Policies and Initiatives

Ohio

The following are a few of the policies and initiatives the OCHPC is currently engaging on in Ohio.

RPS and EERS

In 2008, Ohio established clean energy standards - a renewable portfolio standard (RPS) of 12.5% by 2025, and an energy efficiency resource/peak demand reduction standard (EERS/PDR) of 22.5% by 2025. These standards set minimum benchmarks for electric distribution utilities in terms of how much renewable energy they procured from the competitive market, and how much energy they saved through energy efficiency programs offered to their customers.  

In 2012, Ohio Senate Bill 315 was enacted, expanding the eligible technologies that utilities and competitive suppliers could use to meet their annual EERS and RPS benchmarks. 

Waste Heat to Power was added as a qualifying renewable energy technology under the state’s RPS and EERS. Therefore, any WHP project can seek the a renewable energy certificate for the power produced by the system, or seek a rebate or incentive for the energy saved by the installation of a WHP system.

Combined heat and power (CHP) was added as qualifying energy efficiency measure, and therefore, electric distribution utilities could offer financial incentives to customers who installed a CHP system. In return, the utility can claim the energy saved by the CHP system installed by their customer. Qualifying projects must meet minimum performance metrics such as achieving 60% overall efficiency, and at least 20% of the useful energy produced must be thermal energy.

All four investor-owned utilities have included CHP-specific program criteria incldued in their 2017 and 2018 energy efficiency program plans.

Electric Utility Incentives for CHP

Each of Ohio's four investor owned utilities (AEP Ohio, Dayton Power & Light, Duke, and FirstEnergy) is required to submit energy efficiency portfolio plans, detailing energy efficiency efforts, and receive approval for these plans by the Public Utilities Commission of Ohio. Most recently, all four utilities filed new proposals in 2016. The current incentive levels are detailed below. 

AEP Ohio (Plan Effective Dates 2017-2020)

  • Minimum incentive combined heat and power projects is a total of 3.5 cents per long term kWh.

    • Payment of the incentive could occur over a period of 1 to 5 years, and a portion of the incentive payment could be made in advance.

  • The Company will consider separate payments for feasibility studies.

  • Additional details regarding AEP Ohio’s CHP/WER incentive structure can be found on AEP Ohio’s Combined Heat and Power and Waste Energy Recovery Program home page.

Dayton Power & Light (Plan Effective Dates 2018-2020)

  • $0.08 per kWh generated

  • $100 per kW capacity

  • Rebates are based on the final cost of the project, and limited to 50% of the total design and construction project cost.

  • Rebates are capped at $500,000 per DP&L account. For CHP systems over 500 kW, contact DP&L to discuss potential incentive levels.

    • CHP rebates are funded through the Custom Rebate program and are available on a first-come first-served basis.

                   Lower Heat Value      Reimbursement Percent
                   80% or higher                100% of the calculated payment
                   70-80%                          90% of the calculated payment
                   60-70%                          80% of the calculated payment

  • CHP rebate applications must be submitted while in the design phase. CHP projects that are not pre-approved are ineligible to receive a rebate. Systems must meet or exceed a minimum system efficiency of 60% LHV to qualify.

  • Additional details regarding DP&L's incentive structure, including how to apply, can be found on its Combined Heat & Power technologies page.

Duke (Plan Effective Dates 2017-2019)

  • Floor for CHP incentive is a total of 3.5 cents per long term kWh.

    • Payable over a period of 1 to 5 years, a portion of which may be front-end loaded (subject to a clawback provision in the event of non-performance).

  • Eligible CHP is defined as, “a waste energy recovery or bottom-cycle system that does not require additional fuel above and beyond the baseline amount in order to produce useful electricity.” Additionally, “only the heat recovered from a top-cycle system that is used to offset electric-sourced consumption at a facility is considered eligible CHP” under Duke’s terms.

  • The Company will consider separate payments for feasibility studies.

  • A customer may not be opted out or exempted from the Company’s EE Rider, in order to receive a payment associated with the CHP Program.
    Note: Complete CHP program details, requirements, and incentive structure will be determined by Duke EE/PDR Collaborative members, but 3.5 cents per long term kWh is the floor throughout this portfolio filing.

FirstEnergy (Plan Effective Dates 2017-2019)

  • Minimum for CHP incentives is a total of 3.5 cents per kWh.

