COLUMBUS, Ohio – The Ohio Senate killed legislation that would have allowed utility companies to run energy efficiency program designed to reduce their customers’ net energy use.
Legislation at the center of a criminal bribery scandal at the statehouse from 2019 ended the programs in Ohio. A bipartisan coalition in the House narrowly passed House Bill 79 this summer, which would have revived them.
The legislation was scheduled for a last-minute vote in the Senate Energy committee Wednesday morning, the last scheduled lawmaking day of the year, though it was removed from the schedule Tuesday evening without explanation. Chairman Bill Reineke, a Tiffin Republican, declined comment when asked what happened.
Donovan O’Neil, state director of Americans for Prosperity, a free market advocacy group started by wealthy conservative donors, said his organization made the bill a major target.
“We made it clear in the Senate that this is something we have big concerns about,” he said.
The bill also drew opposition from the Ohio Consumers’ Counsel, a state agency that represents residential ratepayers’ interests in regulatory and lobbying matters, which said the bill only forces more money from customers to power companies for a problem a free market can solve.
HB79 would have created an energy efficiency program less ambitious than its predecessor – a 0.5% electricity reduction year over year instead of 2% – but more specific in its guidance to utilities and with more oversight from regulators.
It passed the House by an unusually tight 50-46 vote in June, winning almost all Democrats and a good chunk of the Republican caucus. Senate President Matt Huffman, a Lima Republican, said “we’re going to start turning toward other solutions to provide energy and energy policy than taking money from ratepayers.”
Under the bill, utilities at their discretion would apply to the Public Utilities Commission of Ohio to create an efficiency program. Customers would pay a maximum of $1.50 extra per month and can opt out if they choose. year.
They accomplish this either by subsidizing customers’ purchase of efficient appliances, or by deploying different forms of incentives or strategies for customers to reduce energy use at peak demand moments. The bill requires 15% of program spending go toward low-income customers with income below 200% of the federal poverty level ($51,640 a year for a family of three) who would struggle to afford the up front costs of a new dishwasher or other appliance.
In effect, the programs task utilities with the goal of decreasing Ohio’s net power demand, and then pays them for the money they lose to the new efficiencies.
The bills’ backers included two of Ohio’s biggest distribution utilities, along with interests they regularly tussle with: environmentalists and the Citizens Utility Board, a ratepayer advocacy nonprofit.
Supporters pointed to the results of the most recent wholesale electricity auction from PJM, which oversees the 13-state electrical grid that includes Ohio. Its power for next year sold 800% higher than it did in 2023, Reuters reported, driven in part by retiring coal facilities and a backlogged queue for new generation projects.
Efficiency programs, backers say, help individual customers cover the added purchase price of more efficient appliances that save money in the long run. And given the net reduction in demand, they say prices and maintenance costs will fall.
Brian Billing, director of customer experience for American Electric Power, estimated to state senators that the bill could save 500 megawatts – about the output of a small natural gas power plant – in one year. He said while a certified, energy efficient appliance saves money in the long run, customers need a nudge (the rebate) for the math to work on their timeline.
However, the Ohio Consumers Counsel, a state agency representing residential ratepayers’ interests at the PUCO, testified against the bill. Director Maureen Willis said energy efficiency is a problem that the free market can solve – customers will buy the appliances that save them money over time, without utilities’ involvement or new fees on their bills. She also questioned the wisdom of paying utilities for their “lost distribution revenue” – the revenue (from power sales) they lost to the more efficient appliances – which will limit any savings to customers.
John Seryak, a lobbyist representing the Ohio Manufacturers Association, testified against the bill, flagging to lawmakers language that requires utilities to include in their application a plan to exercise control over the “demand or impacts” of renewable energy sources like wind and solar. He said this could allow utilities to “shut down” companies that rely on rooftop-generated solar.
A throughline under much of the opposition: a deep mistrust of Ohio’s utilities. The legislation that ended energy efficiency programs in Ohio, House Bill 6, sent its champion to prison for 20 years. He was accused of taking a bribe via a nonprofit he secretly controlled from FirstEnergy. The company’s CEO and a senior vice president have been charged and await trial for bribing Householder along with the former PUCO chairman as well. American Electric Power, meanwhile, contributed $700,000 to Householder’s nonprofit. The company has not been criminally charged, but the company told its investors it has set aside $19 million to settle a lawsuit brought against it in connection with HB6 by the U.S. Securities and Exchange Commission.
FirstEnergy didn’t register to lobby on the bill. AEP and AES Ohio, two of its peers, support it.
Jake Zuckerman covers state politics and policy for Cleveland.com and The Plain Dealer.