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CHAGRIN FALLS, Ohio — In an age when digital innovation drives progress, data centers represent the backbone of modern technology fueling our interconnected world. Ohio, a pivotal hub for these critical centers poised to secure massive investments through leading-edge chip factories, needs to be energy-conscious now more than ever.

Data centers — power-intensive entities that house all the components that make our digital world possible — require a large supply of electricity to support their operations and are being established throughout Ohio due to the state’s competitive electric rates and favorable business climate. However, the traditional energy model, which treats electricity consumption as a static constant, is evolving.

Electricity must be produced and consumed in synchronicity. There is currently no cost-effective way to store it in large quantities. This means distribution, transmission, and generation infrastructure must be overbuilt to satisfy a few momentary periods of peak electric demand or risk grid failure.

Demand-side management flips the script by allowing data centers – and other consumers – to dynamically adjust their power consumption in response to grid conditions, pricing fluctuations, and peak demand periods. This approach enables these customers to reduce electricity usage during periods of high prices and grid congestion, thereby aiding the grid in avoiding overloads. Given Ohio’s competitive energy market and the availability of the price signals within rates and regulations, these large data centers can lead the way in pioneering optimized modern electricity usage.

Ohio’s competitive energy landscape offers several advantages, which encourage large power consumers to adjust their electricity consumption during peak demand periods. These advantages include: (1) access to hourly spot markets, (2) pricing for capacity and transmission based on power consumption during times of grid peaks, and (3) different local and regional demand response programs.

Demand-side management proves particularly valuable when surging power consumption, such as during heat waves and winter storms, strains the electric grid. In extreme weather conditions, the loss of power can mean the loss of life.

For example, on Dec. 23 and Dec. 24 last year, Winter Storm Elliott rapidly plunged Ohio and many surrounding states into sub-zero temperatures. Surging electric demand and generation failures produced emergency grid conditions that led many of Ohio’s data centers and largest energy users to respond to available price signals or interruption notices and come offline. Absent their actions, the outcome invariably would have been disastrous. And while we survived last winter, many are rightly concerned about what future winters will hold.

Embracing demand-side management also does not just mean reduced consumption when it is most needed, but critically, reduced costs. Ohio’s data centers are no strangers to the substantial expenses associated with electricity consumption. For many, it is their largest operating cost by a wide margin, and as a result, they are highly sensitive to regional pricing when selecting a place to locate.

To capitalize on the full potential of competitive retail energy, policymakers, utilities, and stakeholders must collaborate to design and implement effective demand-side management opportunities, foster greater competition in the market, and increase awareness of the options available.

The latest reporting on Ohio’s competitive market states that “supplier access to customer data could help with designing innovative retail products that enable customer usage timing and control.” A lack of customer data limits the market’s ability to strengthen demand-side management. As such, strengthening our market and prioritizing transparency can pave the way for more cost-effective and innovative energy solutions.

The path forward is clear: Ohio’s data centers and other large energy consumers have an extraordinary opportunity to revolutionize their energy consumption patterns and grid stability through demand-side management. By responding to available price signals, these facilities can unlock unprecedented cost savings and enhance grid reliability. The result? Data centers that not only power the digital age, but also stand as beacons of efficiency, innovation, and progress in the heart of Ohio.

Local electric customers and advocates testified at a hearing held by House members of the Legislature’s Telecommunications, Utilities, and Energy Committee today, calling for a reformed and improved competitive retail electric market in Massachusetts, not a return to a utility monopoly that reduces consumer choice.

“I have been a proud consumer in the choice market for electricity in the town of Brookline for over 10 years. Recently, I bought an EV and found a supplier willing to give me a flat monthly bill no matter how much energy I consumed. It was an amazing value,” said Young Kim of Brookline. “I wanted to give the voice of the customer from a positive experience. I don’t think we should close the residential market. With the rise of EVs, heat pumps, and solar panels, I want every option on the table.”

Right now, nearly half a million Massachusetts consumers choose a competitive electric supplier rather than their default utility provider. Some shop for 100% renewable energy, some choose products that provide long-term predictability to their utility bills to protect from spikes like we saw this winter, and some seek out the lowest price available. New data released this week shows that Massachusetts residents could save as much as $42.6 million this month by enrolling with a competitive supplier.

