Hearings begin Wednesday before the House Public Utilities Committee on a proposal to require the state’s utilities to begin generating electricity with renewable technologies as early as next year.
The proposal is the creation of the House Republican leadership, which began working in December to “green up” Gov. Ted Strickland’s comprehensive energy bill.
The governor’s bill included provisions for renewable and “advanced energy” power plants but gave the utilities until 2025 to meet the requirements. Strickland’s bill mostly focused on preventing the utilities from escaping regulated rates – something they can do at the end of this year.
House Speaker Jon Husted and Rep. Jim McGregor, a Republican from Gahanna, near Columbus, unveiled the new super green bill last week. It does not mention utility rate regulation because, Husted says, when approved, it will be inserted back into Strickland’s bill.
The McGregor bill lays out annual benchmarks the utilities would have to meet generating a portion of their power from renewables. It also includes broad mandates requiring utilities to develop programs to help consumers buy less electricity – and to prove it by selling them less power every year for the next 17 years.
Though the McGregor bill has met unbridled enthusiasm from environmentalists and renewable energy advocates, others are asking who will pay for the leap into green.
Skeptics say wind turbines and solar arrays are expensive and likely to become more costly as states mandate their use, especially in the next couple of years because production is limited and demand is already high because of mandates enacted by more than a dozen other states.
To control the effect on rates, the Senate inserted a provision into Strickland’s bill that said if a utility’s overall rates increased by 3 percent by 2025, specifically because of the new technologies, no new turbines, solar arrays or high-tech, clean coal plants would have to be built.
But Husted and McGregor deleted that cap, accepting the reasoning of the renewable advocates that the Strickland/Senate bill as written would not create a renewable manufacturing industry here.
“We don’t want to make false promises,” Husted said during a newsconference when defending the decision to remove the cap on rate increases. “We believe to accomplish the goals that have been set out – and to try to generate not just clean energy but a clean energy industry – it will require no false promises.”
So, who will pay?
Husted answers that specific question by saying that Ohio’s utilities will need to build new power plants over the next two decades and that green technologies ought to be in the mix. New power plants have traditionally been financed by increases in rates.
That has the state’s major industrial customers worried.
“Lots of states are looking seriously at benchmarks, and demand for things like solar and wind power already exceeds supply,” said Sandy Theis, spokeswoman for the Ohio Coalition for Affordable Power, which represents the state’s largest industrial power users.
“We need to give these businesses time to develop and don’t think it’s fair to stick the consumers with the bill in the interim,” she said. “We like the 3 percent cap in the Senate bill and think that gives us the right blend of consumer protections and incentives for the renewable industry to develop.”
By John Funk
26 February 2008
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