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Ohio lawmakers may advance at least one bill this week to further delay the state’s enforceable clean energy standards that have been on hold since 2014.
While two proposed “companion bills” — Senate Bill 320 and House Bill 554 — would technically resume targets for the state’s renewable energy and energy efficiency laws, compliance would be voluntary until at least 2020.
Thus, clean energy supporters say either bill would effectively extend the state’s clean energy freeze for several more years.
The Senate Energy and Natural Resources Committee is scheduled to have its fourth hearing on SB 320 at 4 p.m. this afternoon. The House Public Utilities Committee will hold its third hearing on HB 554 at 9 a.m. on Wednesday, possibly ending testimony and voting it out to the House floor.
Opponents say the proposals could significantly harm the competitiveness of Ohio’s clean energy industry because business opportunities will go to states with enforceable standards rather than voluntary goals.
“We’re the seventh-largest state,” Bill Sprately, executive director of Green Energy Ohio, said at a Nov. 18 conference in Columbus. “If we don’t start paying attention at the government level, the other states are passing us by.”
‘Short-sighted’
Ohio’s renewable and energy efficiency standards have been frozen at their current levels since 2014 and are set to resume next year. Gov. John Kasich has previously said that he would not accept further attempts to extend the freeze.
The same law that put the freeze in place also allowed large electricity customers to opt out of the energy efficiency standard, eliminated a separate advanced energy standard, and expanded the scope of what counts for both renewable energy and energy efficiency.
Supporters of the clean energy standards say their return in even the modified form from 2014 would improve air quality in Ohio, lead to lower energy bills for consumers and spur job growth in the state.
Meanwhile, speakers at the Green Energy Ohio conference noted, the clean energy standards are just one of multiple issues that will be taken up by state legislators in the coming year. That’s yet another reason they say lawmakers should not try to push through changes to the clean energy standards in this year’s lame-duck session.
For example, Dayton Power & Light is “pushing for a legislative change to expressly allow the PUCO to authorize financial integrity payments to utilities,” said Dylan Borchers, a lawyer at Bricker & Eckler in Columbus, whose clients include the Ohio Hospital Association. That move comes in the wake of regulators’ recent ruling to charge customers to bolster FirstEnergy’s credit rating.
Beyond that, both American Electric Power and FirstEnergy plan to press Ohio lawmakers for full or partial re-regulation. “And that fight is going to happen,” Borchers said.
In addition, grid modernization is a high priority for leadership at the Public Utilities Commission, noted Steve Caminati of Melamed Communications.
“I see all of those things merging into one comprehensive energy bill,” Caminati said.
In light of all those issues, a piecemeal approach makes little sense, stressed Trish Demeter of the Ohio Environmental Council.
“It would be short-sighted to enact even more changes to Ohio’s energy policies, whether it be a freeze extension, an expanded industrial opt-out, trimmed down standards or voluntary clean energy goals,” Demeter said when she testified before the House committee on Nov. 16. “Doing so would be taking the issue of Ohio’s clean energy standards completely out of context of these other, larger issues at play.”
Competing with natural gas
Bill supporters have argued that much has changed since the renewable energy and energy efficiency standards were first adopted in 2008, particularly with the natural gas industry.
For example, SB 320 sponsor Sen. Bill Seitz has talked about the abundant natural gas supplies that have become available in the state since the expansion of fracking and horizontal drilling.
“And the expectations that existed in 2007 and early 2008, when Ohio adopted electricity supply-side and demand-side mandates, are very different than today’s realities,” Sam Randazzo, counsel for the Industrial Energy Users-Ohio testified on Nov. 15. In his view, those include “the energy price and reliability benefits that are currently flowing from our abundant domestic shale resources.”
Supporters of the clean energy standards agree there’s “so much that’s changed,” especially since the 2014 freeze went into effect.
“Market trends are increasingly going towards clean energy, not away,” Demeter said in her testimony. “The price for renewable energy continues to rapidly decline. Older, coal-fired power plants are struggling to compete against cheaper, more efficient resources. ”
Energy storage has also become more important for making renewable energy a good long-term hedge against fuel prices, stressed David Dwyer of American Renewable Energy in Columbus. “We feel that the benefits of a project triple when you add storage,” Dwyer said.
And although natural gas is a cleaner-burning fuel than coal, “there are climate complications” and other environmental concerns, Demeter noted at the Nov. 18 conference. Issues include fugitive emissions, potential pollution from drilling and waste disposal, and a host of pipeline-related concerns.
In her view, renewable portfolio standards are also “very important policy-wise” for providing cleaner air, addressing climate change and providing good jobs.
“If we don’t have state policies that stipulate renewables are going to be part of the future portfolio, then utilities will engage in natural gas,” Demeter said. “We should be prioritizing true renewables and not just letting natural gas edge that out.”
The bottom line
Consumer costs are also a big reason to bring back clean energy standards rather than goals, supporters say.
Costs for complying with the renewable energy standard “have stayed well below one dollar per month for almost all of the last eight years,” Alan Rosenfield, of the League of Women Voters of Ohio, said when he testified before the Senate committee last week. “Renewable energy compliance costs account for less than 1 percent of electric bills and less than 4 percent of the rate increases since 2008.”
In contrast, Ohio Consumers’ Counsel Bruce Weston attached a “subsidy scorecard” to his Nov. 22 testimony. It shows $14.67 billion in subsidies that have been collected for a wide range of things by Ohio utilities since 2000, plus an additional $235.11 million that they would collect in additional charges starting in 2017.
In light of that, Weston said, utilities should be required to go through competitive bidding for their energy efficiency programs. That and other consumer protection provisions should guard against utilities improperly profiting from those programs at customers’ expense.
In particular, Weston said, “There should be a limit on the measures that qualify for shared savings or other utility incentives,” plus additional consumer protection provisions to correct for problems made possible by the 2014 amendments. He added that proposed changes to the low-income energy assistance program should be made only after a full hearing process, “not rushed in the post-election session.”
For now, though, the two legislative committees appear poised to press forward during the lame-duck session.
“We’re trying to flood these committees with people testifying in opposition … just to show en masse the opposition to further attempts to kick the can down the road and not address these issues and perpetuate market uncertainty for the standards,” Caminati said.