Non-Energy Benefits Estimating the Economic Benefits of the Ohio Electric Partnership Program

1. Non-Energy BenefitsEstimating theEconomic Benefits of the Ohio Electric Partnership Program 2006 ACI Home Performance Conference May 25, 2006 Jackie Berger

2. Ohio Electric Partnership Program • Electric usage reduction program managed by Ohio Office of Energy Efficiency • High use electric PIPP customers are targeted for service delivery • Measures include refrigerators, freezers, light bulbs, aerators, showerheads, water heater wraps

3. Macroeconomic Effects

4. Economic Multiplier Example: • Program expenditures (direct effects): $10 million • Indirect effects: $500,000 • Induced effects: $1 million • Multiplier = 1.15

5. Ohio Economic Benefits • Expenditure of State funds on program substitutes for expenditure of State funds on energy assistance. • Ratepayers have reduced electric costs if program benefit/cost ratio is > 1.

6. Expenditure of State Funds • If Ohio was not spending State funds on the EPP, these funds would be used to subsidize electric bills. • Expenditures on energy conservation have a greater impact on the economy than expenditures on electricity. • A larger fraction of expenditures on energy conservation are spent inside the state. • Energy conservation work is more labor intensive than electricity production.

7. Expenditure of State Funds Economic benefit from EPP expenditures = EPP expenditures in Ohio ( ) conservation multiplier electric multiplier – * – EPP expenditures outside Ohio electric multiplier *

8. Reduction of Ratepayer Subsidy • If the program has a benefit/cost ratio of > 1, there will be an additional reduction in the amount spent on electricity. • This reduction goes to the Ohio ratepayers who had subsidized the electric use of PIPP participants. • Ohio ratepayers have more disposable income to spend on consumer goods that have higher multipliers for the Ohio economy than electricity multipliers.

9. Reduction of Ratepayer Subsidy Economic benefit from EPP net benefits = ( consumer goods multiplier ) net benefits spent electric multiplier – * – electric multiplier net benefits saved *

10. Summary of Economic Benefits

11. EPP Expenditures

12. Multipliers

13. Impact on Output fromEPP Expenditures

14. Impact on Output fromEPP Expenditures

15. Impact on Output fromEPP Expenditures

16. Net Energy Savings

17. Impact on Output from EPP Net Benefit

18. Impact on Employment from EPP Expenditures

19. Impact on Employment from EPP Expenditures

20. Impact on Employment from EPP Expenditures

21. Impact on Employmentfrom EPP Net Benefit

22. Summary

23. Contact Information Jackie Berger jackie-berger@appriseinc.org Director of Program Evaluation APPRISE Incorporated 403 Wall Street Princeton, NJ 08540 609-252-8009 www.appriseinc.org