Economic benefits of energy efficiency programs would result in direct savings to Ohio’s utility customers

COLUMBUS, Ohio, Jan. 18, 2005 (PRNewswire) — If Ohio’s major natural gas and electric utility companies implement energy efficiency programs, residential consumers could save a total of approximately $1.2 billion on their energy bills through decreased consumption by the year 2010, according to a recent study conducted by the American Council for an Energy-Efficient Economy (ACEEE).

The study, which was partially funded by the Office of the Ohio Consumers’ Counsel (OCC) as well as other organizations throughout the Midwest, also notes the significant economic boost in terms of jobs created when energy efficiency programs are utilized.

“In the wake of rising natural gas prices and the burden it has placed on the wallets of residential consumers, utility companies in Ohio and throughout the Midwest need to offer and support programs that will enable their customers to take control of their energy usage and ultimately lower their monthly bills,” said Janine Migden-Ostrander, Consumers’ Counsel. “For example, based on our calculations, using reasonable assumptions, customers in Ohio who participate in energy efficiency programs could save on average more than $300 annually on their electric and natural gas bills by the year 2010.”

ACEEE, a Washington-based nonprofit organization dedicated to advancing energy efficiency to benefit the economy and protect the environment, examined the potential economic benefits to the Midwest from reducing natural gas consumption. The report illustrates that by participating in energy efficiency programs and reducing energy usage by 5 percent, market prices for natural gas would become lower and all customers would benefit by saving money. In addition, the study cites natural gas-focused energy efficiency success stories from across the United States and legislative and regulatory policies that facilitate the programs.

Since 2002, wholesale natural gas prices have doubled. By 2006, if energy efficiency programs are not implemented, customers in the Midwest are expected to spend nearly $40 billion annually to heat their homes and businesses, according to the ACEEE report.

Energy efficiency programs, also referred to as demand side management programs, in which consumers control how much energy they use, could produce residential natural gas savings in Ohio of 1.8 percent in 2006, and would double by 2010 to 3.6 percent.

The report also predicts that over 5,000 new jobs would be created in Ohio by the year 2010 if energy efficiency programs were adopted. By the year 2020, that figure increases to over 12,000 new jobs. Another economic benefit of reducing energy consumption is an increase in disposable income. If consumers are using less energy, less natural gas needs to be purchased, thereby retaining $120 million in Ohio’s economy as a result of implementing energy efficiency programs in the year 2006 alone.

The types of programs that contribute to customer savings and job creation include more energy efficient new home construction; rebates on the purchase of furnace and boilers that meet the federal ENERGY STAR standard; and educating contractors to support a comprehensive one-stop shopping experience for customers to implement ENERGY STAR improvements, such as high efficiency heating and cooling equipment, duct work and insulation, in existing residences.

The annual investment needed to implement energy efficiency programs for residential, commercial and industrial customers in Ohio is $51 million in natural gas and $166 million in electricity by the year 2010. According to the ACEEE report, the benefits to consumers exceed the costs by nearly a 4 to 1 margin.

Typically, some states may have started with a $10 million investment upfront to fund a program in the first year, and savings accumulate over the next 10 to 15 years. The ACEEE study has based its estimates for the Midwest on half of the funding being provided upfront by the utilities and recovered through customer rates and the other half would be achieved through statutory and/or regulatory mechanisms.

“The results of the ACEEE report are extremely encouraging,” Migden- Ostrander said. “We must seriously look towards implementing new energy efficiency policies and support the funding mechanisms necessary to alleviate the potential for a natural gas crisis and help residential utility customers save money in the long run.

“The economic benefits far outweigh the costs. Jobs will be created, consumers will have more disposable income, which helps the state economy, and they will gain a sense of independence in their energy usage and consumption.”

The OCC will use information from the ACEEE report to encourage utility companies to implement energy efficiency programs so that residential consumers can benefit from using less energy and paying lower electric and natural gas bills.

The complete ACEEE report can be viewed on the OCC’s website at http://www.pickocc.org/ .

About the Office of the Ohio Consumers’ Counsel [ www.pickocc.org/ ]

The Office of the Ohio Consumers’ Counsel (OCC), the residential utility consumer advocate, represents the interests of 4.5 million households in proceedings before state and federal regulators and in the courts. The state agency also educates consumers about electric, natural gas, telephone and water issues and resolves complaints from individuals.

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