A new group of Ohio senators is working on a bill to freeze the state’s renewable energy mandates and energy-efficiency requirements, leaping ahead of the long-discussed proposal by state Sen. Bill Seitz, R-Cincinnati.
John McClelland, spokesman for Senate President Keith Faber, R-Celina, would not discuss specifics about a timetable for the bill’s introduction or why it’s being introduced, although people in the alternative-energy industry told me one could be introduced as soon as this week. McClelland confirmed that Faber is involved in the bill’s process but doesn’t plan to introduce it himself.
Seitz long has tried to pass a bill to alter Ohio’s 2008 mandates, which require utilities to meet increasing energy-efficiency and alternative energy benchmarks. His bill – now called Senate Bill 58 – didn’t gain traction last year, but he vowed last month that “something will happen in calendar year 2014, immediately before or after November elections.”
Current law, passed with bipartisan support in 2008, requires Ohio utilities to generate 25 percent of their electricity via alternative energy by 2025. They must generate 12.5 percent of that power via renewable energy, and 0.5 percent of that must be from solar energy.
The renewable energy portion has yearly benchmarks that companies must meet. For this year, that number is only 2.5 percent, and 0.12 percent for solar energy. Utilities don’t have to meet interim benchmarks regarding non-renewable advanced energy, which includes fuel cells and “clean coal.”
Renewable energy includes wind, solar and geothermal sources.
Additionally, half of the 25 percent alternative energy requirement must be from facilities located in Ohio. The other key part of the 2008 bill requires utilities to implement energy efficiency programs to reduce energy usage by 22 percent by 2025. That, too, requires yearly benchmarks to be met, which this year stand at 4.2 percent.
If the bill were to freeze benchmarks rather than repeal them, Ohio utilities would still have to meet that 4.2 percent benchmark by year’s end. After that, though, the planned jumps would not need to be met until or if a freeze is lifted.
Utilities have grown increasingly unhappy with the mandates, arguing that the energy market today is much different than it was when the law was passed in 2008. AEP Ohio President Pablo Vegas told me earlier this month that economic growth has slowed since 2008, reducing demand for electricity consumption.
“When you look at the realities, you have lower cost for the product, lower demand for the product, yet the law mandates an increase every year in the amount of efficiencies gained. So you’re essentially investing your ratepayers’ money to lower or curb a growth that isn’t there,” said Vegas, whose company supports Seitz’s bill.
A freeze could have a huge negative impact on solar, wind and other alternative energy companies who operate in the state. Geoff Greenfield, president of Third Sun Solar in Athens, told me that projects statewide are already stalling because of the uncertainty surrounding renewable energy law. He refuted the claim from utilities that companies like his should be able to survive and thrive without relying on mandates like those in the 2008 bill.
“Right now the cost of mainstream energy enjoys incredible subsidies,” he said.
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