Gita Subramony and Cameron Kinney, ERS
Presented at ACEEE Summer Study, August 6, 2015. Image credit: raedon
Energy efficiency programs are under attack in several states, including Indiana and Ohio, where programs have been eliminated or curtailed. In 2014 the Indiana state legislature introduced a bill allowing customers with 1 MW of demand or greater to opt out of paying in to the state energy efficiency fund. Proponents of the bill argued that the programs offered little value to industrial customers. This opt-out movement snowballed, and an amendment that would eliminate energy efficiency programs in the state altogether was adopted.
In Ohio, model legislation drafted by the American Legislative Exchange Council (ALEC) formed the basis of a successful effort to freeze the state’s renewable energy and efficiency goals and budgets. Despite the fact that Ohio’s programs achieved 3.1 MWh of savings between 2009 and 2011, special interest groups capitalized on the large industrial sector’s discontent with efficiency programs.
The industrial sector is typically the first line of attack on efficiency programs, with opponents arguing that the programs hurt businesses and consumers and promoting a pure market-based alternative. Organizations such as ALEC are attacking the viability of efficiency programs, and model legislation designed to restrict or defund efficiency efforts is being introduced in a growing number of jurisdictions. The authors contend that efficiency programs that neglect industrial customers will increasingly face funding challenges. This paper will document efforts to defund programs and will provide examples of programs that successfully engage industrial customers, illustrating strategies for maintaining efficiency program momentum and providing value for all customer groups.
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