Ohio Republicans have introduced a dangerous new plan to freeze Ohio’s renewable energy and energy efficiency portfolio standards indefinitely.

GOP leadership is reportedly driving this proposal, with Senate President Keith Faber (R-Celina) leading the effort and Senator Troy Balderson (R-Zainesville) introducing the legislation, SB 310, Friday morning. SB 310 calls for an immediate freeze on efficiency and renewable energy standards at their current 2014 levels and for the creation of an “Energy Mandates Study Committee” to review existing law.

As a refresher, Governor Strickland signed Substitute Senate Bill 221 (SB 221) into law on May 1, 2008, making Ohio one of 29 states (plus DC) in the country to establish energy efficiency resource standards (EERS). The bill mandates that the state’s investor-owned utilities (AEP, Dayton Power & Light, Duke Energy, and FirstEnergy) reduce their energy consumption by 22.2% by 2025. This mandate is broken down into yearly increments, which gradually increase over time. The bill also implements a renewable portfolio standard (RPS), requiring utilities to generate at least 25% of their electricity from advanced energy sources by 2025.

SB 221 EE Goals

While the policy has becoming increasingly partisan, there was nothing controversial about SB 221 in the spring of 2008. The bill passed the Senate unanimously, with 32-0 votes.   It passed the House with a vote of 93-1 (with a 94-0 vote on amendments). There are still 23 GOP legislators in the Statehouse today who voted for the bill, including Senator Faber and hardline SB 221 opponent Senator Bill Seitz (R-Cincinnati).

Senator Faber told the Dispatch that his caucus wants to “put procedures in place that are based on evidence and science.” He also claimed that Ohio has “spent $1.1 billion since 2009 on energy efficiency” and that he is “not quite sure what we’ve gotten out of it.”

I’m sure the Senate President would be interested to know that all credible “evidence and science” suggests SB 310 is a terrible idea for Ohio’s economy, environment, and public health. Just because Senator Faber doesn’t know what Ohio has gotten in return for its investments doesn’t mean that the rest of us are equally oblivious.

In fact, there is ample evidence that SB 221 is working as planned. A 2009 analysis of energy efficiency mandates in 14 states found that, on average, every $1 invested generates at least $3 in savings for consumers. Ohio has followed that trend, as customers of the big four utilities saved $1.70-$4.20 (PDF) for every dollar invested in efficiency in 2011. Moreover, economists from the Public Utilities Commission (PUCO) concluded that renewable energy has already lowered electricity prices by 0.51%.

But it doesn’t stop there. According to a 2013 report (PDF) from economists at Ohio State, SB 221 has lowered electricity use and overall energy demand by 2.6% and 2%, respectively. Through the end of 2012, the law directly led to a cumulative savings of at least 5 million megawatt hours (MWh), more than the combined annual energy use of all households in Cincinnati, Cleveland, and Dayton combined.

These savings will only grow over time. The American Council for an Energy-Efficient Economy projects that Ohio can reduce its total electricity consumption by 64 million MWh through 2025, which is more energy than all households in the state use in a year. Such reductions would save ratepayers nearly $19 billion on their electricity bills.

SB 221 has also helped drive the steady growth of Ohio’s energy efficiency and renewable energy sectors. In 2007, there was less than 9 MW of combined wind and solar energy in the entire state. Last October, Environment Ohio reported that Ohio had 429 MW of wind and 95 MW of installed solar capacity, a 58-fold increase.

OH renewables capacity

The growth of these industries has been a boon for our economy. It sparked more than $660 million in public and private investment in 2012 alone. The OSU study estimates that SB 221 has generated at least 3,200 jobs since 2009. Ohio is now home to more wind-related manufacturing plants than any other state, while employment in the solar industry grew by 31% last year. Additionally, the Midwest Energy Efficiency Alliance calculates that the EERS alone could create more than 49,000 jobs by 2027.

The Blue Creek Wand Farm, which produces 304 MW of clean energy in Van Wert and Paulding counties, would never have occurred in Ohio without SB 221. As the project developer told Environment Ohio,

“Early development plans for the Blue Creek Wind Farm placed it just inside the Indiana border. But passage of SB 221 in 2008 caused us to shift our plans a few miles to the east and develop the project in Ohio.”

In other words, if Senators Faber and Balderson had their way, these counties would have to forego the project’s 180 jobs and $2.8 million in annual tax revenues.

EE jobs created

Lastly, SB 221 has benefited public health. In 2007, Ohio got 85% of its electricity from coal, the dirtiest of all fossil fuels. This dependence on coal has taken a serious toll. Coal-fired power plants cause 13,200 premature deaths, 20,400 heart attacks, and 217,600 asthma attacks each year. Ohio ranked 2nd in 2010 for in coal-related mortality risk, while Cleveland, Cincinnati, and Columbus were all in the top 12 among metro areas.

Thanks in large part to SB 221, the share of Ohio’s electricity generated by coal has fallen by 20% in just 5 years, improving the quality of our air and water. And this does not even touch upon climate change, though the bill has also reduced greenhouse gas emissions. This legislation is not just saving us money; it’s saving people’s lives as well.

