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HB6 and Impact on Energy Efficiency

In September, the Greater Cleveland Partnership (GCP) released a statement urging state leaders to repeal and potentially replace House Bill 6 (HB 6) to benefit consumers and employers of all sizes and industries. In 2019, HB 6 was signed into law.

In part, it aims to raise approximately $150 million a year in subsidies for two Ohio nuclear plants and two coal plants. GCP did not support HB 6, but emphasized the importance of reliable, competitive, and diverse energy sources.

The subsidy, that is set to be paid over the next 7 years to Energy Harbor, formerly FirstEnergy Solutions, is to be paid for by a rider on every Ohioan’s electric bill. There are additional subsidies and riders that provide money to two coal plants and six solar projects.

One of the arguments used to pass HB 6 was that Ohio’s nuclear plants provide a large amount of carbon free electricity and support jobs and communities where the plants are located, and they could be closed without state support. Adding additional costs to customers electric bills is never popular, so some supporters of the subsidy (some of whom had been opposed to the Energy Efficiency (EE) and Renewable Energy standards passed in 2008) voted in favor of removing the riders for the EE and RE programs to be able to claim a “savings” for electric customers.

While removing one rider for a slightly smaller one may seem like a good move for customers, it does not consider the full benefits that energy efficiency programs provide. As an administrator for EE programs since 2009, GCP/COSE has helped customers apply for the rebates that are available thanks to Ohio’s Energy Efficiency benchmarks. This has meant that in the past two years alone (2019 and 2020) the businesses and non-profit organizations in Northeast Ohio that we have helped, received incentives of nearly $3.4 million for the projects that were pursued. While some of these projects may have taken place without the EE programs, what we have heard from our customers and members is that many of them would not have been considered without the incentives available.

These projects have reduced the total amount of electricity used in the region by more than 107 million KWH. That is equivalent to powering 10,000 houses for about a year. This reduction in usage and the associated demand has positive impacts for all users, not just the companies that have received rebates. The reduced demand helps drive down the electricity costs and reduced the need to build new expensive power generating plants. This savings passes through to all customers and is not included in the discussion of eliminating the energy efficiency riders.

Discussions around HB 6 repeal and replace efforts will continue after Election Day and the Greater Cleveland Partnership has issued the following statement:

“We recommend a repeal and replace stance on HB 6 to remove the alleged stain of corruption on the law and to enable the restoration of the energy efficiency programs supported by our members,” said Joe Roman, President and CEO of the Greater Cleveland Partnership. “Our membership continues to encourage policies that provide incentives for businesses to leverage energy programming to foster growth. We recognize a level of flexibility may be needed to meet those goals, reverse HB 6, and balance Ohio’s energy environment. Extending the use and access to nuclear power may be appropriate, but policy must harness additional solutions that exist and look toward emerging sources.”

The perspective of the northeast Ohio business community was approved by the GCP Board of Directors and serves as a strong continuation of our members’ long-standing energy policy principles.

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Cleveland, Ohio 44115

(216) 592-2208