Ohio Supreme Court paves the way for future expansion of energy efficiency

(COLUMBUS, OH) In a landmark decision that could help expand the application of energy efficiency statewide, the Ohio Supreme Court today overturned a 2017 ruling by the state Public Utilities Commission establishing a first-of-its-kind cost cap on energy efficiency program spending for utility giant, FirstEnergy.

“Today’s Ohio Supreme Court decision affirms the true value of energy efficiency, which is widely regarded as one of the best energy solutions, because it is non-polluting and less expensive than other generation resources that require major capital investments and ongoing fuel and maintenance costs,” said John Finnigan, lead counsel for Environmental Defense Fund’s Energy Program. “From a legal perspective, this is an important ruling because it upholds the notion that the legislature has primacy in crafting energy policy; regulators can’t apply a cost cap where the statute does not expressly provide for one.”

Today’s ruling comes after Environmental Defense Fund and other parties appealed this decision by the PUCO, arguing that the state’s energy efficiency statute – enacted in 2008 by the legislature – does not contain a cost cap, and therefore the PUCO does not have the authority to enforce one on FirstEnergy, or any of the other four utilities in the state. In its filing, EDF pointed out that each energy efficiency program must pass a cost-effectiveness test, where the utility must demonstrate that program benefits outweigh the costs.

However, this new ruling cannot technically do anything for the Ohioans or the environment till HB6 – which eviscerated Ohio’s energy efficiency programs when passed this summer – is overturned. There is a referendum campaign underway, and if successful, this new ruling by the Supreme Court will give utilities the freedom to implement their energy efficiency programs broadly and unhindered by an arbitrary cap on costs exceeding 4% of their total revenues.