Senate votes to freeze renewable energy legislation

By MARC KOVAC @ohiocapitalblog C-N Capital Bureau Published:

COLUMBUS -- The Ohio Senate has moved legislation that would freeze renewable energy and efficiency mandates for two years while a new study committee develops recommendations for future standards.

The vote of 21-12 on Senate Bill 310 capped months of debate and a day of behind-the-scenes haggling and committee hearings, with the final tally coming after midnight and the chamber recessing into Thursday awaiting the vote of one absent member.

The bill next heads to the Ohio House, where debate will continue on the prudence of the state's energy standards -- whether those mandates are driving up costs for businesses and consumers or having the intended effect of lowering energy use and prompting growth and innovation in related industries.

House Speaker Bill Batchelder, R-Medina, has already signaled his support of the bill.

"I am strongly supportive of the goals of Senate Bill 310 and look forward to working with my colleagues in the House to ensure this legislation is passed before the summer recess," he said in a released statement.

At issue is legislation passed by lawmakers and signed by Gov. Ted Strickland six years ago that required power companies to generate a certain percentage of their energy from renewable sources or efficiency initiatives. Utilities are allowed to pass the costs of meeting those standards onto their customers.

The legislation was passed at time when other states were seeing big increases in electric bills, and lawmakers moved to re-regulate an industry that they had deregulated in the late 1990s.

But lawmakers did not anticipate eastern Ohio's shale oil and gas industry, dropping energy costs and other factors, said Sen. Shannon Jones, R-Springboro, who voted in favor of the original legislation and who supported SB 310.

Given current trends, it only makes sense to step back and reconsider the law changes and their impact, she said.

"We are in a very different position in 2014 than we were in 2007 and 2008...," Jones said. "We are not eliminating these benchmarks, we're simply freezing them for a period of time, two years, to allow us the opportunity to settle in and understand the change in the marketplace, to understand the impacts these mandates are having on businesses and rate-payers."

Among other provisions, SB 310 would freeze renewable energy and efficiency benchmarks for the next two years and create a 13-member study committee that would have to offer recommendations for future energy-related law changes by September 2015.

Absent subsequent legislative action, the renewable energy and efficiency mandates in current law would restart in 2017.

Proponents say the standards in state law are higher than other states with comparable mandates on the books. Many other states do not have such requirements.

"Ohio manufacturers that are the backbone of our economy, that are competing in a global marketplace, have to face that global competition," said Sen. Bill Seitz, R-Cincinnati. "And I can assure you there's no mandates in India or China and no mandates in 21 states on renewables and no mandates remotely close to ours in most states on energy efficiency. So you're putting wind in the face, pardon the pun, of Timken and Alcoa and AK Steel and the major manufacturers in the state by imposing these mandate costs on them."

He added, "It isn't about renewable energy or energy efficiency. Both are very benign, wonderful things. But what this bill is about is mandates... whether you want to pay or not, you pay."

But opponents of SB 310 say the legislation will stifle growth in energy-related industries. Sen. Lou Gentile, D-Steubenville, cited one study showing some 3,200 jobs have been created as a result of the standards.

"It's brought a lot of investment to the state of Ohio," he said.

Opponents also are concerned that the two-year freeze will turn into a permanent removal of the mandates from state law.

"I just have a gut feeling, and I just have a sense that we're currently voting on a repeal that is disguised as a freeze," said Sen. Joe Schiavoni, D-Boardman.

Ted Ford, president and chief executive officer of Ohio Advanced Energy Economy, a coalition that supports the renewable and efficiency standards, added in a released statement, "The current standards are working. As a result of the standards, the renewable energy industry has invested $1.2 billion to provide clean energy to Ohioans, and Ohio's investor owned utilities have reported that energy efficiency programs carried out in 2009-2012 will yield over $4.1 billion in savings for electric utility customers over 10 years.

"Ohio's advanced energy industry is growing rapidly and currently consists of more than 400 advanced energy businesses that employ over 25,000 Ohioans. Substitute Senate Bill 310 sends a signal to the advanced energy industry to take their business elsewhere."

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