November 21, 2013

Ohio Wind Energy and Efficiency Mandates Could Disappear but Electric Rates Soar, Say Opponents of Pending Bill

The two-minute warning has sounded in the high-stakes energy game Ohio's Republican lawmakers are playing with the state rules requiring utilities to adopt energy efficiency programs and embrace wind and solar power.

At least three sets of major amendments were submitted late Friday to the Public Utilities Committee of the Ohio Senate, where Chairman William Seitz, a Cincinnati Republican, has been holding hearings on his bill, a proposal that opponents say would effectively abolish the five-year-old regulations.

Seitz had set Friday as the deadline for amendments.

In a notice to interested parties, he proposed to handle the amendments in a committee meeting next Wednesday and then possibly vote the bill out of committee.

On Friday, the Ohio Manufacturers Association, accompanied by an improbable coalition of 10 environmental, consumer and business groups proposed that Seitz instead gut his bill

In other words, the OMA-led amendments would eliminate the most controversial language in the Seitz bill that opponents have argued would cripple in-state wind and solar development and would give electric utilities big bonuses for running energy efficiency programs.

The coalition did make a peace gesture to the state's largest industries, some of which have been clamoring for the right to opt out of compulsory energy efficiency programs designed to help them install efficient equipment -- but pay higher delivery rates to fund the program. Some of the big industrial manufacturers have testified they don't need any help because they are already experts at efficiency.

The OMA-led coalition would give these big power customers the right to opt out --  provided they bid the power savings their own programs produce into regional power auctions. Such "negawatt" bids would help keep power prices low for everyone, the OMA reasons.

Under the OMA-coalition proposal, other companies and manufacturers that value the assistance to buy and install energy-efficient equipmentwould still be able to participate, using streamlined applications similar to what the Public Utilities Commission of Ohio has already put in place.

"These are proven tools," said Eric Burkland, president of the OMA, which represents both the largest and the smallest industries in the state.

"We have been working with a large number of groups to analyze this bill to find ways to improve it," he said of the amendments. "We offer these amendments in good faith to participate in the legislative process."

Other members of the OMA-led coalition include the Ohio Consumers' Counsel, the Lake Erie Energy Development Corp. (LEEDCo), the Ohio Hospital Association, and the Ohio Environmental Council.

Calling the amendment a "balanced solution," Ohio Consumers' Counsel Bruce Weston said the proposal offered by the coalition "is a good idea that asks the Senate to protect Ohio's continued use of energy efficiency as a way for Ohio consumers and businesses to save money on their electric bills" while addressing the concerns of the big industries.

Weston was critical of language in the Seitz bill that gives utilities new ways to profit from energy efficiency programs.

"The utilities' solution is to ask the legislature to vote for a new law that would increase the electric bills of millions of Ohio consumers and businesses," he said.

A second coalition including the Environmental Law and Policy Center, Policy Matters Ohio, Green Peace and Environmental Health Watch sent Seitz a carefully reasoned 11-page letter reviewing his bill's major impacts on consumers, utilities and the state's economy, concluding that the bill, as he has sponsored it, is too flawed to be repaired by amendments.

"The bill, taken as a whole, would prove so harmful to Ohioans and the state's economy that it is impossible to productively amend in this process," they concluded, urging Seitz to start over.

In a separate set of amendments, The American Wind Energy Association, represented by a powerful Columbus-based lobbying group, Government Edge, suggested a series of alternatives to the bill's current language that would allow electric utilities to satisfy renewable energy mandates with power generated anywhere, including power generated by old Canadian hydro projects.

In place of that, AWEA suggested out-of-state green power be actually "deliverable" to the state, meaning it would likely have to come from contiguous states. Because electricity flows where it can, it is impossible to know for certain that power purchased thousands of miles away is the power delivered in Ohio.

Also, the wind association suggested that instead of cutting the ground out from under the current law, the bill allow the state to "sunset" the current requirement in 2019 that half of all green power that utilities sell come from Ohio, or that it reduce the percentage in 2015 to 33 percent.

AWEA noted that there are seven wind farm projects that state regulators have already approved but await the outcome of the Seitz bill.

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