Editor’s note: On May 28, the Ohio legislature approved S.B. 310, a bill effectively freezing the state’s 25% by 2025 Alternative Energy Portfolio Standard (AEPS). At press time, the bill now awaits the signature of Gov. John Kasich, R-Ohio, who has 10 days to sign or veto the bill. Kasich’s signature would make Ohio the first state to roll back its renewable energy mandate.
Ohio is the U.S. leader in wind-related manufacturing, bringing millions of private-sector investment dollars into the state, yet utility monopolies have mounted an aggressive campaign to kill renewable energy and efficiency efforts. First Energy, an Akron, Ohio-based power company, began its attacks in late 2012, and although the early efforts ran into controversy, the giant utility came back, having obtained the support of the state Senate president for a two year “freeze” to the state clean energy standards.
According to the American Wind Energy Association (AWEA), Ohio is home to 431 MW of utility-scale wind projects, representing $775 million of private-sector investment. More than 1.1 additional gigawatts are shovel ready, and the National Renewable Energy Laboratory estimates the Buckeye State has the potential to install 54.9 GW of onshore wind power capacity. Furthermore, Ohio is the No. 1 manufacturer in the country of component parts for wind machines, with some 62 companies creating thousands of jobs within the state.
“The standards were working,” says Dayna Baird Payne, AWEA’s Ohio lobbyist. “As planned, they are driving investment – more than $1 billion in private capital – into renewable energy projects that diversify our energy resources and save money.”
Ironically, the utilities themselves admit the standards are saving money. In filings to the Public Utilities Commission of Ohio, the power companies admit efficiency programs alone have netted Ohio consumers more than $1 billion in savings to date and will result in more than $4.1 billion in savings over the programs’ lifetime.
American Energy Power (AEP) said its proposed energy efficiency plan for 2015-2019 will save its customers “approximately $1.5 billion” and create over 4,000 new jobs. The giant utility argued energy efficiency “is an important resource for the state of Ohio, AEP Ohio and its customers, continuing to be important as future fuel and commodity prices remain volatile and environmental regulations become more stringent.”
Even First Energy, the leading proponent of S.B.310, admitted that for every dollar spent on energy efficiency programs, its customers save over $2.
The power coming from wind projects, moreover, is far cheaper than that from any generation alternative, with one developer recently signing a long-term agreement to sell 50 MW of renewable energy at about half the price of power from new coal or natural-gas generators.
Ohio State University (OSU) is purchasing one-quarter of its electricity needs from wind energy and, as a result, saving more than $1 million annually for the next 20 years.
It is also ironic that the state’s utilities are on target to achieve the existing standards, contradicting their claims about the lack of available efficiency and renewable energy opportunities. According to Baird Payne, there are enough renewable projects already existing in order to meet the standards into the year 2016. And considering the growing renewable energy trend over the last three years, the existing targets clearly are achievable.
The standards enjoy popular support. According to a recent survey conducted by polling firm FM3, Ohioans overwhelmingly favor wind farms and solar arrays over coal-fired power plants, and they support utilities helping customers use less electricity. The random telephone survey of 600 Ohio voters found that 86% of respondents want mandated utility energy efficiency programs, and two-thirds say they would more likely support legislative candidates this fall who promote renewable energy over those who encourage the state’s utilities to advance traditional coal-fired and nuclear power plants.
The bill has become more anti-clean energy as it moved through the House and Senate, and its fate now depends on Kasich and a broad coalition that is urging his veto.
However, early in his term, he organized a high-profile energy summit and advanced legislation that built on the state’s incentives for renewable energy and efficiency. He paid particular attention to how cogeneration technologies – combined heat and power, as well as waste energy recovery – can improve the state’s economy and cut pollution. At the time, Kasich declared, “The pursuit of clean alternative, renewable and advanced energy sources, and their supportive technologies, is the pursuit of the future, and our commitment to them shouldn’t waiver despite the fact that their costs aren’t yet where we want them to be. … Increasing our energy efficiency by helping the state, local governments, residences and businesses get more out of the energy they use – including fostering more co-gen efforts – creates more of the cleanest energy of all: the energy that isn’t used.”
Yet less than two years later, First Energy and the Ohio General Assembly have destroyed one of the governor’s first major initiatives.
The state, at least rhetorically, takes great pride in its clean energy leadership. The website JobsOhio, the governor’s privatized economic development agent, boasts, “Ohio ranks No. 1 in the nation for renewable and advanced energy, bringing in more renewable energy facilities than any other state.” It further declares, “Ohio is committed to leading the world to energy independence with advanced energy innovation, groundbreaking manufacturing processes and low-cost deployment of these assets to fulfill current and future demand for alternative energy solutions.”
Many of the state’s leading companies – including Honda, Johnson Controls, Schneider Electric, Whirlpool, United Technologies and Owens Corning – embrace those sentiments and have spoken out against S.B.310.
Employing more than 30,000 workers, the firms stated, “We believe that policies promoting efficiency should continue to be a part of Ohio’s plan to attract economic investment and encourage growth.”
The bill, they said, “would negatively impact programs local utilities run to trim energy consumption and help stabilize the state’s electricity grid and prices.” The clean energy standards, the companies argued, “provide business prospects and jobs for contractors across the Buckeye State,” and such policies are “a low-cost strategy for keeping utility costs under control and providing protection against price volatility, which enhances competitiveness for our companies.”
Even the Ohio Manufacturers’ Association supports the clean energy standards, arguing that the falling prices of wind energy and solar collectors, along with energy efficiency, make clean power the most cost-effective way to meet the state’s energy needs.
S.B.310’s impact on the wind industry would be profound and damaging. Hull, a project development firm, said the legislation would put at risk its planned $5 million investment in renewable energy. In fact, eight projects – totaling 1.1 GW – are shovel ready, having been certified by the Ohio Power Siting Board. Those projects represent approximately $2.2 billion in capital investment, and they would provide nearly $10 million in local government taxes annually and approximately $8 million in annual landowner lease payments. The construction of those certified projects would employ thousands of workers and bring tens of millions of dollars into the Ohio economy.
However, if First Energy is successful, says Baird Payne, those projects and benefits will be abandoned.
According to calculations by professors at OSU, First Energy’s scuttling of the clean energy laws would force the average Ohio family to pay over $500 more on their electricity charges per year, and the average business would pay an additional $3,000 annually. An OSU report also found the existing clean energy laws have helped 400 companies grow and employ 25,000 Ohioans.
The battle in the Buckeye State could set an alarming precedent for the wind and other clean energy industries.
“The Ohio AEPS and other state policies like it have been instrumental in attracting renewable energy companies to set up factories and build new energy generation facilities,” says Christy Omohundro, AWEA’s director of eastern state policy. “With all the positive economic and environmental benefits of renewable energy, it seems to be in the best interest of Ohioans to keep the AEPS in place and attract even more business and development.”
Ohio’s existing clean energy standards support over 25,000 jobs, saved consumers more than $1 billion on electricity bills and drastically slashed the Buckeye State’s toxic air pollutants. S.B.310 would prevent Ohioans from continuing to enjoy the many benefits of new, clean energy technologies, reasonable electricity rates and a healthy environment. w
Battleground Ohio: State Confronts RPS Freeze
By Dick Munson
A hotly contested legislative bill threatens the state’s clean energy future.
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