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Economy and Business

Revisiting Ohio's renewable energy policies could be costly
A Cincinnati Republican is pushing to change the standards implemented by state lawmakers

Andy Chow
Ohio is building both solar and wind farms, including the experimental wind project in Lake Erie. Backers say the state's renewable resource law is key.
Courtesy of JEFF ST. CLAIR
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In the last five years, significant investments have been made in Ohio to develop renewable energy. Advocates say this is because of the standards implemented by state lawmakers.

Statehouse correspondent Andy Chow says there’s now a proposal to change the standards. It’s a plan that some believe will negatively impact the market.

LISTEN: Andy Chow reports on the possibility of revisiting energy policies hurting investments

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The Ohio Senate has been holding long, comprehensive meetings to review the state’s renewable and efficient energy policies. The effort is led by Republican Sen.Bill Seitz, who says it’s time to take a look back at the standards and measures created in 2008 and find out if they are helping the state.

Advocates for wind energy arrived at the Statehouse Tuesday to send a clear message that these policies are indeed beneficial to Ohio.

“We’re meeting the renewable portfolio standard benchmarks on time. And we’re doing it in a very cost-effective manner," says Eric Thumma. He’s a director with Iberdrola Renewables, which operates the large Blue Creek Wind Farm in Van Wert and Paulding counties. He says the initiatives put in place by the Ohio General Assembly are effective. 

Why fix what isn't broken?
“There really isn’t anything for the folks in this building to change. Just stick with what’s working and we’ll keep building and bringing projects and investments to Ohio.”

A report released by the Ohio Advanced Energy Economy Institute backs up Thumma’s assessment and says there would be a huge hike in electric bills if the energy standards are gutted.

According to the report conducted by the Ohio State University’s Center for Resilience, Ohioans would pay $3.6 billion more if that were to happen.

Sen. Seitz says his bill will reform and not repeal the state’s standards. The major concern from Thumma and others in the renewable energy community deals with the proposed elimination of the “Buy Ohio” provision.

The provision says at least 50 percent of renewable energy in a portfolio must come from in-state.

Other provisions in other states haven't held up
Seitz says he’s proposing to take out this provision because of U.S. Supreme Court decisions against similar policies in other states.

Thumma argues that the “Buy Ohio” initiative drives investment and ensures that rate-payer money is going back to Ohio communities. He’s pleading with policymakers to avoid changing the provision..

“When a state puts in place a renewable energy standard like Ohio has done, they’re creating a market. And like all markets today, these markets have rules, every market in the U.S. has some set of rules," he says. "When you change those rules, you change the market dynamics. And so that’s a challenge for us since we’re asked to participate and compete in a market environment, we can only do that if we know that the rules are certain and stable.”

Even up
Seitz says this will even the playing field among investors in Ohio and those in other states.

“The only reason they would be hurt is because their prices are consistently higher than out-of-state wind and solar resources.So I guess they’re gonna have to get a little bit more cost-competitive. They enjoy super competitive profits because we have this requirements that insulates them against competition.”

Dayna Baird with the American Wind Energy Association says the state has already approved seven wind farm projects that are now in the pipeline for construction, and another five or six with applications pending. Baird says playing with the state’s renewable portfolio standards, also known as RPS, can impact the leaders of such projects.

“There have been some tinkering and changes around the edges nearly every year, so it certainly does make investment a more challenging possibility for those folks.”

'I'll eat my hat'
Seitz believes it’s unreasonable that the state wouldn't revisit such major policies.

“You show me a business that adopted a 20-year business plan in 2008 and never revises it over the next 20 years and I’ll eat my hat. This is what happens all the time in the real world. Plans—be they business plans or government plans—are constantly being revised to account for changes in circumstances that have occurred in that time.”

New bill language was officially  introduced during a Senate committee meeting today.

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