Ohio poised to become first state to freeze renewable energy standard

Source: Nathanael Massey, E&E reporter • Posted: Monday, June 16, 2014

Ohio Gov. John Kasich (R) is expected to sign a bill into law this weekend freezing his state’s renewable energy standard (RES) for two years, marking a victory for conservative state legislators and some industries that have opposed the policies.

While the bill (S.B. 310) would not eliminate the RES, it would put the brakes on rules that mandate annual energy efficiency upgrades and encourage the growth of renewable energy. Provisions favoring in-state generation and a carve-out for solar energy would be permanently scrapped.

It will be the first time any of the 29 states with an RES or similar program has acted to put those laws on hold.

While the bill passed the Ohio House and Senate by wide margins, opposition from environmental groups, the renewable energy sector and a number of major industries has been strong. The RES remains popular among the public, as well, according to at least one poll.

And the RES has the support of some legislators, like state Rep. Debbie Phillips (D). In a statement made shortly after casting her vote against the bill in the House of Representatives, she said that the law would take Ohio backward.

“First, S.B. 310 has the potential to raise rates for customers, second, it would hurt a fast-growing industry in Ohio, and finally, it would move us in the wrong direction in terms of addressing climate change,” she said.

Kasich’s office did not immediately return a request for comment.

Surprisingly durable

At the same time, some advocates of renewable energy point to the limited success of S.B. 310 as evidence of the ongoing durability of renewable energy standards.

“Originally, the opposition [to the RES] was pushing to have it repealed entirely,” said Kyle Aarons, a senior fellow at the nonpartisan Center for Climate and Energy Solutions. “Governor Kasich was actually a driving force in stopping that push and of converting it to a weaker bill that only froze the renewables target.”

“Every year, we hear about how there’s a viable push in some state’s legislature to roll back [standards for renewables], and they’ve all been fought back until now,” he added.

First Energy Corp. has been pushing for a repeal of the clean energy standards for years, and this time around found some allies among the state’s Republican-dominated House and Senate, said Samantha Williams, a staff attorney with the Natural Resources Defense Council.

S.B. 310 shares a similar tenor with model legislation crafted by the American Legislative Exchange Council, which is made up of state lawmakers and works on a wide array of conservative issues. State Sen. Troy Balderson (R), who authored and introduced the bill to the Ohio Senate, served on ALEC’s Energy, Environment and Agriculture Task Force in 2011.

Looking for stability

Ohio has seen significant renewable energy development under its RES and has about 500 megawatts of installed capacity in operation, said Trish Demeter, managing director of energy and clean air programs at the Ohio Environmental Council. Another 900 MW of capacity is due for approval by the Ohio Power Siting Board, she said.

Thanks, in part, to Ohio’s strong steel industry, the state also leads the nation in the manufacture of wind turbine components, with 62 supply chain companies.

But with S.B. 310 on the horizon, much of that growth could skid to a halt.

“If you demonstrate that the state Legislature is hostile to renewables, that’s going to introduce a lot of uncertainty into those marketplaces,” Demeter said.

That sentiment was echoed in a letter to Kasich from more than 70 manufacturers and organizations — including Honda and Whirlpool Inc. — asking the governor to veto S.B. 310.

“Freezing the standards for two years creates a start-stop effect that will confuse the marketplace, disrupt investment and reduce energy savings for customers during this period,” the letter states. “This negative effect of the freeze will persist beyond the two years. We expect the result will be higher electric bills and less investment.”

And S.B. 310 isn’t the only piece of legislation moving through the Ohio state government that could challenge renewables in the future. An amendment added to the House budget bill — H.B. 483 — would greatly increase the distance between wind turbines and private property, constricting the amount of available land on which operators can site projects.