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New Energy Study Questions Need for Energy Efficiency Mandates

Date: February 18, 2014

Ohioans for Sustainable Jobs, of which NFIB/Ohio is a member, recently released the results of a new independent study on the impact of the energy efficiency mandates contained in Senate Bill 221 from the 127th Ohio General Assembly.  The study shows the negative impacts the energy efficiency mandates have had on customers in Ohio since their implementation.  The study shows the need for Senate Bill 58, currently pending before the Ohio Public Utilities Committee, to help stem the tide of electric rate increases for Ohio businesses.

The study was prepared by Jonathan Lesser, PhD, a noted economist.  According to the study, if the rate of growth of the electric distribution utilities continues to average 12% per year, Ohio rate payers will be paying $500 million per year as a result of the mandate.

Additionally noted in the study, Ohio is part of PJM, a regional transmission organization that encompasses all or parts of 13 states, and oversees an integrated wholesale energy market.  As this market is integrated, any Ohio usage reduction is spread throughout the PJM market.

The study is available here:

This leads to the very real effect of Ohio businesses subsidizing out of state competitors.  Meaning, out of state businesses benefit from the Ohio energy mandate, while not incurring any of the associated costs.  The study indicates that upwards of 80% of the alleged benefits of the mandate go to those who do not pay for those benefits.

Finally, opponents have indicated a wholesale price suppression benefit as a result of Ohio's energy efficiency mandate.  According to the study, individual customers pay a monthly tax that is five to ten times greater than any reduction on their monthly bills.

NFIB/Ohio believes this study shows the true negative impacts Ohio's energy efficiency mandate is having on Ohio businesses' electric bills.  A rate calculator has been created to allow interested parties to see the impact on their electric bill. 

If you have any questions regarding Senate Bill 58, please contact NFIB/Ohio Legislative Director Chriss Ferruso at chris.ferruso@nfib.org or at 614-221-4107.

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