To amend section 4909.192 and to enact section 4928.106 of the Revised Code to authorize voluntary demand response programs for residential and small commercial customers.
Summary
HB427 would authorize electric distribution utilities in Ohio to create voluntary demand response programs for residential and small commercial customers. These programs are designed to reduce electricity use during peak demand periods, such as by adjusting air conditioning or water heater settings, while allowing participating customers to override individual events. The bill also requires Public Utilities Commission of Ohio approval before a utility may offer such a program, and it directs the commission to evaluate whether each program is cost-effective for customers.
The bill further amends existing law governing rate cases and utility programs by adding residential and small commercial demand reduction programs to the list of measures the commission may approve. It also allows utilities and competitive retail electric service providers to bid demand response reductions into the regional capacity market, with revenue used to offset program costs. The commission would be required to review the success of these programs within three years and recommend any changes to the legislature, including whether bidding into the capacity market should continue or be modified.
Impact
HB427 would create a new statutory section, R.C. 4928.106, and amend R.C. 4909.192 to expressly permit demand response programs for residential and small commercial customers in utility rate proceedings. It would give electric distribution utilities authority to enroll customers voluntarily, compensate participants, and manage peak load reductions, subject to PUCO approval and cost-effectiveness review. The bill would also affect competitive retail electric service providers by allowing them to offer access to these programs and to participate in capacity-market bidding tied to the resulting demand reductions.
Sentiment
Based on the bill text and available context, the measure appears generally pro-efficiency and pro-consumer, with a focus on lowering peak demand, improving grid reliability, and potentially reducing customer bills. Because there are no recorded committee transcripts or votes in the provided material, there is no documented opposition or support from lawmakers to gauge broader sentiment. The bill’s structure suggests it is intended as a utility modernization and cost-management proposal rather than a controversial policy change.
Contention
The main policy questions raised by the bill are whether the programs will truly be cost-effective for customers, how much control utilities should have over customer appliances during peak events, and whether customers may be discouraged from future participation if they override a utility action. Another possible point of contention is the role of competitive retail electric service providers and whether they should be able to market or bid these demand reductions into the capacity market. The bill also leaves room for debate over the commission’s discretion in approving performance incentives for utilities and in determining the long-term value of these programs.