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On the same day that a new study reported that more than 300 companies in Ohio are part of the supply chains for the wind and solar industries, lawmakers voted a bill out of committee that would make compliance with the state’s clean energy standards voluntary until 2020.
If House Bill 554 becomes law, critics say the state would lose out on business opportunities and jobs. In their view, the bill would also discourage competition, keep electricity prices high and promote pollution that causes health problems and contributes to climate change.
“We’re either going to move in a clean energy direction that produces new jobs related to solar and wind and efficiency,” said Rob Kelter of the Environmental Law & Policy Center, which released the supply chain report on Nov. 30. “Or we’re going to let other states and other countries manufacture these new products.”
‘Behind the radar’
According to the supply chain report, 207 Ohio companies supply the solar energy industry, 134 manufacture things for the wind energy industry, and 20 serve as suppliers for both industries.
Those companies’ manufacturing operations “are sort of behind the radar,” Kelter noted.
For example, the report notes, Art Iron in Toledo fabricates steel supports for solar canopies and wind turbine main frames. Dyson Corporation in Painesville makes hardware that can be used in wind turbines. Dupont’s facility in Circleville makes Tedlar film, which is used in backsheets for solar panels. Rittal Corporation in Urbana provides enclosures that protect equipment for solar and wind energy from the elements.
Such products “don’t grab the public’s attention, because the public doesn’t go out and buy those products in the stores,” Kelter said. “But they’re really important, and they’re employing a lot of people.”
But federal and state policies are “key” to encouraging investment in those industries to create even more jobs, according to the report.
Important policies at the federal level include tax incentives, grants and loans under the Rural Energy for America Program, and the Clean Power Plan, the report notes. State policies that play a big role include renewable energy and energy efficiency standards, as well as net metering and interconnection rules.
Ohio’s lawmakers weakened and froze additional requirements under the renewable energy and energy efficiency standards in 2014. Those standards are due to come back in their amended form at the end of this year.
Yet even in their weaker form, the clean energy standards are important for Ohio businesses in the wind and solar supply chains, Kelter said.
“What the standards do is they ensure that Ohio will be needing the parts and pieces that are manufactured by these companies [and] that Ohio will be an important customer and…a major player,” Kelter explained.
‘Far less attractive’
Under HB 554, utilities and other electricity suppliers would face no risk of enforcement if they failed to realize any more improvements in energy efficiency and renewable energy before 2020.
Multiple provisions would also weaken the standards further. For energy efficiency, the bill would reduce the final target from 22 to 17 percent of the average annual emissions from the baseline years of 2006 to 2008. The bill would also expand the classes of customers who could opt out and let utilities count things such as wastewater treatment improvements.
Opponents of the bill warned the House Public Utilities Committee about possible consequences for the state’s business and jobs outlook when they testified on Nov. 30.
“As a state we can embrace a cleaner energy source and help communities and businesses create jobs to build a sustainable energy future,” Green Energy Ohio Executive Director Bill Spratley said. Yet even if Ohio were to pass the bill, “the technologies will not be stopped by legislative edicts. Solar and wind costs are continuing to decrease.”
“The real damage to Ohio is its relative position to other states that are growing renewable energy faster by encouraging investment and new jobs,” Spratley stressed.
“Nationally, renewable energy has been growing at a remarkable pace, providing hundreds of thousands of new, well-paying jobs,” said Robert Brecha of the University of Dayton’s Hanley Sustainability Institute when he testified before the lawmakers. “Ohio has been part of that trend, with renewable energy jobs in the state far surpassing those in the coal industry, for example. These are the jobs that our students are interested in for their careers.”
“I am concerned that HB 554 and [companion bill] SB 320 would serve to make Ohio’s business climate far less attractive, as other states move forward with renewable energy development,” Brecha said. “And eliminating incentives for energy efficiency serves nobody’s interests.”
“We ask that Ohio not take itself out of the running as the rest of the region moves forward toward building out its clean energy infrastructure,” said Chris Neme of Energy Futures Group, testifying on behalf of the Natural Resources Defense Council.
Consumers also stand to save if enforceable standards return, witnesses told the lawmakers.
“Energy efficiency can benefit both those participating in the programs and those who pay for the programs but do not participate,” Ohio Consumers’ Counsel Bruce Weston said. “All customers benefit because efficiency can be used to reduce the need for power generation.”
For example, a recent report found that Michigan’s efficiency standards were saving ratepayers $4.35 for every dollar invested.
“Put simply, energy efficiency should be treated as a resource that can be acquired in lieu of other supply and demand resources,” Neme said.
If anything, he and other witnesses said, the energy efficiency standard should be tightened to eliminate provisions added in 2014 that weaken it while expanding profit opportunities for utilities.
Renewable energy also helps consumers save money, witnesses said.
“Electricity from new wind farms sells for about $35 per MWh in our part of the country while Ohioans are paying over $50 per MWh for traditional sources of power,” said Al Rosenfield of the League of Women Voters of Ohio.
Solar and wind energy are also a hedge against fluctuating prices because they have no fuel costs after installation, Kelter noted. “Even natural gas, as cheap and plentiful as it is, doubled in price in 2014 when we had a cold winter,” he said. “Prices might have gone even higher if not for the presence of non-fossil resources, especially wind, in the PJM generation market.”
‘An obligation to step in’
“Even if you don’t believe in any of the clean air and other environmental benefits of renewables, they should be part of a balanced portfolio,” Kelter added.
Yet those environmental benefits are important, witnesses told the lawmakers.
“If we were to allow the old standards to snap back into place, in just one year we could avoid 2,230 asthma attacks, 120 trips to the ER, 230 heart attacks and more than 16,000 sick days from work and school,” said Melissa English of the Ohio Citizen Action Education Fund.
Emissions from coal and natural gas also produce greenhouse gases, which lead to climate change. And climate change is already causing serious impacts, reported Mike Foley, who heads the Department of Sustainability for Cuyahoga County.
“The results are more severe and costlier storms, longer and worse droughts, ecosystems being disrupted, moving or dying off,” Foley said. “We are fundamentally changing our environment in harmful ways.”
“At times like this, Government has an obligation to step in and ensure that positive changes are made in order to set a different path,” Foley continued. Indeed, he added, “because Ohio has such a high reliance on coal as a generation source for our electricity, I believe we have a greater responsibility to change our ways.”
HB 554 now heads to the full House for debate and a possible vote. If passed in both the House and the Senate, it would then be up to Gov. John Kasich to either sign or veto the bill.
Kasich has told the Columbus Dispatch he doesn’t want to see “a headline that Ohio went backward on the environment.” However, he stopped short of saying outright that he would veto the bill.