The legislature wants to make them voluntary.
Renewable energy is extremely popular with the American public, across partisan lines. The evidence is found not only in polls, but in tangible action at the state level: 29 states and Washington, DC, have passed some version of a renewable portfolio standard (RPS), which requires state utilities to get a minimum percentage of their power from renewables.
Despite many attempts from fossil fuel companies, big utilities, and conservative groups, no RPS put in place has ever been repealed.
The closest any state has come was in 2014, when Ohio Gov. John Kasich (R) signed a law suspending the state’s clean energy mandates for two years.
Now that two years is up. But the Ohio legislature has just passed a bill that would make the RPS voluntary, effectively extending the suspension, for two more years. The bill is on Kasich’s desk; he will either sign it into law or veto it soon.
Kasich has said he wants to end the suspension. "I think we should embrace these renewables," he told reporters on November 30. "We think these goals that were established for renewables, both solar and wind, can be met.” He added that “I just would hope the legislature will not have a headline that Ohio went backward on the environment.” However, he stopped short of saying he would veto the bill.
Now he’ll have to make that decision.
Last week, I told a story from Illinois about how state politics can work to balance competing interests and move clean energy forward. What’s unfolding in Ohio is the opposite: legislators backed by coal-heavy utilities and Koch money, attempting to protect fossil fuel incumbents in defiance of public opinion and the great preponderance of evidence.
The future of Ohio’s (manufacturing-heavy) clean energy industry is on the line. So is Kasich’s reputation as a moderate.
The history of Ohio’s beleaguered clean energy mandates
Let’s take a quick walk through the history.
1) Clean energy mandates get passed in 2008.
In 2008, under a Republican legislature and a Democratic governor (Ted Strickland), Ohio passed a bill that included an Alternative Energy Portfolio Standard (AEPS) and an Energy Efficiency Resource Standard (EERS).
The AEPS says Ohio’s utilities have to get 25 percent of their energy from “advanced” sources by 2025. Advanced includes nuclear, “clean coal,” and combined heat and power (CHP), among other things.
Half of that 25 percent (the 12.5 percent RPS) must come from renewable energy, and 0.5 percent must come from solar specifically. Half of the renewables must come from inside the state.
The EERS says utilities must reduce demand by 22 percent by 2025, relative to 2009 levels.
2) Clean energy mandates get suspended in 2014.
Fast forward to 2013, to an Ohio state senator named Bill Seitz (R-Cincinnati). Seitz is on the Board of Directors of the American Legislative Exchange Council (ALEC), a right-wing group that has waged a persistent, if almost entirely unsuccessful, war on state clean energy policy.
(You’ve probably heard about ALEC’s services — they provide “model policies” undoing progressive state initiatives, which Republican state legislators often put forward without so much as editing.)
In 2013, Seitz put forward a bill, SB 58, to scrap the state’s RPS altogether. It died in committee. Legislators worried about polls showing the RPS with 75 percent public support.
Republican leadership took the bill and softened it. Rather than killing the mandates, it would merely suspend them for two years while legislators study them (“until we figure out what’s going on,” as Trump says). Thus came SB 310, which established an Energy Mandates Study Committee (EMSC) in the Senate.
The Ohio legislature passed SB 310 in 2014 and Kasich — perhaps with his eye on an upcoming presidential bid — signed it.
(The same year, at the last minute, with no public hearings and virtually no debate, Ohio passed HB 483, which “tripled property line setbacks for [wind] turbines on commercial farms that did not already have permits.” It basically froze utility-scale wind development in the state. Seitz was behind that, too; he really hates wind.)
3) Republicans want to re-suspend the mandates in 2016.
The Republican-led EMSC launched an investigation that was, by all reports, ludicrously one-sided, focused on the perceived shortcomings and costs of wind and solar, with almost no testimony about their benefits.
The EMSC’s final report, issued in late September 2015, focused entirely on the costs of the mandates and ignored their benefits. Not surprisingly, the committee recommended suspending the mandates indefinitely. Kasich immediately characterized that policy as “unacceptable.”
