Advanced Energy Perspectives

STATES: In Ohio, Battle Royale Over Efficiency and Renewable Energy Rages On

Posted by Tom Plant

May 15, 2014 1:40:00 PM


iStock_000015216891SmallOhio put energy efficiency and renewable energy standards in place in 2008. The standards have been a great success – saving money, creating jobs, diversifying resources.


But no good deed goes unpunished. Some of the utilities have been slow in implementing energy efficiency programs and decided to exercise their influence in the Ohio General Assembly rather than implement efficiency measures that would save money for their customers.


In 2013, a proposal to gut the standards from the Senate Public Utilities Committee Chairman Bill Seitz was rejected for lack of support after months of exhaustive hearings, studies and reports. 


Why? Because the repeal of the standards was estimated to cost consumers $3.97 billion, put hundreds of advanced energy companies out of business and lay off thousands of workers over the next decade.


This year, Senate leadership decided to shortcut the process: If you want to pass legislation, just introduce it and pass it in one day. So, that’s what the Senate did. In an historic move, they held a committee vote on the bill at 9:30pm last Wednesday, May 7, then moved it to the floor and debated into the night, with a final vote at 1:06am on Thursday.


The bill places a two-year “pause” on the standards, while energy efficiency investment stalls and sovel-ready projects remain in jeopardy. This, in itself, was an accommodation, as Gov. John Kasich objected to the “freeze” in the original draft that would have required legislative action to thaw. However, now that there has been an opportunity to review the legislation passed by the Ohio Senate – it’s clear that the bill is worse than anything previously proposed.


Simple changes to Ohio’s law would mean devastating effects on Ohio’s advanced energy economy.  On the renewable side, expanding the definition of “qualified renewable energy” to include existing hydro generation that delivers power anywhere in the 13-state PJM RTO – including the province of Manitoba, with Manitoba Hydro one of its largest utilities.  Canadian outfits will realize the economic benefits of Ohio’s electricity needs rather than Ohio companies. 


There’s much more, but categorizing this measure as a “freeze” or a “timeout” is misleading at best. The energy efficiency and renewable energy standards would be eliminated through language that makes them irrelevant – then that irrelevant standard is frozen for two years. As a result, the legislation would eliminate energy efficiency and renewable energy investment in Ohio, draining the economy of the businesses, jobs and energy savings associated with those objectives.


Not everyone is fooled. Companies from Honeywell to Honda have come out in opposition to the legislation, known as SB 310. AEE’s state partner, Ohio Advanced Energy Economy, has led the charge against it, with the Ohio Manufacturers Association a staunch ally. AEE has supported the anti-SB 310 effort with an online advertising campaign. Newspapers have editorialized against it. Yet, the bill moves on and could reach Gov. Kasich’s desk before the end of May.


Update: SB 310 has run into some resistance in the House. After a fractious Republican caucus, the House Speaker declared there were not enough votes to pass the bill. (Two Senate proponents made an unusual visit to the House caucus to make the case for the bill, with one backpedaling on opening the door to Canadian hydro, saying that provision was a mistake and would be changed.) This has allowed for a new compromise offered by consumer, environmental, and industry groups (including Ohio Advanced Energy Economy) to emerge. 


What Gov. Kasich will do is yet to be determined. Shortly after he came into office, Kasich hosted an energy summit in which he extolled the benefits of renewable energy. His State Energy Plan states, “Promoting efficiency and maximizing our energy resources will help offset rising energy prices.” He has advocated opening markets for more advanced energy technologies.  Here’s an opportunity to put a pen to those statements.


The economic recovery that has happened on his watch is in peril if investment leaves the state as a result of legislation, passed under cover of night, that places ideology above common sense.


Senate Bill 310 is a direct assault on the advanced energy industry and Ohio consumers and should meet with the Governor’s veto.


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Topics: State Policy Update


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