Some of Ohio’s largest and best-known businesses are at odds this week over a proposal that would stop mandated annual increases in “green” energy purchases by utilities.
This includes power produced using renewable resources, such as wind and solar.
The supporters of Ohio Senate Bill 310 include FirstEnergy, Timken Co. and Marathon Petroleum. Opponents include Honda, Whirlpool and Owens Corning.
“What you see between them is two different views of the future of how we produce energy in this country,” said Ned Hill, an economist and dean of the College of Urban Affairs at Cleveland State University.
As he sees it, the bill’s supporters are looking for the best deal in the current system in which electricity is mainly provided by large power plants and major utilities.
The opponents view renewable energy and energy efficiency as essential for the system that is likely coming, in which large power plants are so expensive to build that the country will need to have viable alternatives, he said.
Supporters of the measure would disagree with Hill’s view. They say the green rules are a long-term drag on the economy and an impediment to companies with the most innovative approaches to managing energy.
At issue is whether the state should continue with annual increases in the amount of renewable energy that electricity utilities are required to purchase and the energy efficiencies they must facilitate. A 2008 law set annual benchmarks that continue until 2025. The current proposal would freeze the standards at 2014 levels, canceling the next 11 years worth of increases.
Lawmakers held hearings this week and will likely vote on the measure next month.
Utilities pay for renewable energy and energy-efficiency programs through special charges that appear on customers’ bills. This ranges from about $5 per month for a typical household to more than $100,000 per month for a large company.
Timken, a maker of steel and ball bearings, estimates it will pay $2 million this year.
“The ‘freeze’ contemplated by S.B. 310 is a timely salve for this seriously bleeding wound,” said Peggy Claytor, a Timken lobbyist, testifying on Tuesday before the committee considering the bill.
FirstEnergy, the Akron-based utility, says it is being hurt by various mandates that drive down electricity demand and are bad for the economy.
Renewable energy and energy efficiency are “examples of what ‘sounds good,’ ” said Anthony Alexander, president and CEO of FirstEnergy, speaking on Tuesday to the U.S. Chamber of Commerce in Washington, D.C.
“And, while they may all play some role in meeting the energy needs of customers, they are not substitutes for what has worked to sustain a reliable, affordable and environmentally responsible electric system.”
On the other side, a group of 11 companies – including Honda, Honeywell, Whirlpool and Owens Corning – wrote this week to urge state lawmakers to reject the proposal.
“We believe that policies promoting efficiency should continue to be a part of Ohio’s plan to attract economic investment and encourage growth,” the letter said. It concluded that “undermining these standards is wrong for Ohio, its residents and its businesses.”
Beyond the big-name companies, many business groups have entered the fray. The bill has the support of the Ohio Chamber of Commerce, Industrial Energy Users-Ohio and the Ohio Council of Retail Merchants, among others.
The opponents include Ohio Advanced Energy Economy, a trade group for clean-energy companies.
“The energy age will be one of the great booms of this century, and (the proposal is) running away from it,” said Steve Melink, president of Melink Corp., a Cincinnati-area company that works with clients to manage their energy use and develops renewable-energy projects.
He spoke at a news conference yesterday with other business owners and executives who oppose the bill.
Hill, the Cleveland State economist, said the intensity of the debate is understandable considering the rapid changes taking place in the energy economy, changes that will likely happen regardless of the outcome on this proposal.
“The transition is very scary,” he said.
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