Dive Brief:

• Consumer advocates in Ohio are wary of energy efficiency proposals floated by FirstEnergy, saying they allow the utility to profit from work done by other entities and are in many cases not cost-effective, Midwest Energy News reports. 
• In April, FirstEnergy proposed a "menu of energy efficiency programs" that included a focus on low-income households, appliance exchange offers, home energy audits and direct load control.
• The utility largely halted efficiency efforts after the state froze mandates in 2014; Midwest Energy News reported the slate of proposals now being considered could cost almost $450 million, by some estimates.

Dive Insight:

FirstEnergy in April filed a plan with the Public Utilities Commission of Ohio to operate efficiency and peak demand reduction programs from 2017 through 2019, replacing efforts which were largely ended two years ago. In 2014, Gov. John Kasich signed legislation allowing the utility to end conservation programs.

FirstEnergy said its plan, a result of collaboration with environmental groups and consumer advocates, is expected to save 800,000 MWh each year and "exceeds the annual reduction targets of the energy efficiency mandates that are currently suspended in Ohio." 

The programs include incentives for energy-efficient home construction or major rehabilitation of existing low-income housing, lighting and appliance replacement; appliance replacement, and a direct load control program.

But according to Midwest Energy News, critics say the programs are not cost-effective and the utility stands to turn a profit from projects it does not administer.

A utility "should only receive shared savings profits for programs that it develops and administers for the benefit of customers," according to Richard Spellman, an engineer testifying for the Office of the Ohio Consumers’ Counsel. He said customers are only saving 89 cents for every dollar spent in the programs, and suggested cutting all but the low-income programs from FirstEnergy's proposals.

The utility would also be allowed, under its proposal, to profit from projects administered by others, including municipalities administering Property Assessed Clean Energy programs. The overall costs of FirstEnergy's proposals would be $322 million across the three years, according to the Consumers' Counsel, plus profits of $117 million for the utility.

Disagreement between the Ohio consumer advocate and FirstEnergy is becoming commonplace. Throughout this year, the OCC opposed efforts from the utility to win income guarantees for a group of aging power plants, as well as the subsequent $9 billion grid modernization plan filed by FirstEnergy after those subsidies were blocked by FERC.