A state requirement for many utility companies to eventually generate a quarter of their power from renewable energy sources could be changed, which might threaten the future of local projects such as the planned $250 million wind farm in Champaign County.
Supporters of the alternative energy requirement say the state law has spurred investment in Ohio and created thousands of jobs. But others say the requirement was put in place before significant changes in the energy landscape, including massive deposits of natural gas discovered in the state.
The issue is controversial in Champaign County, where residents and elected officials are debating a proposed wind farm that would install more than 100 turbines in two phases across six townships. Proponents of the project argue it will lead to millions of dollars in investments and new jobs, while opponents have raised concerns about safety and the proximity of the turbines to nearby homes.
When the state’s renewable energy mandate was enacted five years ago, both demand and prices for electricity were expected to rise, said Ohio Sen. Bill Seitz, chairman of the Ohio Senate Public Utilities Committee that is holding hearings this month on the state’s renewable energy requirement.
But since then, large deposits of natural gas in shale have kept energy prices down, Seitz said, and the additional demand hasn’t materialized.
“If that in fact is not what happened, maybe we need to revisit the benchmarks,” Seitz said.
It’s not clear what, if any changes might be made to the law, and both proponents and opponents are expected to continue to discuss the issue this month.
But significant changes to the law now could slow growth, said Steve Caminati, vice president of public affairs for Advanced Energy Economy Ohio.
He pointed to wind farms in Paulding and Van Wert counties, which totaled about $800 million in private investment. Recently, Caminati said those wind farms signed a deal with Ohio State University to provide as much as 25 percent of the university’s electric needs for the next 20 years.
“People stop moving forward, deals slow down because of the legislative uncertainty,” Caminati said. “I think it’s fair to say we’re starting to see that a little bit.”
Much of the debate focuses on the cost to produce energy, as well as what types of energy should be counted toward the mandates.
Renewable forms of energy such as wind and solar are more costly to produce than more traditional forms like coal or natural gas, Seitz said. Those additional costs are usually passed onto customers.
Because the requirement calls for producing 25 percent of power from alternative sources by 2025 – spanning two decades – it makes sense to check in periodically to make sure it’s working as intended, Seitz said.
“My focus is really on at what price do we continue to invest in high cost sources of electricity?” he said.
In Champaign County, projects such as the proposed Buckeye Wind Farm might not exist without the state policy, said Mike Speerschneider, senior director of permitting and government affairs for Everpower Wind Holdings, the company in charge of the project.
A second phase of the project is under review by the state now and could lead to as many as 80 temporary construction jobs and $1.26 million in taxes to the region’s economy.
“The policy is working and it’s one of the reasons we’re in Ohio,” Speerschneider said.
Small changes in the state’s policy might not have much of an effect on projects like the Buckeye Wind Farm, Speerschneider said. But significant changes could create less certainty for developers and investors.
“At some point you have to allow investors and businesses like ours some certainty in allowing us to do what we promised to do,” Speerschneider said.
Another part of the debate is what types of renewable energy are counted toward the state standard. The current policy favors types of energy such as wind and solar, while other forms are excluded, said Lisa Linowes, executive director of the Industrial Wind Action Group. The organization was formed to counteract what it describes as misleading information from the wind industry.
“There’s going to be significant give and take on the arguments,” Linowes said. “I don’t know where it’s going to end up.”
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