Ohio's Energy Efficiency Resource Standard: Where are the Real Savings?

Abstract

Ohio's energy efficiency resource standard (EERS) requires regulated utilities to meet a schedule of reductions (above federal requirements) in customer energy consumption that cumulate to 22 percent by 2025. Utilities are to comply with these purely political requirements by devising programs whose costs are recoverable in rates. All utilities have been in compliance since 2009, but that compliance means little because nearly all the savings have come from utility-offered discounts on energy-saving light bulbs. Available data show that the majority of claimed savings come from transfers by other ratepayers to "free riders" who did not require subsidies to induce purchases. Data indicate that energy use reductions net of free ridership are already falling short of EERS requirements. The shortfalls will probably grow in the future as cost-effective savings opportunities (that must exceed federal standards) diminish while the costs of compliance rise.