In recent months, in the face of a threatened veto, Ohio Republicans have again softened their effort, pushing a bill that would make the mandates voluntary. (Despite the cosmetic differences, that’s functionally equivalent to extending the suspension.)
A Senate hearing on the bill drew 60 witnesses, all testifying in opposition. A House committee meeting drew 40.
On December 6, the Ohio House passed House Bill 554, which would not only make the clean energy mandates voluntary through 2020, but contained some extra goodies for the state’s big utilities, allowing them to reduce their efficiency compliances costs by … well, by doing nothing.
"This is not, and I repeat not, an extension of the two-year freeze," said the bill’s main sponsor, Ron Amstutz (R-Wooster). Except, it is.
The Ohio Senate softened the bill further, making the mandates optional for only two years. On the night of December 8, it passed its version of the bill on a vote of 18-13. On the morning of December 9, the House voted through the revised version, 55-34.
In addition to freezing the 2016 targets until 2018, the bill also eliminated the “advanced energy” part of the mandates, pushed all deadlines back two years, and removed the in-state requirements on the RPS.
The bills got mostly party-line support from Republicans, but not from enough Republicans to override a veto.
So the ball is in Kasich’s court now.
Utilities, fossil fuel companies, and Republican legislators in Ohio are … chummy
It is no big mystery who’s behind the effort to kill the Ohio RPS. It’s the same cast of characters trying to overturn mandates in nearby states.
The Energy and Policy Institute has been doing some great birddogging on this. It dug up disclosure forms and found that the following utilities and power companies engaged lobbyists in “active advocacy” on the legislation:
American Electric Power (AEP), Dayton Power & Light, Duke Energy, Dynegy, Exelon Generation, First Energy, NRG Energy, NextEra Energy Resources
These are big, investor-owned utilities that own (or have affiliates that own) big, old, slow baseload power plants that are threatened by efficiency and renewables.
Industry associations that lobbied for the legislation include:
Alliance for Energy Choice, American Petroleum Institute – Ohio, Industrial Energy Users of Ohio, Ohio Chamber of Commerce, Ohio Coal Association, Ohio Gas Association, Retail Energy Supply Association
And for an extra touch of class, lobbying was also done by oil giants ExxonMobil and Marathon, and by Murray Energy Corporation, a big coal company that supplies many of the aforementioned aging-giant power plants.
The Institute also filed public information requests for emails from state legislators during the development of the bill and uncovered a level of coziness that is, if not surprising, at least striking.
Remember that Energy Mandates Study Committee report? A month before it was released, Seitz emailed some fellow Republican legislators and 10 utility and fossil fuel lobbyists, saying “we should be meeting as a small group to figure out what that report is going to say.” He also emailed lobbyists earlier asking, “which portions of [a Michigan bill to repeal that state’s RPS] we should emulate.”
According to Ohio campaign finance data, the members of the EMSC have collectively received $830,000 from utilities and fossil fuel companies ($124,900 for Seitz alone). Seven of the 12 are also members of ALEC.
All that money seems to have, uh, educated Seitz about clean energy mandates. In 2008, he voted for them, along with a large majority of Ohio legislators. By 2013, he was comparing them to “Joseph Stalin’s five-year plan.”
Meanwhile, even as legislators were pushing to weaken support for renewable energy, the Public Utility Commission of Ohio (PUCO) was busy approving an expensive, ratepayer-funded bailout for seven coal plants and one nuclear plant owned by AEP and FirstEnergy (the same ones lobbying against the RPS).
The evidence for and against Ohio’s RPS
The EMSC report leaned almost entirely on a single study. It comes out of Utah State University’s Institute of Political Economy, which is one of the top recipients of Koch Foundation academic money (over $1 million total; see this article: “USU business school courts billionaire ideologue”).
(When ALEC was going after the RPS in North Carolina, Suffolk University’s Koch-funded Beacon Hill Institute served much the same role, cranking out studies to support the industry position.)
The report’s lead author, Randy Simmons, earned some notoriety last year when he wrote an anti-renewables op-ed for Newsweek and was less than fully forthcoming about his affiliations. Originally his bio read “Randy Simmons is professor of political economy at Utah State University.” Newsweek later updated it:
Editor’s note: The author of this piece, Randy Simmons, is the Charles G. Koch professor of political economy at Utah State University. He’s also a senior fellow at the Koch- and ExxonMobil-funded Property and Environment Research Center. These ties to the oil industry weren’t originally disclosed in this piece.
