(A)(1)(a) Beginning in 2009, an electric distribution utility shall implement energy efficiency programs that achieve energy savings equivalent to at least three-tenths of one per cent of the total, annual average, and normalized kilowatt-hour sales of the electric distribution utility during the preceding three calendar years to customers in this state. An energy efficiency program may include a combined heat and power system placed into service or retrofitted on or after the effective date of the amendment of this section by S.B. 315 of the 129th general assembly, September 10, 2012, or a waste energy recovery system placed into service or retrofitted on or after September 10, 2012, except that a waste energy recovery system described in division (A)(38)(b) of section4928.01of the Revised Code may be included only if it was placed into service between January 1, 2002, and December 31, 2004. For a waste energy recovery or combined heat and power system, the savings shall be as estimated by the public utilities commission. The savings requirement, using such a three-year average, shall increase to an additional five-tenths of one per cent in 2010, seven-tenths of one per cent in 2011, eight-tenths of one per cent in 2012, nine-tenths of one per cent in 2013, and one per cent in 2014. In 2015 and 2016, an electric distribution utility shall achieve energy savings equal to the result of subtracting the cumulative energy savings achieved since 2009 from the product of multiplying the baseline for energy savings, described in division (A)(2)(a) of this section, by four and two-tenths of one per cent. If the result is zero or less for the year for which the calculation is being made, the utility shall not be required to achieve additional energy savings for that year, but may achieve additional energy savings for that year. The annual savings requirements shall be, for years 2017, 2018, 2019, and 2020, an additional one per cent of the baseline. For purposes of a waste energy recovery or combined heat and power system, an electric distribution utility shall not apply more than the total annual percentage of the electric distribution utility's industrial-customer load, relative to the electric distribution utility's total load, to the annual energy savings requirement.
(b) Beginning in 2009, an electric distribution utility shall implement peak demand reduction programs designed to achieve a one per cent reduction in peak demand in 2009 and an additional seventy-five hundredths of one per cent reduction each year through 2014. In 2015 and 2016, an electric distribution utility shall achieve a reduction in peak demand equal to the result of subtracting the cumulative peak demand reductions achieved since 2009 from the product of multiplying the baseline for peak demand reduction, described in division (A)(2)(a) of this section, by four and seventy-five hundredths of one per cent. If the result is zero or less for the year for which the calculation is being made, the utility shall not be required to achieve an additional reduction in peak demand for that year, but may achieve an additional reduction in peak demand for that year. In 2017 and each year thereafter through 2020, the utility shall achieve an additional seventy-five hundredths of one per cent reduction in peak demand.
(2) For the purposes of divisions (A)(1)(a) and (b) of this section:
(a) The baseline for energy savings under division (A)(1)(a) of this section shall be the average of the total kilowatt hours the electric distribution utility sold in the preceding three calendar years. The baseline for a peak demand reduction under division (A)(1)(b) of this section shall be the average peak demand on the utility in the preceding three calendar years, except that the commission may reduce either baseline to adjust for new economic growth in the utility's certified territory. Neither baseline shall include the load and usage of any of the following customers:
(i) Beginning January 1, 2017, a customer for which a reasonable arrangement has been approved under section4905.31of the Revised Code;
(ii) A customer that has opted out of the utility's portfolio plan under section4928.6611of the Revised Code;
(iii) A customer that has opted out of the utility's portfolio plan under Section 8 of S.B. 310 of the 130th general assembly.
(b) The commission may amend the benchmarks set forth in division (A)(1)(a) or (b) of this section if, after application by the electric distribution utility, the commission determines that the amendment is necessary because the utility cannot reasonably achieve the benchmarks due to regulatory, economic, or technological reasons beyond its reasonable control.
(c) Compliance with divisions (A)(1)(a) and (b) of this section shall be measured by including the effects of all demand-response programs for mercantile customers of the subject electric distribution utility, all waste energy recovery systems and all combined heat and power systems, and all such mercantile customer-sited energy efficiency, including waste energy recovery and combined heat and power, and peak demand reduction programs, adjusted upward by the appropriate loss factors. Any mechanism designed to recover the cost of energy efficiency, including waste energy recovery and combined heat and power, and peak demand reduction programs under divisions (A)(1)(a) and (b) of this section may exempt mercantile customers that commit their demand-response or other customer-sited capabilities, whether existing or new, for integration into the electric distribution utility's demand-response, energy efficiency, including waste energy recovery and combined heat and power, or peak demand reduction programs, if the commission determines that that exemption reasonably encourages such customers to commit those capabilities to those programs. If a mercantile customer makes such existing or new demand-response, energy efficiency, including waste energy recovery and combined heat and power, or peak demand reduction capability available to an electric distribution utility pursuant to division (A)(2)(c) of this section, the electric utility's baseline under division (A)(2)(a) of this section shall be adjusted to exclude the effects of all such demand-response, energy efficiency, including waste energy recovery and combined heat and power, or peak demand reduction programs that may have existed during the period used to establish the baseline. The baseline also shall be normalized for changes in numbers of customers, sales, weather, peak demand, and other appropriate factors so that the compliance measurement is not unduly influenced by factors outside the control of the electric distribution utility.
(d)(i) Programs implemented by a utility may include the following:
(I) Demand-response programs;
(II) Smart grid investment programs, provided that such programs are demonstrated to be cost-beneficial;
(III) Customer-sited programs, including waste energy recovery and combined heat and power systems;
(IV) Transmission and distribution infrastructure improvements that reduce line losses;
(V) Energy efficiency savings and peak demand reduction that are achieved, in whole or in part, as a result of funding provided from the electric partnership plan fund established by section4928.51of the Revised Code to benefit low-income customers through programs that include, but are not limited to, energy audits, the installation of energy efficiency insulation, appliances, and windows, and other weatherization measures.
