130th Ohio General Assembly
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S. B. No. 58  As Introduced
As Introduced

130th General Assembly
Regular Session
2013-2014
S. B. No. 58


Senator Seitz 



A BILL
To review and possibly modify the energy efficiency, peak demand reduction, and alternative energy resource provisions established by Ohio law governing competitive retail electric service.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1.  (A) As used in this section, "changes in electric service occurring since 2008" includes the following:
(1) Development of large natural gas resources in Ohio;
(2) Reduced prices for electricity on the wholesale market;
(3) The impact that energy efficiency programs may have had on depressing wholesale prices in the PJM interconnection regional transmission organization auction area or improving the reliability of the electric grid;
(4) Consideration of whether energy efficiency is a least cost resource and whether it helps offset or defer the cost of new generation facilities;
(5) Whether the newly-authorized inclusion of combined heat and power and waste energy recovery in the energy efficiency standards makes it possible to cost-effectively meet the energy efficiency benchmarks going forward;
(6) Whether renewable energy resources have helped to depress wholesale prices in the PJM auction market;
(7) The hedge value of stable long-term renewables contract prices and the long-term price impact of the low cost of renewable fuels; and
(8) Whether renewables can offset the cost of new generation facilities and whether they help to achieve energy independence from foreign fuel sources.
(B) Given the changes in electric service occurring since 2008, it is the General Assembly's intent to review and possibly modify the energy efficiency, peak demand reduction, and alternative energy resource provisions established by Ohio law governing competitive retail electric service and first enacted in Am. Sub. S.B. 221 of the 127th General Assembly.
(1) In its review, the General Assembly shall consider whether:
(a) Energy efficiency and peak demand reduction requirements under section 4928.66 of the Revised Code should be frozen at a certain level, amended, or repealed;
(b) Energy efficiency and peak demand reduction requirements under section 4928.66 of the Revised Code, if amended, should be reduced or increased;
(c) An electric distribution utility may voluntarily design an energy efficiency and peak demand reduction plan that purposely exceeds the minimum requirements established in section 4928.66 of the Revised Code, and if so, whether the costs of exceeding the statutory requirements should be a nonbypassable charge that customers must pay;
(d) The Public Utilities Commission should be granted the authority to require an electric distribution utility to implement an energy efficiency and peak demand reduction plan that exceeds the minimum requirements established in section 4928.66 of the Revised Code or to require an electric distribution utility to bid all or part of its projected energy efficiency and peak demand reduction portfolios into the PJM base residual auction, and if so, whether the definition of energy efficiency savings in Ohio law should be consistent with that of PJM;
(e) An electric distribution utility, which designs an energy efficiency and peak demand reduction plan that exceeds the minimum requirements established in section 4928.66 of the Revised Code, should be permitted to implement incentive plans or shared savings plans that allow it to earn a profit upon exceeding the requirements established in its energy efficiency and peak demand reduction plan;
(f) A three per cent cost cap should apply to energy efficiency and peak demand reduction requirements under section 4928.66 of the Revised Code;
(g) Alternative energy resource requirements under division (B) of section 4928.64 of the Revised Code should be frozen at a certain level, amended, or repealed;
(h) Alternative energy resource requirements under division (B) of section 4928.64 of the Revised Code, if amended, should be reduced or increased;
(i) The compliance payments under division (C)(2) of section 4928.64 of the Revised Code, including those for failure to meet solar energy requirements, should be amended or indexed to the Consumer Price Index;
(j) The three per cent cost cap provisions under division (C)(3) of section 4928.64 of the Revised Code have been properly interpreted by the Commission;
(k) The three per cent cost cap under division (C)(3) of section 4928.64 of the Revised Code should be amended;
(l) Electric distribution utilities and electric services companies may exceed the three per cent cost cap under division (C)(3) of section 4928.64 of the Revised Code, and if so, to what extent, and whether the additional costs may be recovered from some or all customers and how that may be done;
(m) Ohio's alternative energy resource law should continue to provide separate requirements for particular forms of energy, such as solar energy, or whether the law should be changed to apply equally to all forms of energy, thereby allowing all energy providers to compete directly;
