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Ohio renewable energy bill could hurt AEP’s wind and solar projects

A plan to scrap Ohio’s renewable energy standards could impact a Columbus utility’s plan to develop large wind and solar projects.

A provision allows customers who shop for their power to not pay the utility costs it passes on from providing new power generation, including from renewables. While American Electric Power Company Inc. handles power distribution and bills for every Central Ohio power user, 35 percent of its customers – more than 511,000 people – shop on the open market for power generation.

AEP wants to build 900 megawatts of wind and solar power, and already has gauged interest from developers on the projects. It has yet to file specific projects with the Public Utilities Commission of Ohio.

Allowing more than a third of its customer base to opt-out of paying for the project could hinder its development prospects – and that’s exactly the point, says one of the bill’s main co-sponsors.

“It is, I would say, a fairly direct response to that,” Rep. Bill Seitz said in an interview.

Seitz, a Cincinnati Republican who chairs the House Public Utilities Committee, said the bill emphasizes that charges related to renewable energy should be by-passable, meaning that customers who shop for power don’t have to pay for the utility’s power-generation costs. If you don’t shop for power, AEP or your local utility is the default provider.

AEP firmed up plans for the development of Ohio-based wind and solar in December 2015 as part of an agreement it signed with the Sierra Club.

The environmental group had been a fierce voice against the utility’s plans to earn subsidies to keep some of its Ohio coal-fired power plants open; it dropped its opposition after AEP committed to the the wind and solar projects.

House Bill 114, which gets its first hearing on Tuesday, could significantly impact the project’s viability, but Seitz doesn’t expect opposition from AEP. There are three major energy initiatives set to be handled by Seitz’s committee this year: this renewable energy bill, a proposal to give Akron-based utility FirstEnergy Corp. subsidies for its Ohio nuclear plants and an AEP-led plan to restructure part of the state energy market. He labels the projects’ timeframe as boxcars one, two and three, and his committee as the engine.