The following article was originally published in the Ohio Capital Journal and published on News5Cleveland.com under a content-sharing agreement.
Ohioans could soon be able to sign up for programs that reduce their energy bills in exchange for allowing the utility to dial back their consumption. These demand response programs already exist for big energy consumers like factories, but state Rep. Roy Klopfenstein, R-Haviland, thinks residential consumers should have the opportunity as well.
“This is one more tool in the toolbox that gives the distribution folks, the ability to manage the power so those that need it the most — and you can put whatever you want in there — that they are never without power,” he said.
In a press release describing the measure, House Bill 427, Klopfenstein offers a few examples. Utilities might roll back your smart thermostat on a really hot day, or cycle home appliances like your water heater.
Klopfenstein’s measure doesn’t specify the exact terms of a program. Instead, it directs state regulators to consider proposals from utilities so long as the programs are voluntary and open to everyone. It also requires that customers can override the power reductions. The Public Utility Commission of Ohio gets tasked with weighing whether programs are cost-effective for consumers and offer long-term savings to the energy grid.
Many states offer demand response programs for residential customers, with varying incentive or rebate structures. In California, for instance, PG&E’s Power Saver Rewards Program notifies customers that demand is high and then gives them a dollar per kWh of power they save.
“My rural cooperative has had a radio control on my electric hot water heater probably for 40 years,” Klopfenstein said. “This gives them the ability to shut the hot water heater off to limit demand during peak times. And in 40 years, I have never recognized when it was shut off.”
Although he got paid up-front to participate, Klopfenstein said he doesn’t get a monthly incentive on his bill. Because he gets power through a co-op, though, he said the better they manage demand the lower his bills are overall.
“Now, I will tell you what I believe consumers will want today, they’re going to want to be rewarded probably more than I am — and that’s OK.” Klopfenstein said. “Somewhere in there there’s a balance, but we need to give them a tool to manage the power distribution.”
Supply and demand
Klopfenstein sponsored a sweeping energy measure known as House Bill 15 earlier this year. That measure aimed to encourage new energy generation by offering tax incentives to new facilities and streamlining the regulatory process.
The bill also ended a controversial coal plant bailout tied to the House Bill 6 scandal.
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Notably, that bill got broad bipartisan support and Rob Kelter, managing attorney with the Environmental Law & Policy Center, sees Klopfenstein’s newest proposal as a continuation.
“Good energy policy manages both supply and demand. Ohio lawmakers took measures in HB 15 to increase supply, and we commend Rep. Klopfenstein and Chair (Rep. Adam) Holmes for moving quickly to lower demand,” Kelter said. “Republicans and Democrats worked together on HB 15, and we know there will be similar cooperation here.”
In a press release, the Environmental Law & Policy Center estimates residential demand response could “create estimated net savings of between $34.5 million and $104 million for the utility system, depending on participation rate.” The group added that companies can roll out programs to reduce demand far faster than they can increase supply by standing up new power plants — even with HB 15 greasing the skids.
Klopfenstein explained residential demand response almost made it into HB 15 itself. But it showed up as an amendment late in the process, and lawmakers stripped it out so they could debate it further.
Still, the idea appears to have supporters on both sides of the aisle. Nolan Rutschilling from the Ohio Environmental Council said demand response is “crucial to addressing skyrocketing energy costs.”
“This legislation allows utilities and retail energy providers to establish programs that save customers money, reduce strain on our electric grid, and create more capacity in the PJM market, lessening the burden on all energy customers,” he added.
Ohio Conservative Energy Forum Executive Director Shayna Fritz said, “providing demand response solutions will ensure we are helping our energy remain reliable during peak times. We worked with Ohio lawmakers on critical energy legislation such as House Bill 15 and look forward to working with them again to develop the best solutions for all residents.”
