Ohio is poised to become the first state to freeze its utility requirements for renewable energy and energy efficiency, marking an important win in the Republican-led effort to dismantle state clean-energy mandates.
Gov. John Kasich (R) is planning to sign the rollback legislation by the Saturday deadline, a spokesperson told the Cleveland Plain Dealer. The move comes after more than two years of fierce debate by Ohio’s industries, businesses and lawmakers over whether the requirements harm or benefit the state economy.
The bill is the first measure to succeed out of more than four-dozen attempts by various states to eliminate or water down their Renewable Portfolio (RPS) targets. Roughly 30 states have such standards, which are largely credited with growing the nation’s renewable energy portfolio and stoking interest from private developers.
Opponents of RPS targets, however, argue that requiring utilities to source a portion of their supplies from renewables, like wind and solar power, distorts the free market and picks energy “winners and losers.” The American Legislative Exchange Council, a conservative policy group, has led the push by creating “model bills” that call for voluntary state renewables markets.
Ohio’s RPS law, which passed in 2008, requires the state’s utilities to get 25 percent of their electricity from renewables and alternative sources, including combined heat and power and fledgling carbon capture technologies, by 2025. Utilities also have to adopt energy-efficiency measures that lead to cumulative electricity savings of 22 percent by the same year.
Critics blame the RPS target for Ohio’s rising electricity rates and say the higher costs are causing businesses to cut jobs. Supporters—including large manufacturers like Honda of America and Whirlpool—argue that eliminating the RPS would only increase rates further while hamstringing the state’s burgeoning clean energy sector.
The new legislation will freeze the RPS requirements for two years, during which time a commission will study the targets, which will likely lead to a permanent reduction of both.
Rob Nichols, the Kasich spokesman, said the bill offers a compromise to both sides of the debate.
“Given the fact that there were those who wanted to end renewables entirely, and those who think we should never question or reassess an energy policy that was written before we even knew Ohio was rich in natural gas, we’re pretty confident that we’ve hit the sweet spot and are firmly in the sensible center,” Nichols said last week, Dayton Daily News reported.
Whether the Ohio decision can tip the balance in favor of RPS opponents in other states remains to be seen.
Ohio is “a unique circumstance,” Jim Kennerly, a senior policy analyst at the North Carolina Solar Center, which tracks state renewable policies, told International Business Times. Kennerly said he doesn’t think freeze or repeal efforts will succeed in many other states “because a lot of the key ingredients aren’t there.”
Kennerly noted that both chambers of the Ohio General Assembly and the governor’s office are all Republican, boosting the political will for measures that weaken government regulation. The state’s influential utility and industrial bases also have cause to oppose the mandates amid declining electricity demand and a shrinking manufacturing base.
“It takes several things being in place for there to be political support for removing those standards,” Kennerly said. “A lot of it is very state-specific.”
The debate over Ohio’s clean energy law is far from over, however. Proponents of Ohio’s clean energy law have vowed to fight the freeze. And, if legislators ultimately do decide to weaken the mandates in two years, they’ll have to send separate measures to the governor’s desk.
"In the short term, the future of clean energy in Ohio is very murky. In the longer term, the future of clean energy in Ohio is still very bright," Mark Shanahan, who was the energy adviser to former Gov. Ted Strickland (D), said Tuesday, the Plain Dealer reported.