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Energy Efficiency Portfolio Standard

Investor-Owned Utility
Retail Supplier
Program Info
Program Type 
Energy Efficiency Resource Standard
Public Utilities Commission of Ohio

In May 2008, Ohio enacted broad electric industry restructuring legislation ([ SB 221]) containing energy efficiency requirements for investor-owned utilities. In addition to the efficiency standard, SB 221 established the [ Ohio Alternative Energy Resource Standard], (AEPS), requiring utilities to obtain 12.5% of their energy for distribution from renewable resources by 2024, and an additional 12.5% of electricity from advanced resources by 2025.

Electric utilities are required to implement energy efficiency and peak demand reduction programs that result in a cumulative electricity savings of 22% by the end of 2025, with specific annual benchmarks. In addition, utilities must reduce peak demand by 1% in 2009, and 0.75% annually through 2018. In 2018, the legislature must make recommendations for future peak demand reduction targets.

Calendar Year Electric Sales Reduction Cumulative Electric Savings Annual Peak Demand Reduction Cumulative Peak Demand Reduction
2009 0.3% 0.3% 1% 1%
2010 0.5% 0.8% 0.75% 1.75%
2011 0.7% 1.5% 0.75% 2.50%
2012 0.8% 2.3% 0.75% 3.25%
2013 0.9% 3.2% 0.75% 4.00%
2014 1.0% 4.2% 0.75% 4.75%
2015 1.0% 5.2% 0.75% 5.50%
2016 1.0% 6.2% 0.75% 6.25%
2017 1.0% 7.2% 0.75% 7.00%
2018 1.0% 8.2% 0.75% 7.75%
2019 2.0% 10.2%    
2020 2.0% 12.2%    
2021 2.0% 14.2%    
2022 2.0% 16.2%    
2023 2.0% 18.2%    
2024 2.0% 20.2%    
2025 2.0% 22.0%    

The baseline for sales reductions are calculated based on the average number of total kilowatt-hours sold during the previous three years. For peak demand reductions, the baseline is calculated by the average peak demand during the previous three years. The Public Utilities Commission of Ohio (PUCO) may alter the baseline to account for new economic growth in a utility's territory or weather changes.

In order to meet the targets, utilities may implement demand-response or customer-sited programs, or transmission and distribution infrastructure improvements. In 2012, the legislature passed a bill that allows certain combined heat and power and waste energy recovery systems to qualify for the Energy Efficiency Portfolio Standard. Systems only qualify if they are installed or retrofitted on or after September 9, 2012. Certain waste energy recovery systems installed in 2002-2004 may also qualify. A system may qualify for either the Renewable Energy Resource portion of the AEPS or the Energy Efficiency Portfolio Standard. Savings from combined heat and power or waste energy recovery must be calculated by the PUCO. The amount of savings claimed from these two resources cannot exceed the annual percentage of the utility's industrial-customer load.

Failure to comply with energy efficiency or peak demand reduction requirements will result in PUCO assessing a forfeiture upon the utility, which will be credited to the [ Advanced Energy Fund]. The amount of the forfeiture is either of the following:

  • An amount, per day per under-compliance or non-compliance, not greater than $10,000 per violation
  • An amount equal to the then existing market value of one renewable energy credit per megawatt hour of under-compliance or noncompliance