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Consumer, Manufacturing Groups Back Studying—Not Freezing—Ohio Efficiency Standards

Saturday, May 3, 2014 at 10:00 AM

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A measure to freeze the state’s energy efficiency and renewable standards is quickly moving through the Senate. Statehouse correspondent Andy Chow takes a close look at the opinion of two groups that want to stop the freeze – but say changes should be made in the law.

In the recent history of reforming Ohio’s efficiency and renewable standards the opinion of two groups have played a major role in the debate: the Office of the Ohio Consumers’ Counsel and the Ohio Manufacturer’s Association.

The standards call on utilities to get 25 percent of its energy from renewable and alternative sources by 2025. The law, which passed in 2008, also sets a benchmark of 22 percent energy savings by 2025.

The OCC and the OMA adamantly opposed a bill last year that would have been a major overhaul to the policies surrounding the standards. But they haven’t said much on the new bill to freeze the standards while a task force analyzes the costs and benefits.

Now, they’ve joined forces to say they feel these standards do lead to lower electric bills. But they acknowledge the types of concerns people might have going forward. Martin Berkowitz with the OCC says a cost benefit analysis is a good idea, but that the state should do so without the freeze.

“Rather than changing the law now and then having a study, we think that should be flipped,” Berkowitz said. “We think the study should be conducted by all means and then based upon the results of that study. Then look at the ways to change the law, because everyone’s interested in lower consumer prices.”

And the OCC and OMA also say changes should be made to the original law created in 2008. Berkowitz believes the current policies tip the scales in the utilities’ favor and consumers end up missing out at the end.

“We would say currently the balance is tilted—the balance of the rate-making process is tilted towards the utilities,” he said. “And that we would like to see it leveled out so that utilities are able to get their reasonable rate of return but that the customers are paying just and reasonable rates for their electric service.”

Berkowitz notes an Ohio Supreme Court ruling that AEP was charging their customers too much. But the Public Utilities Commission of Ohio ruled that it had no mechanism in place to recoup the loss. The OCC and OMA propose the creation of an avenue that refunds consumers in the future.

Another proposal takes on the amount of money utilities can make off of consumers. Right now the law says utilities cannot keep what’s designated as “significantly excessive earnings.” But the groups say that should be reduced so that utilities cannot keep “excessive earnings.” According to Berkowitz, these amounts are determined on a case-by-case basis by the PUCO.

Berkowitz says these changes will help the office’s goal of bringing down the overall cost of energy to consumers.

“Ohioans now rank—they’re paying higher electric rates than customers in 32 other states,” he said. “And we would like to see that come down. We would like to see Ohioans pay some of the lowest rates in the country rather than in the higher percentile.”

During the most recent committee meeting, Democratic State Sen. Eric Kearney of Cincinnati called for some type of compromise that would recognize the potential issues with the standards without abandoning them entirely. These suggestions from the OCC and OMA, according to Berkowitz, might create a path to such a compromise.

Any possible compromise or change to the bill might derail previously mentioned goals by the House and Senate leadership to send the legislation to the governor’s desk by this month.

Tags

Energy, Government/Politics

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