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Ohio legislature passes solar and wind project siting and approval bill

It’s been a long and winding road to the Governor’s desk for Senate Bill 52, the controversial bill on siting and approval of large-scale wind and solar facilities in Ohio. The bill generated opposition and concern from the outset, requiring a major overhaul early on. A substitute bill passed the Senate on June 2 after six hearings and hundreds of witnesses testifying for and against the bill. It took the House five hearings to pass a further revised version of the bill, and the Senate agreed to those revisions the same day. Now the bill awaits Governor DeWine’s action. If the Governor signs the bill, it would become effective in 90 days.

S.B. 52 generates conflicting opinions on property rights and renewable energy. It would grant counties and townships a voice in the siting and approval of large-scale wind and solar projects, allowing a community to go so far as to reject facility applications and prohibit facilities in identified restricted areas of the county. Supporters of the bill say that new local authority would allow local residents to protect their individual property rights as well as the fate of the community. On the other side, opponents claim that the bill interferes with the property rights of those who want to lease their land for solar and wind development and unfairly subjects renewable energy to stricter controls than other energy projects.

The bill itself is lengthy and a bit tedious but we’ve organized it into the following summary. An important first step is to understand the types of projects subject to the law, so we begin with the definitions section of the bill.

Definitions – Ohio Revised Code 303.57

The bill defines several key terms used to identify the types of wind and solar projects and applications that would be subject to the new law:

• “Economically significant wind farm” means wind turbines and associated facilities with a single interconnection to the electrical grid and designed for, or capable of, operation at an aggregate capacity of five or more megawatts but less than fifty megawatts, excluding any such wind farm in operation on June 24, 2008 and one or more wind turbines and associated facilities that are primarily dedicated to providing electricity to a single customer at a single location and that are designed for, or capable of, operation at an aggregate capacity of less than twenty megawatts, as measured at the customer’s point of interconnection to the electrical grid.

• “Large wind farm” means an electric generating plant that consists of wind turbines and associated facilities with a single interconnection to the electrical grid that is a “major utility facility.”

• “Large solar facility” means an electric generating plant that consists of solar panels and associated facilities with a single interconnection to the electrical grid that is a major utility facility.

• “Utility facility” means all of the above.

• “Major utility facility” means (a) electric generating plant and associated facilities designed for, or capable of, operation at a capacity of fifty megawatts or more, (and also includes certain electric transmission lines and gas pipelines).

• “Material amendment” means an amendment to an existing utility facility certificate that changes its generation type, increases its nameplate capacity or changes the boundaries outside existing boundaries or that increase the number or height of wind turbines.

Designation of utility facility restricted areas in a county – ORC 303.58 and ORC 303.59

The bill would allow the county commissioners to designate “restricted areas” within the unincorporated parts of the county where economically significant wind farms, large wind farms, and large solar facilities may not be constructed.

• The commissioners may take this action at a regular or special meeting.

• The commissioners must give public notice of the meeting and proposed restricted areas at least 30 days prior, including to all townships, school districts and municipalities within the proposed restricted areas.

• The restricted area designations shall not apply to utility facilities that were not prohibited by the commissioners in the county review under ORC 303.61, described below.

• The restricted area designations become effective 30 days after the commissioners adopt the resolution unless a petition for referendum, described below, is presented to the commissioners within 30 days of adoption.

• Once effective, a restricted area designation prohibits anyone from filing an application for a certificate or a material amendment to an existing certificate to construct, operate or maintain a utility facility in the restricted area.

Referendum on designation of utility facility restricted areas – ORC 303.59

If a county approves a restricted area, the bill sets up a referendum procedure to allow voters to have a say in the designation. Residents may file a petition for referendum and request the county commissioners to submit the designation of a utility facility restricted area to a vote of the electors in the county.

• At least 8% of the total vote cast for governor in the most recent election must sign the petition.

• The petition must be presented to the commissioners within 30 days of the resolution adopted to designate the restricted areas.

• Within two weeks of receiving the petition and no less than 90 days prior to the election, the county commissioners must certify the petition to the county board of elections, who must verify the validity of the petition.

• The utility facility restricted area designation must be submitted to electors for approval or rejection at a special election on the day of the next primary or general election that occurs at least 120 days after the petition is filed.

• If a majority of the vote is in favor of the restricted area designation, the designation shall be effective immediately.

County review of proposed wind and solar utility facilities – ORC 303.61

Local residents and officials have expressed concerns that they’re the last to know of a proposed large-scale wind or solar development proposed for their community. Under the bill, utility facilities must hold a public meeting in each county where the facility will be located within 90 to 300 days prior to applying for or making a material amendment to an application for a certificate from the Ohio Power Siting Board.

• The facility applicant must give a 14 day advance written notice of the public meeting to the county commissioners and to trustees of townships in which facility would be located.

• At the meeting, the facility applicant must present in written form the type of utility facility, its maximum nameplate capacity, and a map of its geographic boundaries.

• Up to 90 days after the public meeting, the county commissioners may adopt a resolution that prohibits the construction of the facility or limits its boundaries to a smaller part of the proposed location. If the county commissioners do not prohibit or limit the facility, the applicant may proceed with the application.

