Advanced Energy Perspectives

Gov. Kasich’s Veto Creates $10B Market Opportunity, But Ohio’s Energy Future is Far from Settled

Posted by Ray Fakhoury and Ted Ford

Jan 12, 2017 5:51:01 PM

    

ohio-state-capitol-816248-edited-2.jpg

Ohio gained national attention in the closing days of lame duck session as the legislature and Gov. John Kasich squared off over the future of state’s energy standards. Despite the Governor’s clear signal that he would veto any extension of the freeze instituted two years ago, the Ohio General Assembly passed HB554, which would have extended the freeze on the state’s energy standards by turning the benchmark requirements into voluntary goals for the state’s utilities through 2019. Despite the efforts of legislative leaders, who sought to pass the bill with veto-proof majorities, the vote fell short of reaching the threshold needed for an override. That set the stage for some end-of-session drama.

AEE and Ohio AEE were joined by other organizations and more than 70 businesses to testify in opposition to the bill. Thanks to this strong opposition to the bill, a number of Republican legislators sided with Gov. Kasich and voted against extending the freeze, depriving the bill of veto-proof majorities. Sticking to his principles, Gov. Kasich vetoed the bill on the final day it could be on his desk, and just days before the December 31 expiration of the freeze on the RPS and EERS. With his veto, Gov. Kasich unleashed an advanced energy market opportunity of more than $10 billion – and sent a clear signal to the nation and to our industry that he is ready to fight for sensible energy policy that attracts high-tech companies and saves consumers money.

“Gov. Kasich’s decision will help ensure that Ohio can leverage increasingly competitive, locally manufactured utility-scale solar projects that customers large and small demand in greater numbers every year,” said Mike Koralewski, Senior Vice President of Global Manufacturing at First Solar.

While many of the original RPS and EERS benchmarks have been reinstated, changes previously made (by SB310 in 2014) are unchanged. These include elimination of the in-state renewable energy purchasing provision, which required 50% of renewables purchased by utilities to come from Ohio generation, and watered-down provisions regarding what counts towards energy efficiency. Finally, the veto of HB 554 does nothing to address the onerous wind setback requirements adopted separately in 2014.

Nor has the veto secured Ohio’s advanced energy future. Energy will once again be a top priority for the Governor and Ohio lawmakers in 2017.

For starters, leaders in the Republican-controlled House have signaled their intent to resurrect HB 554 in the new session now underway and pass it once more, this time with a veto-proof majority. The primary sponsor, former State Sen. Bill Seitz (now back in the House of Representatives due to term limits), has even threatened to seek a full repeal of the RPS and EERS in 2017. Senate leaders, however, have indicated that they would like to take a more deliberative approach, in hopes of establishing a comprehensive, long-term energy strategy for the state, rather than just pulling the plug on successful energy efficiency and renewable energy standards.

This session, the legislature will be looking to address not only the EERS and RPS but also wind setback requirements, as well as deal with calls from First Energy and AEP Ohio for re-regulation of some of their generating assets, possibly including future renewable energy projects. Given that so many of the utilities’ former assets are now owned and operated by independent power producers who compete with them, re-regulation promises to be a major battle.

After more than two years of debate on energy, the Governor’s veto of HB 554 could be a turning point for Ohio, but nothing is certain. AEE will continue to advocate strongly for competitive markets and meaningful, enforceable standards to keep Ohio on the path to an advanced energy future.

Keep up to date on Ohio policy and beyond by subscribing below to AEE Weekly:

Subscribe to AEE Weekly

Topics: State Policy Update

About

Advanced Energy Perspectives is AEE's blog presenting news, analysis, and commentary on creating an advanced energy economy. Join the conversation!

Subscribe to Email Updates

Recent Posts