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Economy and Business

Ohio Sen. Seitz next move may be to eliminate energy standards altogether
Energy bill promises to be back on the Ohio Legislature's agenda next year

Andy Chow
Seitz plans to revisit, and possibly try to eliminate, Ohio's renewable energy standards. Opponents say he'll cripple a burgeoning industry.
Courtesy of MARK URYCKI
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In The Region:

This year, the Statehouse saw an aggressive battle between Ohio’s top utilities and a variety of advocates in the debate over the state’s energy policies. Statehouse correspondent Andy Chow follows the evolution of a bill that saw its share of momentum swings over the past year.


LISTEN: 2013 was a year of big energy issues

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Maybe it didn’t get as much attention as some of the other hot-button topics like abortion and gun laws, but inside the Statehouse, the energy bill was one of the most contentious issues of 2013.

Just the rumor of a move to change Ohio’s energy efficiency policies at the end of 2012 set off a whirlwind of activity on Capitol Square.

Then in February, that rumor took the form of Senate Bill 58. At first the bill’s sponsor, Republican Sen. Bill Seitz of Cincinnati, called it a placeholder bill design to spur hearings and generate a review the policies and standards created in 2008.

FirstEnergy lobbies hard
Industry experts lined up to provide testimony, talking about the impacts of the current standards. One of the most vocal groups was Akron-based FirstEnergy, which has been calling on the state to change its energy policies.

FirstEnergy says the provisions from 2008 are outdated and warns that consumers will see more expensive electric bills if the state doesn’t make changes.

Who will pay more?
All sides acknowledge that the proposals in S.B. 58 are complex, but the question at the heart of the debate is fairly simple: Will the energy bill avoid or create higher costs for the ratepayer?

Doug Colafella, FirstEnergy’s spokesperson, says the proposed legislation makes three major changes to help Ohioans save on their electric bill.

He says it would change the way energy efficiency is counted, it would allow large industrial companies to opt out of programs if they create their own, and it would create a spending cap.

“Many of the opponents of this bill are very inaccurately suggesting that this bill is going to increase rates at the same time we have charged our customers over $700 million in less than five years for the compliance targets in this law.”

A windfall for the power company?
Opponents of the bill say the changes weaken Ohio’s renewable standards and efficiency policies. Consumer and advanced energy advocates say one of the most troubling changes would result in a windfall for top Ohio utilities such as FirstEnergy.

Scott Gerfen with the Office of the Ohio Consumers’ Counsel says an increased return of lost revenue and shared savings means the utilities are guaranteed to get more money and that money will come from Ohio consumers.

“Utilities want the Legislature to vote for a law that’s going to raise electric bills for Ohio families, farmers, businesses and manufacturers. That’s a bad idea.”

The consumers’ counsel says the average Ohio household could see as much as a $500 increase to their bills over a three-year period. But Colafella says the spending cap measure ensures that utilities can’t pad their own pockets with ratepayer money.

Along with the cost measures, the bill would also do away with something known as the “Buy Ohio” provision, which requires utilities to get at least 50 percent of their renewable energy from in-state. Similar laws around the country have been found unconstitutional, according to Sen. Seitz.

Let’s see if the standards work
Advanced energy advocates say it’s unfair to change the five-year-old policies and want state leaders to give the current standards more time to sink in. Seitz disagrees.

“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.”

Eliminate the standards altogether?
The bill had momentum going into the summer break, but that seemed to slow down after more groups came out in opposition, including the Ohio Manufacturers’ Association. The bill was scheduled for a vote twice but both meetings were cancelled and the legislation stalled in committee. Seitz, who is also the committee chairman, says he wanted to give his members more time to consider the proposed changes.

Now he has a new blueprint for pursuing policy changes in 2014. Seitz plans to continue working on S.B. 58, but he also wants to hold more meetings on another bill that would repeal Ohio’s efficiency standards altogether. The third prong to the senator’s plan is to explore a legal challenge to the Buy Ohio provision.

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