Ohio Power Siting Board Composition – ORC 4906.021 to ORC 4906.025

The bill also responds to concerns that community members do not have a voice in the facility approval process overseen by Ohio’s Power Siting Board (OPSB). For every utility facility application or material amendment to an application, the bill would require the OPSB to include two voting “ad hoc” members on the board to represent residents in the area where the facility is proposed.

• The ad hoc members shall be the chair of the township trustees and the president of the county commissioners in the township and county of the proposed location, or their elected official or resident designees, or a trustee and commissioner chosen by a vote of the trustees and commissioners if the application affects multiple townships and counties.

• An ad hoc member or the member’s immediate family members cannot have an interest in a lease or easement or any other beneficial interest with the applicant utility facility and cannot be an intervenor or have an immediate family member who is an intervenor in the OPSB proceeding.

• The ad hoc members must be designated no more than 30 days after the county or township is notified by the OPSB that the application has been submitted and meets statutory requirements.

• An ad hoc member may not vote on a resolution by its county commissioners or township trustees to intervene in the application proceeding.

• An ad hoc member is exempt from restrictions on ex parte communications with parties in the case but must disclose the date and participants of ex parte conversations and shall not disclose or use confidential information acquired in the course of official duties.

OPSB Authority – ORC 4901.101; ORC 4906.30

There are parameters in the bill for projects that the OPSB may not approve. The OPSB may not grant a certificate for the construction, operation, and maintenance of or material amendment to an existing certificate for a utility facility in these situations:

• If the utility facility is prohibited by a restricted area designation.

• If the county commissioners have prohibited the utility facility by resolution.

• Where the utility facility would be in multiple counties, the OPSB must modify a certificate to exclude the area of a county whose commissioners prohibited the facility.

• For any areas outside the boundaries of the utility facility that were changed by action of the county commissioners.

• If the facility has a nameplate capacity exceeding the capacity provided to the county commissioners, has a geographic area not completely within the boundaries provided to the county commissioners, or is a different type of generation than that provided to the county commissioners.

Decommissioning Plans for Utility Facilities – ORC 4906.21 to ORC 4906.212

The question of what happens to a facility when its production life ends has been another issue of voiced concern. The bill establishes decommissioning procedures for facilities. At least 60 days prior to commencement of construction of a utility facility, an applicant must submit a decommissioning plan for review and approval by the OPSB.

• A state registered professional engineer must prepare the plan, and the OPSB may reject the selected engineer.

The plan must include:

• A list of parties responsible for decommissioning of the utility facility.

• A schedule of decommissioning activities, which cannot extend more than 12 months beyond the date the utility facility ceases operation.

• Estimates of the full cost of decommissioning, including proper disposal of facility components and restoration of the land on which the facility is located to its pre-construction state, but not including salvage value of facility materials.

• The estimate of the full cost of decommissioning a utility facility must be recalculated every five years by an engineer retained by the applicant.

Performance Bonds – ORC 4906.22 to ORC 4906.222

How to [pay] and who pays for facility decommissioning is also addressed in the bill. Before beginning construction of a utility facility, the applicant must post a performance bond to ensure that funds are available for the decommissioning of the facility.

• The utility facility must name the OPSB as the bond oblige.

• The bond shall equal the estimate of decommissioning costs included in the facility’s decommissioning plan.

• The bond shall be updated every five years according to the most recent costs of decommissioning the facility and shall increase if estimated costs increase but shall not decrease if estimated costs decrease.

OPSB Provision of Approved Application – ORC 4906.31

Under the bill, local governments would formally know if a project receives OPSB approval. The OPSB must provide a complete copy of an approved application for or material amendment to a certificate to each board of trustees and county commissioners in the townships and counties of the facility location.

• The copy must be provided within 3 days of the OPSB’s acceptance of the application and filing fee payment by the applicant.

• The copy may be in electronic or paper form.

Effect on Utility Facility Applications in Process – Sections 3, 4 and 5 of the Act

Many wind and solar facility projects are currently in process, so the bill addresses what happens to those projects should the law go into effect.

• The new law would apply to all applications for a certificate or a material amendment to an existing certificate for an economically significant wind farm or large wind farm that is not accepted by the OPSB within 30 days after the effective date of the legislation.

• An application for an economically significant wind farm or large wind farm that is not approved within 30 days after the effective date would be subject to review by the county commissioners, who would have 90 days after the effective date to review the application and act according to the provisions of the new law.

• If an application for a certificate or material amendment to a certificate for a utility facility has not been accepted by the OPSB as of the new law’s effective date, the OPSB must include “ad hoc” members in further OPSB proceedings on the application.

• The new law would not apply to an application for a certificate or material amendment to a certificate for a large solar facility that, as of the effective date of the new law, is in the new services queue of the PJM interconnection and regional transmission organization at the time the application is accepted by OPSB and the applicant has received a completed system impact study from PJM and paid its filing fee.

• If the facility has multiple positions in the PJM new services queue, all queue position in effect on the law’s effective date are exempt from the new law.

• If the facility submits a new queue position for an increase in its capacity interconnection rights, the change shall not subject the facility to the new law as long as the facility’s nameplate capacity does not increase.

We’ll keep an eye on the Governor to learn where S.B. 52’s road will end.