“Customers choose competitive electric suppliers for many reasons: lower rates, predictable bills, or help meeting their household’s environmental goals. The stakes are high: hundreds of millions of dollars in consumer savings, and our ability to achieve our climate goals while maintaining reliability and affordability,” said Christopher Ercoli, President and CEO of the Retail Energy Advancement League. “Massachusetts cannot just throw up its hands and say customers aren’t able or smart enough to play an active role in their energy use, purchasing and management. If the retail energy market were to close, ratepayers would be beholden to utility-determined market rates. Options and freedom to choose is the best consumer protection possible.”

Under one proposal being heard by the Committee on Thursday, consumers would lose that freedom of choice at the end of this year. H.3196 would shut down the residential competitive retail electric market in Massachusetts, denying customers the ability to shop for an electric supplier that aligns with their economic and environmental goals.

Another proposal being heard by the Committee contains numerous reforms to establish greater regulatory oversight and consumer protections in the market, while preserving its benefits for local electric customers. H.3155 includes the ability to switch suppliers mid-billing cycle within three business days, parameters around customers on energy assistance programs, and requiring auto-renewal notices. It also includes requirements to help address bad actors in the market, such as requiring training and certification from suppliers, particularly around marketing practices, publishing complaints, and increasing fees for misrepresentation of the utility or town. The legislation would increase industry licensing fees to help fund these oversight and enforcement initiatives.

“Changes are needed to better protect customers, and failure to do so risks losing the opportunity to capture the benefits of retail choice for all consumers,” said Paul Hibbard, a former chairman of the Massachusetts Department of Public Utilities who recently authored a report that looks comprehensively at how different states address competitive electric markets. “Some states and advocates appear to lean towards doing away with retail choice due to a perception of low benefits and negative experiences with marketing and supply to residential customers — experiences that by and large can be cured through corrective program design, regulatory action, and education. But doing away with retail choice – rather than improving it – would be a mistake.”

At the hearing, experts and advocates spoke about the need to ensure that competitive electric markets can operate as a stronger tool for consumers to meet their individual goals while supporting the energy transition and our achievement of decarbonization goals.

“I care about electricity competition because I care greatly about decarbonization. Decarbonization is rightly a major goal of Massachusetts and retail electricity competition can be a big way to decarbonize affordably,” said John Hanger of Shrewsbury, a former Public Advocate for utility consumers in Philadelphia, former Commissioner of the Pennsylvania Public Utility Commission, and former Secretary of the Pennsylvania Department of Environmental Protection. “When discussing green power products, let’s also remember that utility default supply comes overwhelmingly from burning gas, which is the top cause of CO2 pollution in Massachusetts and on the US electricity grid.  Unfortunately, recent problems with offshore wind procurement underline the challenge of cleaning up default supply. To accelerate affordable decarbonization, it is time to unleash and enable the retail customer to cut CO2 pollution.”

Washington D.C., September 15, 2023 — The Retail Energy Advancement League (REAL), has released a new report showcasing major trends in the U.S. retail energy industry.

The report, “2022 Retail Electricity and Natural Gas Market Annual Report,” authored by Texas-based consulting group, Intelometry, conducts an assessment of select U.S. retail electric and natural gas markets. The study provides a general breakdown by state of the number of customers on competitive supply, analyzes whether savings opportunities for residential customers existed in 2022 across competitive retail markets, and forecast utilities tariff prices to assess whether the high residential electric and gas prices thus far seen in 2022 and 2023 are expected to abate.

The study discovered that if all residential customers had capitalized on available competitive supply savings opportunities in 2022, the total net savings throughout the year would have surpassed $2.0 billion. Furthermore, it revealed that value-added services offered by retail suppliers provided hundreds of dollars in additional value to individual residential customers over the year, in addition to the social and environmental benefits provided by retailers’ renewable energy plans.

Crucially, the study also anticipates that utility tariff rates will likely remain at levels where residential customers can achieve savings through competitive supply. This view is further supported by the fact that the market has seen competitive savings opportunities in every month of 2023 so far.

“Looking ahead, as we see retail savings opportunities persist in 2023, we believe competition is essential to consumers receiving affordable, reliable, and sustainable energy supply,” said Chris Ercoli, President and CEO of REAL. “Beyond the bottom line, we celebrate the additional value that retail suppliers bring to such a rapidly evolving energy landscape, such as renewable energy plans, demand-response incentives, and unique services that meet their needs.”