(n) A portion of the renewable energy resources implemented by an electric distribution utility or electric services company should be met, as is currently required under division (B)(3) of section 4928.64 of the Revised Code, through facilities located in this state or with resources shown to be deliverable into this state;
(o) Requirements for advanced energy under section 4928.64 of the Revised Code are achievable without providing incentives to meet the capital costs for meeting the advanced energy requirements or whether these requirements are necessary given the current low price of electricity and the excess generating capacity that now exist;
(p) The costs incurred by electric distribution utilities and electric services companies in complying with the energy efficiency and peak demand reduction requirements under section 4928.66 of the Revised Code and the alternative energy resource requirements under division (B) of section 4928.64 of the Revised Code are bypassable, and if so, to what extent, and whether these costs should be bypassable or nonbypassable, and if so, to what extent;
(q) Electric distribution utilities and electric services companies should be required to provide, as a separate line item on customer bills, the utility's or company's cost of complying with the energy efficiency and peak demand reduction requirements under section 4928.66 of the Revised Code and the alternative energy resource requirements under division (B) of section 4928.64 of the Revised Code;
(r) A comprehensive cost-benefit analysis of the competitive retail electric service law, including renewable and advanced energy requirements, energy efficiency requirements, and peak demand reduction requirements, should be prepared to determine whether consumers are deriving sufficient benefits based on how the benefits and costs are allocated;
(s) The Commission has correctly upheld the intent of Am. Sub. S.B. 221 of the 127th General Assembly in permitting incentive programs that have the effect of making certain charges nonbypassable;
(t) Renewable energy resource providers and energy efficiency program providers face undue legal barriers to competing more cost effectively and whether such barriers could be reduced by implementing programs such as virtual net metering and feed-in tariffs, facilitating master limited partnerships, decentralizing portions of the transmission and distribution system by investing in distributed generation and microgrids, or pursuing other state efforts to drive down costs of energy efficiency and renewable energy;
(u) Statutes or administrative rules are needed to permit more accurate and transparent levelized cost comparisons of the actual cost of the various fuels available to produce electricity for this state;
(v) Adequate processes exist to determine whether electric distribution utilities and electric services companies prudently purchase energy to fulfill the requirements of the energy efficiency law and alternative energy resource law; and
(w) The law should be amended to include provisions to protect the ability of an electric distribution utility or an electric services company to recover costs committed to or incurred to comply with mandates and to protect the validity of contracts made in good faith pursuant to current law, if the energy efficiency, peak demand reduction, and alternative energy resource standards are significantly altered or repealed, and if the law is significantly amended or repealed, to what extent such protections should be granted.
(C) The General Assembly also shall review the following:
(1) How best to protect ratepayers against future price changes that may occur if the energy efficiency, peak demand reduction, and alternative energy resource requirements remain law;
(2) What the appropriate standards should be for measuring the amount of energy savings and peak demand reduction that an electric distribution company achieves in order to determine whether such savings or reduction may count toward compliance with the energy efficiency and peak demand reduction requirements under section 4928.66 of the Revised Code, including whether the Commission should be directed to do the following:
(a) Clarify that such savings be calculated on an annualized basis based on gross savings and not just those savings net of savings attributed to the customer;
(b) Substantially broaden the nature of the energy savings that may be counted towards compliance with the requirements under section 4928.66 of the Revised Code as compared to that allowed under current Commission rules and practice; and
(3) What effects there would be on the Ohio job market and on planned in-process investments and committed investments in Ohio, if cost recovery or contract protections as described in division (B)(1)(w) of this section were established following the alteration or repeal of the state's energy efficiency, peak demand reduction, and alternative energy resource standards.
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