  • The Companies will set an incentive structure that is up to two times the minimum incentive structure supported in prior Commission rulings, or up to 5.0 cents per kWh.

    • Payment of the incentive could occur over a period of 1 to 5 years, at the Companies’ discretion.

  • CHP projects processed under the Companies’ Mercantile Customer Program: (i) will be rebated per the Commission’s direction on a case-by-case basis in response to applications filed on the Commission’s docket; and (ii) will not be subject to the $250,000 per project rebate cap set forth in the Mercantile Customer Program.

  • Additional details regarding FirstEnergy's incentive structure, including how to apply, can be found on its Combined Heat & Power page.

 

Analysis and Ohio Statutes Relating to Ohio’s CHP and WHP Policies     

Analysis of  SB 315 - SB 315 specified that CHP qualified as a compliance technology for the EERS and WHP qualified as a compliance technology for the RPS.

Analysis of SB 310 - SB 310 froze the RPS for two years, gutted the EERS, and allowed industrial customers to opt-out from paying for and implementing energy efficiency programs.

ORC 4928.64 - Statutes Relating to Ohio’s Renewable Portfolio Standard.

ORC 4928.66 - Statutes Relating to Ohio’s Energy Efficiency Standard.

ORC 4928.01 - Statutory Definitions Relevant to Ohio’s RPS and EERS, and to CHP and WHP Policies.

Statutes Enacted by SB 310

ORC 4928.662 - New Definition of Energy Efficiency Savings for the EERS.

Rules governing Opt Out provisions for industrials:

ORC 4928.6610

ORC 4928.6611

ORC 4928.6612

ORC 4928.6613

ORC 4928.6614

ORC 4928.6615

ORC 4928.6616

Net-Metering

Ohio law only allows CHP technologies powered by a microturbine with a capacity of two megawatts or less to qualify for net-metering. The OCHPC is dedicated to working with state legislators and officials to expand the types of CHP systems that can qualify for net metering.  

Ohio Net Metering Administrative Code

CHP in the Clean Power Plan

The Clean Power Plan (CPP) is the first ever limit on carbon dioxide pollution from the power sector. Finalized by the US EPA on August 3, 2015, the CPP requires each state to achieve carbon pollution reductions from in-state power plants. The state is free to determine the precise mix of actions to reach its reduction target, and can use a combination of renewable energy, energy efficiency or any other strategy that reduced carbon dioxide pollution, including increased deployment of CHP and WER projects. 

The Clean Power Plan represents a potential opportunity for increasing demand for  for CHP and WHP technologies in Ohio. However, the Supreme Court stayed the CPP in February 2016 pending judicial review of the plan on its merits. If the stay is lifted, or some other carbon reduction regulation is directed by the USEPA in the future, Ohio could adopt policies that incorporate CHP and WHP as a compliance strategy. In March 2017, the Trump Administration announced intent of an executive order that will likely weaken or dismantle the CPP. The OCHPC will continue to monitor the issue.

The following are some technical and policy resources concerning how CHP and WHP can best be utilized as a Clean Power Plan compliance strategy:

The US EPA’s main Clean Power Plan Page

Can energy-intensive manufacturers be winners under the Clean Power Plan? By Meegan Kelly, Senior Research Analyst, ACEEE Industry Program

Combined Heat and Power (CHP) as a Compliance Option under the Clean Power Plan: A Template and Policy Options for State Regulators A report by the David Gardiner and Associates, Institute for Industrial Productivity for the American Gas Association, American Chemistry Council, and the American Forest & Paper Association. Released July 28, 2015

Slides and Audio for the Industrial Energy Efficiency and the Clean Power Plan presentation by the American Council for an Energy-Efficiency Economy; Institute for Industrial Productivity; Regulatory Assistance Project; and David Gardiner and Associates

Projects

U.S. Department of Energy
The most up to date source for Ohio CHP projects is the U.S. Department of Energy’s Combined Heat & Power Installation Database. The site contains the location and certain details of all CHP projects in operation in the state of Ohio, including kW capacity, fuel class, type of facility, and more.

Public Utilities Commission of Ohio
The Public Utilities Commission of Ohio's Combined Heat & Power page contains information related to financing, incentives, links to archived workshops put on by PUCO, and other resources.