Proposed Clean Energy ‘Freeze’ in Ohio: Debunking the Myths

by | May 19, 2014

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Two weeks ago, the Senate passed SB 310, the now-infamous “freeze” on Ohio’s clean energy standards.  But what proponents of the bill do not want Ohioans to know is that the version that made its way to the Senate floor bore little resemblance to the bill that was originally advertised by its sponsor (Sen. Troy Balderson) as “straightforward.”

In the last few weeks I’ve written about the impacts that a moratorium would have on Ohio’s clean energy economy, not the least of which would be the rapid erosion of the 25,000 clean tech jobs that these standards have brought to the State and the over $1B in electricity bill savings from efficiency programs. Media outlets statewide share these concerns, as do scores of Ohioans and businesses who have voiced their opposition in the press and to their elected officials.

But what ended up passing the Senate goes far beyond a freeze. In truth, SB 310 – harmful from the get-go – was hijacked by special interests less than 24 hours before it was voted out of the Senate Public Utilities Committee. Far from straightforward, now it more closely resembles SB 58, the utility goody bag that faltered last winter.  Yet, SB 310 is still being advertised by its proponents as a simple “gut check.”

That’s what they want you to think.

But here are the myths vs. the facts, for those who are still paying attention:

Myth: The “freeze” ends in 2017, thus it will not hurt Ohio’s clean energy economy.

FACT: Even a “pause” will create uncertainty in the market, sending a strong signal to Ohio’s clean energy businesses and investors that the State no longer values alternative energy and energy efficiency.

Even if Ohio’s standards are reinstated after a two-year hiatus, the damage will have already been done. The energy efficiency contractors, retailers, and renewable energy developers that have fortified Ohio’s economy over the last five years will no longer see the State as a reliable place to do business and will go elsewhere.

As ACEEE recently cautioned, Ohio should be careful to not follow the lead of Indiana – in which energy efficiency businesses began laying off workers within weeks of the legislature gutting their state efficiency standard.

Myth: We don’t know whether the clean energy standards are benefiting consumers.

FACT: The utilities themselves document the significant consumer benefits of the standards, such as the reported $1B in savings to date from energy efficiency programs, with an additional $4B projected over the next decade.

Publicly-available annual utility reports extol the benefits of efficiency programs for Ohioans.  For example, in its current portfolio plan, First Energy’s states: “Collectively, the proposed [energy efficiency] programs provide significant opportunities for energy and cost savings for virtually all of the Companies’ customers and provide the Companies with the best opportunity to meet or exceed their … requirements in a cost effective manner.”

Statewide, energy efficiency programs have provided Ohioans with a 2:1 return on their investment. Ohio’s investor-owned utilities are required by law to demonstrate that their programs are cost-effective, and they have done so in publicly filed documents each year the law has been in place. These results have been further bolstered by research done by the PUCO and PJM, demonstrating additional benefits via lowered wholesale energy prices.

Myth: SB 310 will protect Ohioans from skyrocketing energy costs.

FACT: SB 310 will actually increase costs to consumers and water down the benefits of energy efficiency – all while lining utilities’ pockets.

One such provision was added mere minutes before SB 310 was voted out of Committee – another stowaway from SB 58.  It would allow utilities to count several categories of energy reductions that have nothing to do with customer energy savings, such as compliance with federal energy standards and routine utility transmission and distribution projects (the latter of which they already earn a rate of return on). Not only would utilities get to count these savings that don’t provide customer-focused efficiency savings, they would also get to earn “shared savings” on these same projects – and consumers would foot the bill twice.

What’s worse, this provision encourages utilities to shift their focus from spending consumer $$ on well-designed programs that maximize return on investment, to efficiencies that have already been gained or would have been achieved anyway.

Myth: SB 310 is not a repeal, but simply a “pause” to study the impacts of the standards.

FACT: The language of SB 310 condemns the standards before the study committee has even started and indicates an intent to weaken them at a later date.

One of the most troubling developments in the wake of the Senate vote is how ardently SB 310’s proponents still insist that the bill remains a “straightforward” pause, and not a repeal. But the bill’s legislative intent language reveals a far different goal. While some of the strident language in the original substitute bill has been toned down, the as-passed version still condemns the standards even before the study committee has started its process.  SB 310 maintains that “it is the intent of the General Assembly to enact legislation in the future, after taking into account the recommendations of the Energy Mandates Study Committee, that will reduce the mandates…”

With this language, there can be no doubt that a weakened clean energy law was the Senate’s intent all along.

Possible House Vote This Week

These are just a few of the many myths and outright lies that the House Public Utilities Committee will be hearing this week as it continues to review SB 310.  The House has announced that it will hold one more session on SB 310 on Tuesday, May 20 and then may send it to a vote the following day.

These next few days, therefore, will be an important indicator of how much the Legislature still cares about the facts, and for that matter, the voters of Ohio.

This article originally appeared on NRDC’s Switchboard and was republished with permission from NRDC.

Samantha Williams is a staff attorney in Chicago with the Natural Resources Defense Council (NRDC).

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