Anyway, regardless of the authors’ affiliations, the study is garbage, for reasons described here by Michael Goggins, senior director of research at the American Wind Energy Association (AWEA). It uses outdated cost assumptions for renewables and attributes poor state economic performance in 2008 to 2010 to RPSs passed just before the, uh, huge recession. See the post for more.
Other reports that support Seitz’s position:
Jonathan Lesser of Continental Economics: a report that counts all the costs of Ohio’s energy efficiency mandate and none of the benefits finds that … costs outweigh benefits. (The Ohio Manufacturers’ Association rebutted Lesser’s testimony in some detail.)
American Tradition Institute: an analysis of the mandates from 2011 so apocalyptic it must be seen to be believed.
And that’s about it, at least that I’ve been able to find.
On the other side, here is some evidence that might weigh in favor of Ohio’s RPS, moving from the specific to the general.
1) Reports that support an Ohio RPS
PUCO: a report on AEPS compliance in the year 2013 showed that it was substantially cheaper than initially estimated.
Tim Benedict, an economist with PUCO: an analysis found that the addition of renewable energy has reduced wholesale power prices across Ohio by about 0.5 percent, a modest number that’s expected to rise as the amount of renewables rises. (Seitz rushed to respond, “This is not an overall cost/benefit analysis, and should not be interpreted as such.”)
Ohio Advanced Energy Economy (OAEE) and the Center for Resilience at Ohio State University (OSU): an analysis showing that, from 2008 to 2012, Ohio’s RPS and EERS “have led to a 1.4 percent reduction in Ohio electricity bills,” “reduced electricity use by 2.6 percent and overall energy demand by 2 percent,” and “created over 3,200 Ohio jobs.” Seitz really hates this study. When Ted Ford of OAEE wrote him about it, he scrawled across the top of the paper, “more complete fabrications from people with zero credibility.”
Four environmental groups: an analysis of health benefits showing that reinstating the RPS would, by displacing coal generation, have the effect of “averting thousands of premature deaths, hospital admissions, asthma-related emergency room visits, and heart attacks; avoiding tens of thousands of asthma attacks; and saving hundreds of thousands of lost work days.
Environmental Entrepreneurs (E2): Prior to the freeze, the clean energy economy had grown to support 89,000 jobs in Ohio; since the freeze, growth in the sector has slowed to an anemic 1.5 percent, well below national wind and solar numbers.
Pew Charitable Trusts: a 2015 report showed that investment in clean energy manufacturing in Ohio surged after the RPS was passed in 2008 — and a huge drop-off in investment after the RPS was frozen. It also goes into some detail about the rich clean-energy manufacturing ecosystem in the state. (Ohio is No. 1 in the nation in wind manufacturing jobs.) It concludes that an “uncertain policy future … is jeopardizing Ohio’s leadership in the clean energy sector.” (Of the Pew report, Seitz said, “It is a fool’s errand to examine only the benefits of the state mandates without also examining their cost.” He prefers doing it the other way around.)
Environmental Law and Policy Center (ELPC): A November 2016 analysis identified more than 300 Ohio companies involved in the solar and wind supply chains — 207 in solar, 134 in wind, and 20 in both. These are mostly behind-the-scenes companies, not customer-facing, but they are an important part of Ohio’s economy and rely in part on supportive policy.
ICF International: a survey found that, as of 2012, alternative energy employed 31,000 in Ohio, over five times those employed by coal mining and coal-burning power plants (which account for a whopping 0.012 percent of Ohio’s employment).
American Council for an Energy-Efficient Economy (ACEEE): a 2013 analysis showed that implementing the EERS through 2020 “could save customers a total of almost $5.6 billion in avoided energy expenditures and reduced wholesale energy and capacity prices.” (Notorious anti-wind lobbyist Sam Randazzo called this one “garbage!”) ACEEE also has a separate report on the total energy efficiency potential in Ohio.
