents recycled almost 21,000 old, energy-hogging appliances in 2011—saving 35 gigawatt-hours (GWh) of energy that year—through an appliance recycling program operated by AEP, Dayton Power and Light (DP&L) and FirstEnergy.
·    A $130,000 incentive from Duke Energy’s Smart Saver Non-Residential Program spurred the Kroger Company to upgrade the cooling equipment in its Cincinnati data center, resulting in savings of 1,013 MWh and reducing Kroger’s costs by $86,555 in the first eight months after the project came online in August 2010.
·    Construction of energy-efficient new homes through AEP’s New Homes Program saved 885 MWh, enough to power 73 homes for a year, and reduced peak demand by 0.7 MW in 2011, enough energy to run 140 clothes dryers at the same time. AEP and Columbia Gas Ohio are jointly administering this program in their jurisdictions, working with builders to create buildings that will use less energy overall.

The Clean Energy Law has spurred development of new wind and solar energy projects across Ohio.

Utilities can use renewable energy credits from approved solar and wind projects to fulfill the renewable energy requirements of the Clean Energy Law—giving residents, schools, businesses and private renewable energy developers strong incentives to adopt clean energy.
·    With the installation of solar energy projects at two schools, Centerburg School District will save an estimated $50,000 annually on its electricity bill. An outside company financed and installed the solar panels, while Centerburg paid only a modest upfront legal fee. The third-party solar developer will be compensated by selling renewable electricity credits to utilities.
·    The Cincinnati Zoo & Botanical Garden has installed solar panels in its parking lot that will generate enough electricity to meet 20 percent of the zoo’s electricity needs and reduce global warming pollution by 1,775 tons annually. An agreement with FirstEnergy to buy the renewable electricity credits from the project is helping to finance the installation.
·    Cooper Farms, an Ohio-owned turkey and pork producer, has installed wind turbines at one of its processing facilities, obtaining the majority of its electricity from wind power and selling renewable electricity credits to utilities seeking power generated in Ohio. Cooper Farms has also benefited from an industrial energy efficiency program offered by AEP that has cut power consumption by 330 MWh annually—enough energy to power 30 homes for an entire year.
·    Blue Creek Wind Farm, a 304-MW facility in Van Wert and Paulding counties, was made possible in part by a long-term 100 MW power purchase agreement that FirstEnergy signed with the wind farm developer.
·    With a firm commitment from a utility to buy electricity from the wind farm, the developer was able to secure funding for the project. Ohio State University also signed a 20-year agreement to purchase 50 MW of power from this wind farm—enough to meet 25 percent of the campus’ electricity needs annually and save Ohio State $1 million every year.

Utilities are meeting, and often exceeding, the requirements of the Clean Energy Law.

In 2011, Ohio’s four investor-owned utilities achieved virtually all of their targets for renewable energy production, solar energy production, energy efficiency and peak demand reduction established under the Clean Energy Law—a marked improvement over their performance in Environment Ohio Research & Policy Center’s two previous clean energy scorecards.
·    AEP and DP&L met all the requirements of the Clean Energy Law. Each exceeded its energy efficiency and peak demand reduction benchmarks, and both integrated the renewable energy benchmarks into their business practices by owning or investing in long-term sources of renewable energy.
·    Duke Energy met 100 percent of its benchmarks for renewable energy, and it exceeded its requirements for energy efficiency and peak demand reduction.
·    FirstEnergy failed to meet its energy efficiency requirement under the Clean Energy Law, but significantly improved its compliance with other aspects of the law after having received a D- on our scorecard for its performance in 2010 and an F for its performance in 2009.

Public officials should ensure that Ohio achieves its potential for renewable energy and energy efficiency by maintaining the Clean Energy Law and providing better oversight of utilities’ compliance.

·    The current requirements of the Clean Energy Law should not be weakened, and Ohio should expand and strengthen its renewable energy and energy efficiency policies to match policies adopted by leading states.
·    Ohio should adopt a suite of policies to support the Clean Energy Law, enabling low-cost financing for clean energy projects and strengthening the state’s building energy codes.
·    The Public Utilities Commission of Ohio (PUCO) should facilitate utilities’ signing of long-term contracts for renewable energy. The PUCO should not stand in the way of projects that offer significant environmental and economic benefits to Ohio—like AEP’s Turning Point Solar Project, which was denied approval by the PUCO in January 2013.
The PUCO should ensure that utilities are not overstating energy efficiency program savings and are adopting programs that will encourage new savings with long-term potential. The PUCO should not credit utilities for energy efficiency savings generated in the past by customers without utilities’ involvement.