Policies for new utility charges, natural gas, nuclear power promotion and solar energy were scattered throughout the 6,198-page two-year budget bill passed by Ohio lawmakers on June 30. Line item vetoes released in the wee hours of July 4 cut some terms and modified others.
Ohio’s two-year budget bills have grown in recent years into massive catch-all legislation that has drawn criticism for a lack of transparency. Lawmakers don’t need to disclose who is behind various amendments, especially ones added in conference committee talks. Changes in policies on energy, education and other matters are not debated in committees with expertise on those topics. And the public has few or no opportunities to testify on some revisions.
“Ohio has a history of making bad energy decisions in bills that don’t get sunlight, and oftentimes those are budget bills,” said Senate Minority Whip Kent Smith, D-Euclid. As an example, he noted the tripling of Ohio’s wind turbine setbacks in 2014, for which there had been no chance for committee testimony.
Here’s a rundown of energy developments in the new budget law, House Bill 33.
New charges for utilities’ speculative infrastructure development are out — for now.
Gov. Mike DeWine’s line item vetoes slashed terms that would have let utilities recover money spent for extending infrastructure to sites that might or might not attract new business. Language in the bill would have let the Public Utilities Commission of Ohio determine whether electric utilities could recover the money from ratepayers or an All Ohio Future Fund. Terms for the fund also would have let it pay for gas infrastructure.
But the issue will likely surface again. DeWine’s veto message said his administration “supports creating a strategic plan for extending electricity and natural gas to high-priority sites in advance of an end user, while ensuring that the process is fair to consumers.”
For now, the governor’s action “protected consumers by vetoing a new electric-utility subsidy charge,” Ohio Consumers’ Counsel Bruce Weston said. The Office of the Ohio Consumers’ Counsel and Ohio Manufacturers’ Association had both opposed the proposed terms.
Natural gas infrastructure charges can now include certain spending for hydrogen hubs and blending.
Natural gas companies can generally recover from ratepayers the just and reasonable costs for equipment and facilities that are “used and useful in rendering public utility services.” The two-year budget law will now let the Public Utilities Commission of Ohio include some charges to enable connections with hydrogen facilities that enable its blending with natural gas.
Fuel cells powered by hydrogen don’t produce greenhouse gases and are generally more efficient than burning natural gas. And some critics question whether so-called blue hydrogen hubs that would produce hydrogen from natural gas and sequester carbon emissions from that process would in fact lower emissions and costs. Blending hydrogen with methane is more controversial.
“The budget bill would allow gas companies to make ratepayers pay for infrastructure that uses a mix of hydrogen and methane gas, a fossil fuel. That’s not real clean energy,” said Dave Anderson, policy and communications manager for the Energy and Policy Institute. “Meanwhile, state programs that once supported renewable energy and energy efficiency remain rolled back by the bribery-tainted HB 6.”
Up to $220 million from the state’s oil and gas well fund could go into the general revenue fund next year, instead of being used to plug wells.
Lawmakers would have protected Ohio’s oil and gas well fund from possible transfers of up to $220 million if the state’s general revenue fund needs the money in 2025. DeWine’s line item vetoes got rid of the exclusion.
Monies in the oil and gas well fund come from the relatively small severance tax oil and gas producers pay and are meant to help clean up between 36,000 and 66,000 orphaned and abandoned oil and gas wells in the state, said Ted Boettner, a senior researcher with the Ohio River Valley Institute. Costs could run between $3 billion and $6 billion to take care of those wells, and more wells could be abandoned in coming decades, he added.
“Using dedicated special revenue funds to balance the budget instead of for its intended purpose — to clean up well sites — will hurt the oil and gas workers that depend on those jobs to make a living,” Boettner said.
A new Ohio nuclear development authority has slightly less authority.
The Ohio Senate had cut provisions for an Ohio nuclear development authority which had failed to pass in three earlier legislative sessions. But those provisions were back in the bill passed by lawmakers on June 30.
“That’s the power of the conference committee. Very disappointing,” said lawyer Terry Lodge, who had argued against the provisions.
DeWine’s line-item vetoes did cut terms that would have let the new authority enter into agreements with certain federal agencies. The vetoes also got rid of a separate committee that would have nominated candidates for the nine-member authority.
Terms to limit the legal liability for liquefied petroleum gas suppliers are out.
DeWine’s line item vetoes slashed terms that would have excused liquefied petroleum gas suppliers from most civil liability claims except for intentional misconduct. The terms would have significantly changed Ohio’s product liability law for one specific industry “by seemingly absolving it of certain causes of action and meaningful duty of care,” DeWine’s veto message said.
PILOT programs for solar projects were extended.
The budget law extends for four years the Payment in Lieu of Taxes (PILOT) program for utility-scale solar and other qualifying energy projects. PILOT payments let project developers work with local communities to provide packages of monetary benefits instead of property tax payments that might otherwise be due.
The new law lowers the necessary percentage of solar project workers who must live in Ohio in order to qualify for the program, from 80% to 70%. For non-solar projects the percentage remains only 50%.
Another provision would have let developers include workers living across state lines as long as they belonged to an Ohio union. DeWine used a line item veto to delete that out-of-state exception.