Energy Incentive Programs, Ohio

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Updated July 2015

Ohio’s 2008 law establishing an energy efficiency resource standard (EERS) was overturned by the state legislature in 2014. However, many utilities continue to offer energy efficiency programs. Ohio utilities budgeted almost $190 million in 2014 across their various offerings to promote customer energy efficiency.  

What public-purpose-funded energy efficiency programs are available in my state?

Ohio's 1999 electricity  restructuring law created a systems benefit charge (SBC) to fund energy efficiency and renewable projects, but ratepayer funds have not been collected pursuant to it since 2010. The fund is administered by the Ohio Development Services Agency.

What utility energy efficiency programs are available to me?

Duke Energy’s Smart Saver Incentive program provides rebates for high efficiency lighting, VFDs, pumps, HVAC equipment (including chillers), IT, industrial processes, and food service equipment. The Smart Saver Custom Incentive program is available for measures outside of the prescriptive program’s scope. Both types of incentives are capped at 50% of the project’s incremental cost. On-line, off-site, and on-site energy assessments are also available for large businesses. 

AEP Ohio’s Energy Savings programs provide industry-tailored guidance and resources for reducing energy use. The Prescriptive program offers a variety of incentives for HVAC, lighting, motors and drives, refrigeration, and food service equipment. The Custom program provides an incentive of $0.08/kWh for first-year savings for eligible projects not covered in the prescriptive program. Pre-approval is required. A number of other programs may be relevant to federal customers depending on the facility type and annual energy use. Please check the AEP Ohio website for a full list of incentives available through their established and pilot programs.

The Ohio subsidiaries of First Energy (Ohio Edison, Toledo Edison, and The Illuminating Company) suspended the majority of their energy efficiency programs, effective December 31st, 2014. 

Dayton Power & Light offers prescriptive rebates for lighting, HVAC, motors and drives, and compressed air systems through its Rapid Rebates program. A complementary program, Custom Rebates, provides an incentive of between $0.05 and $0.10 (depending on the measure type) per first-year kWh saved, as well as $50 (for lighting) to $100 (for all other measure types) per kW reduced for energy-saving initiatives that fall outside of the Rapid Rebates program. Demonstration of savings persistence is emphasized and DP&L reserves the right to verify savings through inspection. DP&L’s New Construction program offers incentives for new building designs that exceed the lighting power density and whole building performance allowances from ASHRAE 90.1-2007.

The Efficiency Smart program, established by American Municipal Power, Inc., offers prescriptive and custom incentives to customers of participating municipal utilities. The Business Energy Rebates program provides incentives for HVAC, lighting and controls, motors and variable frequency drives, compressed air, refrigeration, and food service equipment. Annual electric usage must be between 20,000 kWh and 500,000 kWh to be eligible. The custom option offers tailored guidance on cost-effective energy reduction projects and is designed for facilities with annual electric usage exceeding 500,000 kWh.

Vectren offers prescriptive rebates for efficient boilers and furnaces as well as boiler tune-ups. Custom incentives are available for other measures that conserve natural gas, capped at 30% of the project cost or $25,000.

What load management/demand response options are available to me?

The PJM Interconnection (PJM), a regional transmission organization (RTO), offers several demand response programs. Two specific programs may be attractive to federal facilities in the PJM footprint:

  • The Economic Load Response program allows electricity users to provide load reductions in exchange for a payment based on hourly wholesale electricity prices. Participation is fully voluntary. Customers start by submitting load reduction bids through their curtailment service provider (any existing PJM member, such as their utility, a third-party electricity supplier, or a specialty CSP) of at least 100 kW into the day-ahead energy market. Participants whose bids are accepted are paid for their load reductions based upon the day-ahead, hourly electricity market prices (the day-ahead “locational marginal price,” or LMP). Reductions are figured based on a customer baseline load (CBL), which is essentially the average of load levels for the same hours in four of the facility's previous non-responding days. Regardless of which type of firm it is, the CSP will generally offer to split the revenues with the customer at a pre-determined percentage. 

  • PJM’s emergency “capacity” program allows demand resources to participate in PJM’s Reliability Pricing Model (RPM) forward capacity market via a CSP. Participants pledge to either reduce their load by a specified amount (guaranteed load drop, GLD), or to a specific kW level (known as firm service level, FSL), within one or two hours of an event notification. Load reductions are mandatory and may occur up to ten times per year, lasting up to six hours per event. Penalties for non-compliance are substantial. Remuneration is based on the results of the annual RPM capacity auctions in various PJM regions. Remuneration levels for the 2016-17 PJM year (which begins June 1, 2016) are in the $22,000 per MW range for Ohio customers. Participants are also eligible to receive energy payments for actual reductions, if and when the program is called. 

In both programs, participants can provide load reductions either through curtailing electricity use or operating on-site generation consistent with local environmental regulations and permits.

Duke Energy’s PowerShare program remunerates participants for reducing load below a customer-specific baseline during summer weekdays when market prices are high. There are two options: a voluntary and mandatory one. Payments are higher for the mandatory program, but there is a penalty for not meeting the committed load shed during notified events. 

Duke also has a Real Time Pricing program, in which participants are alternatively credited or charged, based on the hourly price, for usage below or above a pre-determined customer baseline load profile.

Ohio’s First Energy subsidiary utilities (Ohio Edison, Toledo Edison, and The Illuminating Company) offer real-time and combination fixed and variable (e.g., block-and-swing) electric rate products. 

Utilities in the southwestern Ohio footprint of MISO (e.g., Vectren) may enroll interested customers in any of MISO’s various demand response offerings, from which they can receive payments for reducing load. Federal customers should contact their local utility representative to inquire about participation.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewables and Efficiency (DSIRE) provides information on programs that offer incentives for renewable distributed generation. Ohio currently has no programs of this type open to federal customers.

Are there energy efficiency programs sponsored by the state government?

For information on energy efficiency programs sponsored by state government, contact the Ohio Department of Development.

What additional opportunities are available to me?

Federal customers whose utilities have area-wide supply contracts through GSA (e.g., Dayton Power & Light, Duke Energy, Vectren, East Ohio Gas Company, and Ohio Edison Company), may be able to take advantage of 3rd-party financed energy efficiency projects called utility energy services contracts (UESCs). Information is available in GSA’s Energy Division Library. Federal facilities should contact their account executive to determine the level of each utility's participation.

PJM (see above in the demand response section) now allows energy efficiency projects to participate in its forward capacity markets based on its Reliability Pricing Model (RPM). To be eligible, EE projects must reduce load continuously by at least 100 kW during peak summer hours. This load reduction can be bid into PJM’s annual (for three years in advance) and “residual” (nearer-term) capacity auctions, and if selected will receive the auction clearing price. Interested customers can participate through energy service companies conducting ESPCs or utilities executing UESCs at their sites.