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| To review and possibly modify the energy efficiency, | 1 |
| peak demand reduction, and alternative energy | 2 |
| resource provisions established by Ohio law | 3 |
| governing competitive retail electric service. | 4 |
| Section 1. (A) As used in this section, "changes in electric | 5 |
| service occurring since 2008" includes the following: | 6 |
| (1) Development of large natural gas resources in Ohio; | 7 |
| (2) Reduced prices for electricity on the wholesale market; | 8 |
| (3) The impact that energy efficiency programs may have had | 9 |
| on depressing wholesale prices in the PJM interconnection regional | 10 |
| transmission organization auction area or improving the | 11 |
| reliability of the electric grid; | 12 |
| (4) Consideration of whether energy efficiency is a least | 13 |
| cost resource and whether it helps offset or defer the cost of new | 14 |
| generation facilities; | 15 |
| (5) Whether the newly-authorized inclusion of combined heat | 16 |
| and power and waste energy recovery in the energy efficiency | 17 |
| standards makes it possible to cost-effectively meet the energy | 18 |
| efficiency benchmarks going forward; | 19 |
| (6) Whether renewable energy resources have helped to depress | 20 |
| wholesale prices in the PJM auction market; | 21 |
| (7) The hedge value of stable long-term renewables contract | 22 |
| prices and the long-term price impact of the low cost of renewable | 23 |
| fuels; and | 24 |
| (8) Whether renewables can offset the cost of new generation | 25 |
| facilities and whether they help to achieve energy independence | 26 |
| from foreign fuel sources. | 27 |
| (B) Given the changes in electric service occurring since | 28 |
| 2008, it is the General Assembly's intent to review and possibly | 29 |
| modify the energy efficiency, peak demand reduction, and | 30 |
| alternative energy resource provisions established by Ohio law | 31 |
| governing competitive retail electric service and first enacted in | 32 |
| Am. Sub. S.B. 221 of the 127th General Assembly. | 33 |
| (1) In its review, the General Assembly shall consider | 34 |
| whether: | 35 |
| (a) Energy efficiency and peak demand reduction requirements | 36 |
| under section 4928.66 of the Revised Code should be frozen at a | 37 |
| certain level, amended, or repealed; | 38 |
| (b) Energy efficiency and peak demand reduction requirements | 39 |
| under section 4928.66 of the Revised Code, if amended, should be | 40 |
| reduced or increased; | 41 |
| (c) An electric distribution utility may voluntarily design | 42 |
| an energy efficiency and peak demand reduction plan that purposely | 43 |
| exceeds the minimum requirements established in section 4928.66 of | 44 |
| the Revised Code, and if so, whether the costs of exceeding the | 45 |
| statutory requirements should be a nonbypassable charge that | 46 |
| customers must pay; | 47 |
| (d) The Public Utilities Commission should be granted the | 48 |
| authority to require an electric distribution utility to implement | 49 |
| an energy efficiency and peak demand reduction plan that exceeds | 50 |
| the minimum requirements established in section 4928.66 of the | 51 |
| Revised Code or to require an electric distribution utility to bid | 52 |
| all or part of its projected energy efficiency and peak demand | 53 |
| reduction portfolios into the PJM base residual auction, and if | 54 |
| so, whether the definition of energy efficiency savings in Ohio | 55 |
| law should be consistent with that of PJM; | 56 |
| (e) An electric distribution utility, which designs an energy | 57 |
| efficiency and peak demand reduction plan that exceeds the minimum | 58 |
| requirements established in section 4928.66 of the Revised Code, | 59 |
| should be permitted to implement incentive plans or shared savings | 60 |
| plans that allow it to earn a profit upon exceeding the | 61 |
| requirements established in its energy efficiency and peak demand | 62 |
| reduction plan; | 63 |
| (f) A three per cent cost cap should apply to energy | 64 |
| efficiency and peak demand reduction requirements under section | 65 |
| 4928.66 of the Revised Code; | 66 |
| (g) Alternative energy resource requirements under division | 67 |
| (B) of section 4928.64 of the Revised Code should be frozen at a | 68 |
| certain level, amended, or repealed; | 69 |
| (h) Alternative energy resource requirements under division | 70 |
| (B) of section 4928.64 of the Revised Code, if amended, should be | 71 |
| reduced or increased; | 72 |
| (i) The compliance payments under division (C)(2) of section | 73 |
| 4928.64 of the Revised Code, including those for failure to meet | 74 |
| solar energy requirements, should be amended or indexed to the | 75 |
| Consumer Price Index; | 76 |
| (j) The three per cent cost cap provisions under division | 77 |
| (C)(3) of section 4928.64 of the Revised Code have been properly | 78 |
| interpreted by the Commission; | 79 |
| (k) The three per cent cost cap under division (C)(3) of | 80 |
| section 4928.64 of the Revised Code should be amended; | 81 |
| (l) Electric distribution utilities and electric services | 82 |
| companies may exceed the three per cent cost cap under division | 83 |
| (C)(3) of section 4928.64 of the Revised Code, and if so, to what | 84 |
| extent, and whether the additional costs may be recovered from | 85 |
| some or all customers and how that may be done; | 86 |
| (m) Ohio's alternative energy resource law should continue to | 87 |
| provide separate requirements for particular forms of energy, such | 88 |
| as solar energy, or whether the law should be changed to apply | 89 |
| equally to all forms of energy, thereby allowing all energy | 90 |
| providers to compete directly; | 91 |