FirstEnergy: despite advocating to cut its efficiency programs in the wake of SB 310, the utility’s own PUCO filings show that those programs pay back double what they cost.
Public Opinion Strategies: a poll found that 62 percent Ohio Republicans (not just voters — Republicans) support the mandates. Eighty-seven percent support net metering; 85 percent support retail choice; 82 percent support utility efficiency programs. All these are counter to utility positions.
2) Reports that support clean energy in Ohio and the Midwest
World Resources Institute: an analysis of the Illinois power sector shows that “existing state policies and improved use of infrastructure could lower Illinois’ emissions 35 percent by 2020 (below 2011 emissions levels).”
PJM (the organization that runs the Midwestern electrical grid and power markets): a report on Clean Power Plan compliance showing that Midwestern states can save money by complying. (See also: PJM’s testimony to the EMSC, which is all about how efficiency lowers wholesale power prices and maintains reliability.)
Clean Jobs Midwest: the 2016 version of its annual Clean Jobs Midwest Survey says that 568,979 people are now employed in clean energy sectors across 12 Midwestern states. It also says “the region’s clean energy employers also project a growth rate of approximately 4.4% over the coming 12 months, for an additional 25,000 jobs,” as compared to “national average employment growth around 0.5 % per year over the next 10 years.”
3) Reports that support RPSs and EERSs
National Renewable Energy Laboratory (NREL): a comprehensive analysis showing that state RPSs have produced benefits at minimum three times their costs.
DBL Investors: a report showing that states with the most renewable energy have lower average electricity rates.
LBNL: comprehensive review of state energy efficiency programs finds that, yes, they save consumers money.
There are dozens more papers I could put in this section; suffice to say, there’s a reason no state but Ohio has ever suspended or reversed an RPS or EERS.
A Cleveland Plain Dealer columnist surveys this landscape and concludes that the debate is “heavy on opinions, light on research,” because ¯\_(ツ)_/¯.
Kasich in the spotlight
Republicans, newly empowered by Trump’s win and dominant at the state level, are only going to ramp up their attacks on clean energy. Michigan Republicans are going after their state’s clean energy standards as we speak.
They tell lots of stories about why they’re doing it. Sometimes they say it penalizes ratepayers. Sometimes they say mandates aren’t needed given “the looming omnipresence of this ridiculous U.S. EPA Clean Power Plan,” as Seitz put it. But of course, the Clean Power Plan is toast now — Trump is going to kill it. (To my knowledge, that has not changed any Republican’s attitude toward clean energy mandates.)
Sometimes they say they oppose mandates out of devotion to free markets. To wit:
State Sen. Bill Coley (R-Liberty Township) compared the requirement to provide a percentage of energy from renewable sources to forcing people to buy kale, which “tastes like plastic” in his view.
“Let’s let the marketplace work,” Coley said, wondering whether “kale mandates” would come next.
(If the comparison of renewable energy to kale doesn’t expose the culture-war roots of all of this, I don’t know what could.)
Coley’s plea to allow the marketplace to work is amusing, delivered at a time when his state’s big utilities, supported by Republicans like him, are receiving enormous bailouts for their uncompetitive power plants and are in the midst of pleading with regulators to scrap market competition altogether so they can keep the plants open.
What’s really going on is clear to everyone, though the conventions of journalism generally prevent reporters from saying so plainly. Big utilities and fossil fuel companies have effectively hired a set of Republican legislators at the state level to defend their profits and prerogatives.
Ohio can’t stop the evolution of electricity to a smarter, more flexible, more decentralized, and lower carbon system. The need for big old baseload power plants is eroding; they will continue to suffer on wholesale markets. States can save them for a few years with bailouts, and they can slow clean energy down by undercutting policy support for it, but in the end, that just allows other states to move forward faster and claim the jobs and health benefits of clean energy sooner.
If Kasich was serious about the moderation that he so ostentatiously displayed during the Republican primary contest, this is the time to show that it means something. Big utilities in Ohio want to slow and stymie a clean energy transition that is as inevitable as it is necessary.
Kasich shouldn’t let them.
Further reading
On this and all Midwest energy news, you must follow the aptly named Midwest Energy News.