Ohio lawmakers charged with reviewing the costs and benefits of the state’s clean energy standards limited the testimony they received during hearings that were used to justify a two-year “freeze” on those standards.
The limitations raise questions about a forthcoming report due from a legislative committee by the end of the month and what action the full legislature is likely to take in response to it.
Meanwhile, environmental groups, industry groups and several Democratic lawmakers have called on Ohio to end the current freeze and reinstate the standards at significant levels.
However, Democrats make up a minority of both houses of Ohio’s General Assembly, as well the committee currently reviewing Ohio’s clean energy standards. Moreover, others on the committee appear loathe to let the standards take effect again.
If a majority of lawmakers agreed with them, Ohio could continue to find itself with no enforceable standards to increase renewable energy and energy efficiency beyond current levels.
By invitation only
Benchmarks under Ohio’s renewable energy and energy efficiency standards are currently frozen until 2017 as a result of Senate Bill 310, passed last year. The law also weakened the criteria for meeting the standards and set up an Energy Mandates Study Committee to review the costs and benefits of the law.
The committee met and received testimony from a variety of witnesses from November 2014 through July 2015.
“I think that the work was very extensive and spread over a long period of time,” said Rep. Christina Hagan (R-Alliance). “We heard from a lot of viable witnesses.”
“There were some things that I learned,” Hagan continued, referring to a “cultural shift” in the demand for renewable and advanced energy. She also noted a visit to a combined heat and power facility at Kent State University that led to significant cost savings.
Such projects can go forward even without clean energy standards “where the economics are feasible,” Hagan stressed. “That’s the power of the free market. People should be able to decide what’s best.”
Hagan noted that various utilities have continued at least some of their energy efficiency programs, which have been found to save customers about $2 for every $1 spent on the programs. However, FirstEnergy has discontinued most of its programs.
“They obviously have made a decision that they felt was best for them,” based on the detailed economics of the company’s situation, Hagan said when asked about FirstEnergy and its utilities’ regulated monopoly for distribution services in their territories.
“I’m not in government to pass judgment, but to learn and realize what is happening” in the markets, Hagan added.
“We did have some representation from the renewable side” among the witnesses who provided testimony, noted Sen. Capri Cafaro (D-Hubbard). But overall, she said, “It seemed as if much of the testimony was one-sided.”
For example, while 12 of the 20 witnesses represented utilities and other industry groups (including wind and solar), only one – Bruce Weston of the Ohio Consumers’ Council — spoke on behalf of ratepayers. Environmental and other public interest groups were also largely excluded.
And academic experts and “think tank” representatives “talked more about the concerns surrounding having mandates and retaining the renewable portfolio standards,” Cafaro said. “It would have been helpful to have more of a balance of testimony that would provide insight into the potential economic benefits” from the standards.
“We haven’t necessarily had enough time to see the potential impact of what SB 221 [the version of Ohio’s clean energy standards passed in 2008] would have done” to benefit the state, Cafaro added. “I would like to see SB 221 able to be implemented in its initial form,” she said.
Michael Stinziano (D-Columbus) said he would give the committee hearings a “‘C’ for confidence, but not comprehensiveness.
“I thought we did not have the diversity of opinions and a robust discussion that brought anything new to the forefront,” Stinziano said.
“We did hear a little diversity, but there were key stakeholders not at the table — either by choice or they weren’t invited” to give testimony, Stinziano noted. For example, there was no detailed discussion of health benefits the state might forego if the standards did not resume.
In fact, witnesses testified before the full committee only by invitation.
“I am always concerned when we don’t have an open public forum and any opportunity for any public comments,” Stinziano noted.
A few other groups have provided documents to co-chairs Troy Balderson (R-Zanesville) and Kristina Roegner (R-Hudson). They include, for example, industry supporters of demand response and a group of environmental advocates.
“The chairs have let [such] documents get to us after the fact, but not during any public presentation where we all could ask questions,” Stinziano said.
Moreover, Stinziano said, the hearings did not address what levels of renewable energy and energy efficiency might be appropriate for the state other than those spelled out in current law.
Just a freeze?
For now, required reductions in electricity usage from energy efficiency remain at their 2014 levels of 4.2 percent, and the final goal of 22 percent has been extended until 2027.
Required portfolio standards for renewable energy also remain at the 2014 levels, which were 0.12 percent for solar energy and 2.5 percent for renewable energy.
As originally introduced, SB 310 would have permanently frozen the standards at their current levels unless lawmakers acted again. After Gov. John Kasich threatened to veto the bill, a May 2014 compromise provided that, barring any future legislative action, the law’s benchmarks would kick in again in 2017. That’s what the law now provides.
This past May, Balderson characterized SB 310 this past May as “just a freeze.” He was the primary sponsor of SB 310 in Ohio’s General Assembly.
His bill had support from utilities and various large industrial companies. In 2014, for example, Terri Flora of American Electric Power said SB 310 was a chance for the state “to simply hit the pause button as the legislature studies the issues surrounding the mandates.”
Similarly, Keith Lake of the Ohio Chamber of Commerce described SB 310 as “hitting the pause button and taking the time to consider the impact of Ohio’s energy mandates.”
Yet now it’s unclear whether a majority of the state’s lawmakers will let the standards play on.
Earlier this month, Ohio Sen. Bill Seitz (R-Cincinnati) told Columbus Business First that he doesn’t think lawmakers are ready to “resume our march up Mandate Mountain” and would prefer to see the freeze continue.
Seitz, who has likened clean energy standards to Stalinist policies, suggested a similar approach this past spring as a response to U.S. EPA’s Clean Power Plan.
Those rules, which were finalized this summer, call upon states to reduce power plant emissions of carbon dioxide, which is a greenhouse gas linked to climate change.
Both advocates and representatives from the U.S. EPA have said that renewable energy and energy efficiency can substantially reduce the cost for complying with those rules.
‘In the wrong direction’
“A freeze—or extending the freeze—is definitely a step in the wrong direction,” said Stinziano.
“Businesses tell you they want to know what the rules are so they can adapt and proceed accordingly,” Stinziano explained. “A freeze doesn’t provide that.”
“We know there’s an economic impact,” Stinziano added. “Ohio was a leader” in energy efficiency and renewable energy, but SB 310 “stymied that,” he said.
Stinziano and Rep. Jack Cera (D-Bellaire) issued a report earlier this month, citing additional reasons to resume the standards, including health benefits, consumer savings and job opportunities.
Moreover, any extension of the standards based on the Clean Power Plan would just be “kicking the can,” Stinziano said.
“The federal rules are the law of the land,” Stinziano explained. “I think people are grasping.”
“This is all happening under the umbrella of our governor running for president, and it delays having to make real decisions in that capacity as well,” he added.
In Stinziano’s view, any continuation of the “pause” would also achieve the same immediate effect for opponents of the clean energy standards, such as utilities, fossil fuel interests, and various large industrial users.
That effect is the absence of any obligation to increase renewable energy or energy efficiency beyond current levels.
“Extending the freeze continues to delay real implementation and has the effect of just eliminating them,” Stinziano said.
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