Over the next several weeks, you will hear two main claims from SB 310 proponents. First, they will say that fracking has drastically altered Ohio’s energy landscape. Secondly, they will claim that SB 221 is too costly and will only serve to raise your energy bills. Neither is true.

First, the OSU study considered the impact of the growth of shale gas, finding that “energy prices and expenditures are not expected to change significantly when substituting gas for goal.” Furthermore, while the fuel cost for wind and solar energy remains fixed at zero, natural gas prices are projected to increase significantly in coming years.

And secondly, the Ohio revised code already stipulates that all utility energy efficiency programs must pass a cost-benefit analysis, ensuring they provide a net benefit to consumers. As the Ohio Consumers Council noted (PDF) in testimony last April,

“Utilities’ energy efficiency program portfolios must pass an economic cost-benefit test. This test ensures that the cost of energy efficiency…is less than what it would otherwise cost to generate and deliver that electricity.”

Senator Faber made it clear that he hopes to rush this bill through the legislature and have it on the Governor’s desk before the May recess. The GOP is counting on the idea that you aren’t paying attention to this issue or that you will buy into the misinformation they are spreading. The opponents of SB 221 are not looking out for the interests of Ohioans. They are simply defending the economic interests of the fossil fuel industry and electric utilities. In fact, SB 310 sounds an awful lot like a bill that FirstEnergy tried to force through the legislature in 2011.

The Ohio GOP is not targeting SB 221 because it has failed to work; they’re targeting it precisely because it has worked so well. In order to defend the well-being of economy, environment, and the people of our state, Ohioans need to protect SB 221.

 

Evangelize!
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  • Retrofuturistic

    The Christian GOP will deregulate anything for money. Anything. Even the food we feed to babies, the air we breathe, or the water we drink. What we need is for the populace to realize that “deregulation” (“small government”) means taking away rules that were imposed 1) to keep people from being robbed and 2) to protect their health.

  • Mark Shanahan

    The article is right on target. Two details:
    1. The House vote on SB221 was 93-1 (the 94-0 vote was on amendments).
    2. It is an overstatement to claim SB221 “in large part” contributed to the reduction of reliance upon coal. Over the years to 2025 that probably would be true but the backgrounder linked to the claim actually demonstrates that the largest contributor by far is the increase in natural gas use. And the great recession made a big difference as well.

    Bottom line: SB221 only passed because of the broad coalition that worked hard for it and that’s the only thing that will protect it!

  • Think.

    In one year, Ohio’s ALEC members have evolved from REPEALING to DIMINISHING to FREEZING an excellent law that saves us all money, and we keep telling them, “Don’t do it!” Won’t they ever give up?
    NO- not unless companies like FirstEnergy start caring more about their customers than their sky high profits.

  • nedford

    Don’t dignify SB 310 as a functional attack on the standards. It is an inept swipe at best. Although styled as a freeze, the bill authors don’t understand how the law works today, and wrote a proposal which would prevent any new renewables or any new efficiency – not just holding things at the present level.

    Because the renewable standard is implemented by the generators, and through the purchase and “retirement” of renewable energy credits (REC’s), SB 310 would hold the level of renewables steady, and keep all the projects which have been built to date in business, just preventing any new renewables from being built to comply with the existing standard which increases irregularly (the standard would jump from one half percent of total sales per year to one percent in 2015).

    But the efficiency standard, which is creating over $900 million in savings per year at a cost of around $165 million per year operates differently. It installs technology each year which has a lifetime ranging from several years to several decades, with an average lifetime of 12 – 14 years. The wording of SB 310 will kill this tremendous economic boon to Ohio citizens and businesses. It won’t just stop it at today’s level of activity, it will terminate the programs.

    It makes a little bit of sense for the “study” that SB 310 proposes to be conducted. It would make a lot more sense if the Ohio legislature would call the PUCO onto the carpet and make them provide clear and coherent reporting on the cost and savings produced by both efficiency and renewables to date. The PUCO has bent over backwards to obscure the simple fact that these standards are saving Ohio electric customers billions of dollars, and can save many billions more.

    The renewable standards are creating investments, not only in turbines and other technologies, but in the factories to build them. The 2011 renewable program cost less than $45 million (Ohio spent $13.9 billion on electricity in 2011).

    The efficiency standards however are saving electricity at an average cost of 1.7 cents per KWh, which is about 20% of the retail price of electricity. They also eliminate the need for new power plants, which roughly doubles the value of the savings. More important, the direct savings go to the people or businesses who participate in the programs, but the avoided capacity saves everyone money, even the foolish people who are trying to undermine the standards.

    The struggle over Ohio’s efficiency and renewable standards is a fight, no question. But it is not a dignified discussion based on evidence and real concerns. Rather it is a crass fight instigated by special interests and promoted by public officials who have not taken the time to figure out what the real stakes are.

    If you want to know what is really going on here, ask your elected officials to get the PUCO to compare the cost of special contracts and “reasonable arrangements” to the cost of efficiency and renewables. I guarantee that if this information becomes public, the entire fuss about the efficiency and renewables standards will vaporize. In a heartbeat.

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