Ohio Utilities Launch Demand Response Program to Mitigate PJM Capacity Shortages

The Ohio Senate Energy Committee meeting on April 8, 2025, focused on addressing the anticipated capacity shortages faced by PJM, the regional transmission organization responsible for managing electricity supply. The committee discussed House Bill 15 (HB 15), which aims to tackle these shortages by incorporating demand response programs for residential and small commercial customers, similar to those already available for industrial users.

Capacity shortages are expected during peak electricity demand, particularly on hot summer days. The proposed demand response program would allow utilities to manage electricity usage by incentivizing customers to reduce their consumption during critical times. This is particularly relevant for residential customers, whose highest energy use typically occurs due to air conditioning.

The committee highlighted that HB 15 includes an amendment permitting utilities to run interruptible rate programs for industrial customers, compensating them for reducing their electricity use during peak demand. Advocates argue that residential and small commercial customers should have equal access to these demand response tools. By allowing utilities to adjust thermostats by 1 to 3 degrees during peak times, they can effectively manage demand and contribute to the overall stability of the electricity grid.

American Electric Power (AEP) is set to launch a new demand response program this month, which will enable residential customers to participate by allowing AEP to adjust their thermostats during peak usage periods. This initiative is part of AEP's Electric Security Plan (ESP) settlement, but concerns were raised about the future of such programs following the potential discontinuation of the ESP law.

The committee emphasized the urgency of implementing demand response programs, noting that they can yield significant results in a short timeframe compared to the lengthy process of constructing new power plants. It is estimated that these programs could generate approximately 400 megawatts of savings, equivalent to the output of a midsize power plant.

The discussions underscored the importance of legislative support to ensure the continuation of demand response initiatives, which are seen as a critical component in managing Ohio's electricity needs in the face of growing demand and potential shortages.