New Ohio Law Could Cut Bills
Many Ohio energy customers have sky high bill problems. Natural gas dependence and rising energy demand only makes customer bills worse. That’s why Ohio lawmakers have introduced a bill to reduce electricity rates by creating demand response programs. But what is demand response and how could it cut down your bills?
What HB427 Does For Ohio Customers
Electric rates rise during periods of high demand. This is called “scarcity pricing”. For this reason, Ohio electric prices tend to peak at different parts of the day. That’s especially true in the summer due to high use. House Bill 427 allows utilities to reduce their electric load during peak hours through demand response programs. If passed, PUCO would evaluate each demand response program based on whether it would lower prices and help protect the Ohio grid. Once approved, utilities would offer customers bill credits in exchange for giving up some control over their energy usage.
Specifically, your utility could change your thermostat setting by a few degrees during peak periods. For example, your utility may raise your summer AC setting by 1 or 2 degrees for an hour. You stay comfortable while reducing demand on the grid. And if more homes participate, it improves grid stability.
Of course, you can always override the changes if you want. But, your utility may remove you from the program if you do this too often.
Does Demand Response Cut Bills?
Ohio wouldn’t be the first state to use demand response programs. For instance, BGE in Maryland introduced the program in 2023 and have reportedly saved $10 million for their customers. Currently, Southern California Edison customers can earn up to $150 a month from June through September with their program. And Rocky Mountain Power customers earn monthly credit each year for participating in the UT Cool Keeper program.
Could This Lower Rates?
This program could be a great way to lower your Ohio electricity bills, earn credits and save energy. But, the key to having it make a bigger dent is to get a lot of customers to join the program. If more customers use less energy, then there’s more available. So, electric prices remain stable. This makes it possible for rates to lower over time.
It’s difficult to predict how much this could save customers. But, other states have already shown that this could work.
Will HB427 Become Law?
Right now, the bill is in the energy committee in the Ohio House. The bill may see some revisions before it passes through the House on its way to becoming law. However, the bill’s introduction does signal that Ohioans may see some welcome options to lower their bills.
As always, you can count on us to follow this story as it develops. You can also shop for the best electricity deals in town, right here at https://www.ohenergyratings.com.