Energy efficiency has proven itself to be the least cost source of energy. Additionally, rate-payer funded efficiency programs have had a measurable effect on energy efficiency implementation rates reducing overall costs and load on the grid (Worley et al. 2017). For many large users, however, “opting-out” is an enticing option now available in about thirteen states, including Ohio. By opting-out, a large customer can stop participating and paying riders into a utility’s efficiency programs. The dynamics of opting-out can be misunderstood by both customers and efficiency programs. Furthermore, the opt-out can be confused with other similar options such as the self-direct mercantile mechanism. It is important for energy efficiency stakeholders to better understand what an opt-out is, how it works, and how opt-out decisions are made by customers.

This paper describes the state of opting-out in Ohio and explores how it is viewed by large utility customers. Several case studies from Ohio are presented for large utility customers, ranging from commercial buildings to industrial customers. In each case study we dissect the exact question the customer is faced with: “Should I opt-out?” We examine why some of the case study customers opt-out and why some do not. We also explain alternate drivers and incentives large customers have used to implement efficiency, outside of utility efficiency programs. A primary goal of this paper is to facilitate thought and discussion on why large customers choose to opt-out.