Energywire: Ohio Senate Looks for Compromise in Energy Stalemate

June 20, 2018
Ohio Senate looks for compromise in energy stalemate 
By Jeffrey Tomich

As its Great Lakes neighbors Illinois and Michigan firm up plans to add thousands of megawatts of new wind and solar energy in the coming years, a stalemate over clean energy policy drags on in the Buckeye State.

The Ohio Senate Energy and Natural Resources Committee will try to move the debate forward this afternoon as it holds another hearing on a substitute version of a bill that passed the House mostly along party lines in March 2017.

Unlike H.B. 114, which would have ended renewable energy mandates, the substitute bill lowers renewable energy targets. It would also make other key changes, including easing wind turbine setback requirements put in place in 2014.

The proposal to relax wind setback requirements has support from legislators in both parties, as well as wind developers like EDP Renewables and Apex Clean Energy.

Some clean energy advocates, too, have signaled that they’re willing to live with lower clean energy targets to help jump-start wind development and provide certainty in the market.

But sharp divisions remain on certain provisions in the substitute bill, especially around energy efficiency, and it’s less than clear whether the bill will appear before the Legislature before it adjourns next Wednesday.

Environmental and consumer groups will testify in opposition to the H.B. 114 substitute bill.

Among the key sticking points for environmental advocates is an opt-out provision for so-called mercantile customers, or commercial and industrial customers that use at least 700,000 kilowatt-hours of energy a year. Another provision would allow utilities to carry over energy savings from one year to the next for the purpose of earning financial incentives.

“If we can fix some of the critical elements of the bill, it will be a compromise we can live with,” said Robert Kelter, an attorney for the Chicago-based Environmental Policy & Law Center, a Midwestern advocacy group.

“We’re willing to make trade-offs in return for certainty,” he said. “But those trade-offs can’t include killing energy efficiency.”

Currently, only the largest industrial energy users are allowed to opt out of utility efficiency programs — a policy compromise agreed to during an earlier debate over Ohio’s clean energy standards in 2013.

Trish Demeter, vice president for energy policy at the Ohio Environmental Council Action Fund, said the provision predictably led to an outcry from business customers that narrowly missed qualifying for the opt-out.

“Opt-outs are an inherently unfair policy,” Demeter said. “Where do you draw the line?”

 

Opt-Out Option

Under the proposal in the Senate substitute bill, a wide range of commercial customers would be allowed to opt out of paying into efficiency and peak demand reduction programs, including smaller businesses that still rely on utilities to help them identify energy savings opportunities, she said.

Meanwhile, the Ohio Chamber of Commerce singled out the efficiency opt-out provision as a reason it supports the bill. The business group also favors changes to the wind setback rule.

“Energy efficiency helps businesses compete best when free enterprise drives investment decisions rather than government mandates,” Zack Frymier, the chamber’s director of energy and environmental policy, said last month in testimony.

The Senate substitute would lower Ohio’s renewable energy standard to 8.5 percent of sales from 12.5 percent by 2027. The bill would similarly reduce a 0.5 percent carve-out for solar energy.

The substitute version of H.B. 114 would lower energy savings benchmarks of 2 percent starting in 2021 to 1.5 percent and reduce cumulative savings to 17.2 percent from the 22.2 percent in the existing law.

Ohio’s renewable and efficiency standards have been a constant source of debate since they were adopted a decade ago.

S.B. 310 in 2014, a measure that froze the standards for two years, was approved by the Legislature and signed by Gov. John Kasich (R). But the governor vetoed a subsequent bill, H.B. 554, in 2016 that would have extended the freeze.

A Kasich spokesperson didn’t respond to questions seeking the governor’s stance on the Senate substitute bill.

Clean energy advocates, meanwhile, say Ohio has other policies in place to support renewable energy development, including net metering for rooftop solar and a competitive energy market that lets businesses enter power purchase agreements for wind and solar energy.

And utilities so far are having no trouble meeting or exceeding renewable targets under the existing law.

Meanwhile, both of Michigan’s large investor-owned utilities this month committed to getting at least 25 percent of their energy from renewable sources by 2030. And one of those utilities, Consumers Energy, filed plans with Michigan regulators last week to far exceed that goal and get 37 percent of its energy from renewables by the end of next decade (Energywire, June 14).

Said Demeter: “It’s just kind of silly that they’re proposing to roll it back. It’s just kind of bad optics.”

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