The Cost Squeeze

How Energy Efficiency Can Help Ohio Municipalities Weather Utility and Tax Changes

Across Ohio, local governments are feeling the pinch from two directions: rising utility costs and proposed changes to property tax funding. Together, these pressures are making it harder for cities, counties, and school districts to balance budgets without cutting services. The good news is that smart energy efficiency investments can help offset these challenges, often
without increasing taxes or fees.

Rising Utility Costs
Electric and natural gas rates have climbed sharply over the past two years. Many public facilities are seeing double-digit increases in utility bills compared to pre-pandemic levels. Generation and transmission charges — not just energy usage — are major drivers. Capacity costs in the PJM power market and infrastructure upgrades by utilities have added even more pressure. These higher costs directly hit general fund budgets. A 5%–10% increase in energy expenses across dozens of buildings can easily mean hundreds of thousands of dollars in unplanned costs for a mid-sized city or county.

Property Tax Uncertainty
At the same time, state policymakers are discussing ways to reduce or replace property taxes, especially for schools and local governments. While the goal is tax relief, the transition could create short-term instability in revenue streams that fund public services, maintenance, and capital improvements. With limited flexibility to raise other taxes or fees, local leaders may face
even tighter operating budgets just as utility costs peak.

The Case for Energy Efficiency
This is where energy efficiency becomes a budget protection strategy, not just a sustainability measure. Projects such as LED lighting upgrades, HVAC system modernization, and advanced building controls can cut utility bills by 25–40%. With today’s technology, these systems are non- proprietary, easier to maintain, and built around local serviceability — no long-term vendor lock-ins or expensive software licenses. Many municipalities across Ohio have already taken this path. Upgrading to high-efficiency lighting and replacing outdated control systems in facilities of every type has produced immediate savings that offset rising utility rates. Some have achieved project paybacks of less than five years, with energy savings continuing to free up funds year after year.

Financial Tools and Partnerships
Energy projects can often be budget-neutral through energy performance contracts or financing tied to guaranteed savings. Partnering with an experienced energy services provider can help local governments navigate these opportunities, calculate realistic savings, and structure projects that pay for themselves.

The Bottom Line
While utility rates and tax structures may be outside local control, energy use is not. By cutting consumption, cities and counties can reduce exposure to rising costs and revenue uncertainty. Energy efficiency turns a problem — rising expenses — into a solution: long-term budget stability and better stewardship of public resources.

Submitted by:
Doug Trimbach
Vice President-Lighting
Energy Optimizers, USA
[email protected]
937-877-1919