Greens, FirstEnergy nail down settlement on efficiency program

Dive Brief:

  • Environmental groups in Ohio have agreed to a settlement that will move ahead FirstEnergy's new slate of efficiency programs after the utility made several revisions including striking a provision allowing it to profit from work done by other parties, Midwest Energy News reports. 
  • The utility slowed its efficiency efforts after Ohio froze efficiency mandates in 2014. However, in December Ohio Gov. John Kasich (R) vetoed a bill to extend the freeze
  • The slate of proposals now being considered could cost almost $450 million by some estimates.

Dive Insight:

FirstEnergy's efficiency programs have been dormant a couple of years, but efficiency groups are heralding a new agreement that aims to get the efforts back up and running. The utility filed its efficiency proposals in April 2016, but the programs drew criticism from advocates who said they would allow the company to profit from work done by other entities.

The stipulation, agreed to last month, confirms that "the Companies may not receive shared savings for the energy savings under the Customer Action Program or the historic Mercantile Customer Program." Under FirstEnergy's original proposal, it could have turned a profit off projects administered by others, including municipalities administering Property Assessed Clean Energy programs. 

Consumer advocates had taken exception to the proposal. A utility "should only receive shared savings profits for programs that it develops and administers for the benefit of customers," Richard Spellman, an engineer testifying for the Office of the Ohio Consumers’ Counsel, told regulators.

The OCC, Midwest Energy News notes, is not a party to the agreement, believing the utility will still be collecting too high a profit on energy savings. Parties to the settlement include the Environmental Defense Fund, Environmental Law & Policy Center, EnerNOC and Ohio Partners for Affordable Energy.

Also, during the 2017 – 2019 efficiency planning period, FirstEnergy said it would "continue to offer eligible installed energy efficiency resources, which meet PJM offering requirements, into the PJM base residual and incremental capacity auctions." The utility has agreed to offer a reasonable percentage, "at least 60%," according to the agreement, of eligible planned energy efficiency resources, which meet PJM offering requirements, into the PJM base residual capacity auction.

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Filed Under: Efficiency & Demand Response
Top image credit: Bob Smith