| (n) A portion of the renewable energy resources implemented | 92 |
| by an electric distribution utility or electric services company | 93 |
| should be met, as is currently required under division (B)(3) of | 94 |
| section 4928.64 of the Revised Code, through facilities located in | 95 |
| this state or with resources shown to be deliverable into this | 96 |
| state; | 97 |
| (o) Requirements for advanced energy under section 4928.64 of | 98 |
| the Revised Code are achievable without providing incentives to | 99 |
| meet the capital costs for meeting the advanced energy | 100 |
| requirements or whether these requirements are necessary given the | 101 |
| current low price of electricity and the excess generating | 102 |
| capacity that now exist; | 103 |
| (p) The costs incurred by electric distribution utilities and | 104 |
| electric services companies in complying with the energy | 105 |
| efficiency and peak demand reduction requirements under section | 106 |
| 4928.66 of the Revised Code and the alternative energy resource | 107 |
| requirements under division (B) of section 4928.64 of the Revised | 108 |
| Code are bypassable, and if so, to what extent, and whether these | 109 |
| costs should be bypassable or nonbypassable, and if so, to what | 110 |
| extent; | 111 |
| (q) Electric distribution utilities and electric services | 112 |
| companies should be required to provide, as a separate line item | 113 |
| on customer bills, the utility's or company's cost of complying | 114 |
| with the energy efficiency and peak demand reduction requirements | 115 |
| under section 4928.66 of the Revised Code and the alternative | 116 |
| energy resource requirements under division (B) of section 4928.64 | 117 |
| of the Revised Code; | 118 |
| (r) A comprehensive cost-benefit analysis of the competitive | 119 |
| retail electric service law, including renewable and advanced | 120 |
| energy requirements, energy efficiency requirements, and peak | 121 |
| demand reduction requirements, should be prepared to determine | 122 |
| whether consumers are deriving sufficient benefits based on how | 123 |
| the benefits and costs are allocated; | 124 |
| (s) The Commission has correctly upheld the intent of Am. | 125 |
| Sub. S.B. 221 of the 127th General Assembly in permitting | 126 |
| incentive programs that have the effect of making certain charges | 127 |
| nonbypassable; | 128 |
| (t) Renewable energy resource providers and energy efficiency | 129 |
| program providers face undue legal barriers to competing more cost | 130 |
| effectively and whether such barriers could be reduced by | 131 |
| implementing programs such as virtual net metering and feed-in | 132 |
| tariffs, facilitating master limited partnerships, decentralizing | 133 |
| portions of the transmission and distribution system by investing | 134 |
| in distributed generation and microgrids, or pursuing other state | 135 |
| efforts to drive down costs of energy efficiency and renewable | 136 |
| energy; | 137 |
| (u) Statutes or administrative rules are needed to permit | 138 |
| more accurate and transparent levelized cost comparisons of the | 139 |
| actual cost of the various fuels available to produce electricity | 140 |
| for this state; | 141 |
| (v) Adequate processes exist to determine whether electric | 142 |
| distribution utilities and electric services companies prudently | 143 |
| purchase energy to fulfill the requirements of the energy | 144 |
| efficiency law and alternative energy resource law; and | 145 |
| (w) The law should be amended to include provisions to | 146 |
| protect the ability of an electric distribution utility or an | 147 |
| electric services company to recover costs committed to or | 148 |
| incurred to comply with mandates and to protect the validity of | 149 |
| contracts made in good faith pursuant to current law, if the | 150 |
| energy efficiency, peak demand reduction, and alternative energy | 151 |
| resource standards are significantly altered or repealed, and if | 152 |
| the law is significantly amended or repealed, to what extent such | 153 |
| protections should be granted. | 154 |
| (C) The General Assembly also shall review the following: | 155 |
| (1) How best to protect ratepayers against future price | 156 |
| changes that may occur if the energy efficiency, peak demand | 157 |
| reduction, and alternative energy resource requirements remain | 158 |
| law; | 159 |
| (2) What the appropriate standards should be for measuring | 160 |
| the amount of energy savings and peak demand reduction that an | 161 |
| electric distribution company achieves in order to determine | 162 |
| whether such savings or reduction may count toward compliance with | 163 |
| the energy efficiency and peak demand reduction requirements under | 164 |
| section 4928.66 of the Revised Code, including whether the | 165 |
| Commission should be directed to do the following: | 166 |
| (a) Clarify that such savings be calculated on an annualized | 167 |
| basis based on gross savings and not just those savings net of | 168 |
| savings attributed to the customer; | 169 |
| (b) Substantially broaden the nature of the energy savings | 170 |
| that may be counted towards compliance with the requirements under | 171 |
| section 4928.66 of the Revised Code as compared to that allowed | 172 |
| under current Commission rules and practice; and | 173 |
| (3) What effects there would be on the Ohio job market and on | 174 |
| planned in-process investments and committed investments in Ohio, | 175 |
| if cost recovery or contract protections as described in division | 176 |
| (B)(1)(w) of this section were established following the | 177 |
| alteration or repeal of the state's energy efficiency, peak demand | 178 |
| reduction, and alternative energy resource standards. | 179 |