Following the introduction of another proposal aimed at changing Ohio’s renewable energy and energy efficiency mandates, stakeholders are once again debating the future of those mandates.
S.B. 310 keeps the state’s renewable energy mandate at 2014 levels, which require that 2.5% of electricity supply come from renewable resources, including 0.12% from solar, and sets an energy efficiency requirement of 4.2%. Meanwhile, a panel will review and ultimately recommend to lawmakers by Dec. 15, 2015, an approach to take in the future.
In general, utilities and business and industrial customers favor the bill, while those in the environmental and renewable energy community want lawmakers to reject the idea. The Senate Public Utilities Committee held hearings on the proposal on April 2, 8 and 9.
During the first of those hearings, the bill’s sponsor, state Sen. Troy Balderson, said that current requirements need reform and that the bill lays out the best way to determine those changes.
But environmental groups and renewable energy developers disagree, arguing April 9 that the bill will hurt efforts to support clean energy development and advances made in energy efficiency in Ohio.
Michael Speerschneider, chief permitting and public policy officer for EverPower Wind Holdings Inc., said projects that the company is developing in Ohio will bring jobs, economic development and environmental benefits. There is no benefit to freezing the mandates, he said in testimony.
“[T]here is no clear data to suggest that the [alternative energy portfolio standard] will result in significantly higher costs for consumers and a freeze is an arbitrary and short-sighted step that will only do harm to an industry that could very well be providing broad benefits to consumers in Ohio,” he said.
Christopher Sherman, director of regulatory and legislative affairs for NextEra Energy Resources LLC, said repeated attempts to repeal or alter the alternative energy portfolio standard undermine confidence in Ohio’s renewable energy market. “Our fear is that this bill simply perpetuates that unstable regulatory regime,” he said in testimony.
Cheryl Roberto, a former member of the Public Utilities Commission of Ohio who now leads the Environmental Defense Fund’s Clean Energy Initiative, said in testimony the bill is a missed opportunity to continue the development of Ohio’s energy system.
“While visionary legislation could be a vehicle to enhance Ohio’s ability to capture innovation through a platform for competitive markets free from barriers to competition; this is not that legislation. … Instead of harnessing future economic opportunity it would pull Ohio backward through anti-competitive retrenchment,” she said.
Along with the freeze, S.B. 310 requires any electric distribution utility with a portfolio plan for compliance with the energy efficiency requirements to continue its current PUCO-approved plan through the end of 2016 or amend its plan. Should a utility amend its plan, the bill allows certain industrial customers to opt out of the energy efficiency programs.
Utilities support ‘pause button’
AEP Ohio spokeswoman Terri Flora said April 10 that S.B. 310 is moving in the right direction.
“It hits that pause button and allows for a more comprehensive study of the competing interests in order to determine the best path for Ohio,” she said, adding that it also allows AEP Ohio to continue with its programs. AEP Ohio, known legally as Ohio Power Co., is a subsidiary of American Electric Power Co. Inc.
Duke Energy Corp. subsidiary Duke Energy Ohio Inc. is still reviewing the bill, but generally supports the idea and appreciates that it preserves existing plans through their expiration dates, spokesman Blair Schroeder said.
FirstEnergy Corp. spokesman Doug Colafella said the bill sets up a meaningful process to review the mandates set up years ago.
“The condition of Ohio’s economy, lack of electric growth we’ve seen as a result, we feel it makes sense for the state to step back and evaluate whether the costs of these mandates will exceed them in years to come,” he said.
FirstEnergy has three EDCs in Ohio, Cleveland Electric Illuminating Co., Ohio Edison Co. and Toledo Edison Co.
The bill is the most recent in a lengthy debate over the mandates.
Existing law requires Ohio’s investor-owned utilities to put in place energy efficiency and peak demand reduction programs that lead to cumulative electricity savings of 22% by 2025.
Also by 2025, 25% of the electricity sold must come from alternative energy sources. Half of that, 12.5%, must come from renewable resources such as wind, hydro and biomass, with 0.5% from solar. According to the American Wind Energy Association, Ohio has 431 MW of wind capacity installed, producing less than 1% of its electricity supply. The rest can come from “advanced sources” such as nuclear, clean coal and some fuel cells. At least half of the renewable energy required must be purchased from in-state projects.
The bill removes the advance resource requirement and ends the peak demand requirement.
Industrial groups seek opt-out fix
Groups representing the state’s industrial customers support the bill, but would like to opt out of efficiency programs.
Industrial Energy Users-Ohio General Counsel Sam Randazzo in testimony April 8 said the mandates make electricity more expensive and that the “indefinite time out” called for in S.B. 310 is necessary. However, a more timely and certain opt-out provision would improve the bill. As the bill now stands, if an electric utility does not seek a plan amendment, “then its customers have no access to immediate relief from the compliance costs through a streamlined opt-out before January 1, 2017.”
David Ciarlone, president of the Ohio Energy Group, pointed to a new law in Indiana that halts the state’s energy efficiency efforts and encouraged Ohio to do the same.
He said industrial customers be allowed an opt-out soon.
“Ohio should not allow itself to be left behind,” he said in testimony filed April 9. “There is no reason for Ohio to force its industrial customers to remain trapped in their utility-managed energy efficiency programs when these same companies are free to exercise their own judgment in other states.”
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