(ii) No energy efficiency or peak demand reduction achieved under divisions (A)(2)(d)(i)(IV) and (V) of this section shall qualify for shared savings.
(iii) Division (A)(2)(c) of this section shall be applied to include facilitating efforts by a mercantile customer or group of those customers to offer customer-sited demand-response, energy efficiency, including waste energy recovery and combined heat and power, or peak demand reduction capabilities to the electric distribution utility as part of a reasonable arrangement submitted to the commission pursuant to section4905.31of the Revised Code.
(e) No programs or improvements described in division (A)(2)(d) of this section shall conflict with any statewide building code adopted by the board of building standards.
(B) In accordance with rules it shall adopt, the public utilities commission shall produce and docket at the commission an annual report containing the results of its verification of the annual levels of energy efficiency and of peak demand reductions achieved by each electric distribution utility pursuant to division (A) of this section. A copy of the report shall be provided to the consumers' counsel.
(C) If the commission determines, after notice and opportunity for hearing and based upon its report under division (B) of this section, that an electric distribution utility has failed to comply with an energy efficiency or peak demand reduction requirement of division (A) of this section, the commission shall assess a forfeiture on the utility as provided under sections4905.55to4905.60and4905.64of the Revised Code, either in the amount, per day per undercompliance or noncompliance, relative to the period of the report, equal to that prescribed for noncompliances under section4905.54of the Revised Code, or in an amount equal to the then existing market value of one renewable energy credit per megawatt hour of undercompliance or noncompliance. Revenue from any forfeiture assessed under this division shall be deposited to the credit of the advanced energy fund created under section4928.61of the Revised Code.
(D) The commission may establish rules regarding the content of an application by an electric distribution utility for commission approval of a revenue decoupling mechanism under this division. Such an application shall not be considered an application to increase rates and may be included as part of a proposal to establish, continue, or expand energy efficiency or conservation programs. The commission by order may approve an application under this division if it determines both that the revenue decoupling mechanism provides for the recovery of revenue that otherwise may be forgone by the utility as a result of or in connection with the implementation by the electric distribution utility of any energy efficiency or energy conservation programs and reasonably aligns the interests of the utility and of its customers in favor of those programs.
(E) The commission additionally shall adopt rules that require an electric distribution utility to provide a customer upon request with two years' consumption data in an accessible form.
(F)(1) As used in divisions (F)(2), (3), and (4) of this section, "portfolio plan" has the same meaning as in division (C)(1) of section4928.6610of the Revised Code.
(2) If an electric distribution utility has a portfolio plan in effect as of October 22, 2019, and that plan expires before December 31, 2020, the commission shall extend the plan through that date. All portfolio plans shall terminate on that date.
(3) If a portfolio plan is extended beyond its commission approved term by division (F)(2) of this section, the existing plan's budget shall be increased for the extended term to include an amount equal to the annual average of the approved budget for all years of the portfolio plan in effect as of October 22, 2019.
(4) All other terms and conditions of a portfolio plan extended beyond its commission-approved term by division (F)(2) of this section shall remain the same unless changes are authorized by the commission.
(G)(1) Not later than February 1, 2021, the commission shall determine the cumulative energy savings collectively achieved, since 2009, by all electric distribution utilities in this state as of December 31, 2020. In determining that cumulative total, the commission shall do both of the following:
(a) Include energy savings that were estimated by the commission to be achieved as of December 31, 2020, and banked under division (G) of section4928.662of the Revised Code;
(b) Use an energy savings baseline that is the average of the total kilowatt hours sold by all electric distribution utilities in this state in the calendar years 2018, 2019, and 2020. The baseline shall exclude the load and usage described in division (A)(2)(a)(i), (ii), and (iii) of this section. That baseline may also be reduced for new economic growth in the utility's certified territory as provided in division (A)(2)(a) of this section and adjusted and normalized as provided in division (A)(2)(c) of this section.
(2)(a) If the cumulative energy savings collectively achieved as determined by the commission under division (G)(1) of this section is at least seventeen and one-half per cent of the baseline described in division (G)(1)(b) of this section, then full compliance with division (A)(1)(a) of this section shall be deemed to have been achieved notwithstanding any provision of this section to the contrary.
(b) If the cumulative energy savings collectively achieved as determined by the commission under division (G)(1) of this section is less than seventeen and one-half per cent of the baseline described in division (G)(1)(b) of this section, then both of the following shall apply:
(i) The commission shall determine the manner in which further implementation of energy efficiency programs shall occur as may be reasonably necessary for collective achievement of cumulative energy savings equal to seventeen and one-half per cent, and not more, of the baseline described in division (G)(1)(b) of this section.
(ii) Full compliance with division (A)(1)(a) of this section shall be deemed to be achieved as of a date certain established by the commission notwithstanding any provision of this section to the contrary.
(3) Upon the date that full compliance with division (A)(1)(a) of this section is deemed achieved under division (G)(2)(a) or (b) of this section, any electric distribution utility cost recovery mechanisms authorized by the commission for compliance with this section shall terminate except as may be necessary to reconcile the difference between revenue collected and the allowable cost of compliance associated with compliance efforts occurring prior to December 31, 2021, for programs re-established under section4928.661of the Revised Code, and prior to the date upon which full compliance with division (A)(1)(a) of this section is deemed achieved, for all other compliance efforts. No such cost recovery mechanism shall be authorized by the commission beyond the period of time required to complete this final reconciliation.
Last updated August 6, 2025 at 3:17 PM