Ohio Environmental Law Blog : Ohio Environmental Lawyer & Attorney : Joseph Koncelik : Frantz Ward Law Firm : Environmental Regulation, Land Use, Compliance : Cleveland, Ohio

"If you build it they will come..." is the old saying from the movie Field of Dreams.  It also could be used to sum up Ohio's energy policy toward growing green jobs. 

Policymakers believed using grant funds and passage of a renewable energy portfolio standard (RPS) would kick start demand for renewable energy in the State.  If demand for solar, biomass and wind projects significantly increased, then manufacturers would be more likely to locate in the State.  

Governor Strickland was a strong believer in generating demand through government programs.  Governor Kasich and the Republican controlled legislature are less convinced.  September 21st and 22nd, Governor Kasich is convening a energy summit to help formulate his Administration's energy policy. With Ohio's renewable energy policy at a cross-roads, what are the results from the "if you build it they will come" energy policy? 

Ohio's Advanced Energy Fund Comes to an End

Ohio's Advanced Energy Fund was created to provides loans and grants to help overcome the initial cost barriers to commercial and residential renewable energy projects.  The Fund was paid for using a 9  cent per month fee on all Oho electric utility customers.  Residential, commercial and industrial customers paid the same amount.  Total fees in a year whether you owned a factor or a house was $1.08.

According to a July 16th Plain Dealer Article discussing the end of Ohio Advanced Energy Fund, the Legislature's decision to discontinue the program will reduce demand for renewable energy products like solar arrays and wind turbines at at time Ohio's clean energy economy is seeing real growth.

The Advanced Energy Fund, managed by the Ohio Department of Development, has awarded about $44.6 million in grants since Dec. 31, 2005, to nearly 700 projects, more than 400 of them solar projects with a total generating capacity of more than 9.5 megawatts (9.5 million watts).

The awards went not only for solar power arrays, but also for solar heating systems, more than 150 wind turbine systems and more than 60 energy efficiency projects.

The grants, according to a Plain Dealer analysis of a current report obtained from the state, have gone to more than 300 residential projects, about 180 commercial businesses, nearly 70 industrial projects, about 10 farms and about 70 institutions such as schools, colleges, churches and foundations.

Without the grants, making the financing work on these renewable energy projects becomes much more difficult.  Project developers will largely resort to Power Purchase Agreements (PPAs) that typically involve fairly complex arrangements between the property owner, the developer and a corporation that can utilize federal tax incentives. 

The concern is the more complicated financing will mean less projects.  With less demand, the fear is Ohio will be less attractive to renewable energy manufacturers.  One reason the grant program was ended was because lawmakers believed it was no longer necessary now that Ohio enacted an RPS.

Ohio' Renewable and Advanced Energy Portfolio Standard

With the passage of Senate Bill 221 in 2008, Ohio became one of the 36 states to mandate a percentage of the State's energy generation come from renewable or advanced energy resources.  The law required utilities to secure a portion of their electricity supplies from these alternative resources.

By the year 2025, 25% of the electricity sold by each utility within Ohio must be generated from alternative energy sources. At least 12.5% must be generated from renewable energy resources, including wind, hydro, biomass and at least 0.5% solar. The remainder can be generated from advanced energy resources, including nuclear, clean coal and certain types of fuel cells. In addition, at least one half of the renewable energy used must be generated at facilities located in Ohio.

All utilities must meet annual renewable and solar energy benchmarks that increase as a percentage of electric supply each year.  Here are those benchmarks for the first five years of the standard.

Ohio's RPS was seen as the way to significantly pump up demand in the State for renewable energy projects.  We are only part way through year three of the RPS.  The RPS contains a modest glide path upward toward the 12.5% mandate.  At this early stage utilities are under only very modest requirements in terms of securing renewable energy generation.

Renewable Energy Projects Rise But What About "Green" Jobs?

So has Ohio's Advanced Energy Fund or the RPS grown Ohio's clean energy economy?

Last week it was announced that Ohio was second only to Oregon in manufacture of solar panels.  Ohio has enjoyed strong growth in solar equipment manufacturing.  This from the article appearing in the Toledo Blade:

The Solar Energy Industries Association of Washington says Ohio produced 66 megawatts of photovoltaic modules in the first quarter of 2011, up 50 percent from 44 megawatts of solar modules produced in the state during the first quarter of 2010.

Last week's announcement would certainly seem to suggest the Fund and/or RPS with the solar carve out was having its intended effect of driving up demand and bringing jobs to the State. But was last week's announcement a result of national demand or Ohio demand for solar panels? 

A more comprehensive analysis of Ohio's green energy job generation by the Brookings Institute paints a complicated picture of Ohio's clean energy economy.  According to figures compiled for Ohio, while the number of renewable energy projects in the State is way up, the State's performance in terms of clean energy job growth appears to be mixed.

On the positive side, Ohio ranks 6th in the country in total clean energy related jobs with a total of 105,306.

Ohio also ranked 12th in total clean energy jobs added between 2003-2010.

However, the graph shown to the left indicates Ohio's clean energy job growth has lagged the rate of growth in U.S.  The sector has only grown 2.5% annually which means Ohio ranks 38th.

It is important to note that Ohio's RPS standard only kicked in during 2009.  This is far too little time to determine what the impact of Ohio's RPS has been on growing Ohio's green energy economy. 

The question will be whether the Kasich Administration and Republican's are willing to keep the RPS standards in place despite mounting resistance from utilities.  Some Republican's believe that RPS mandates drive up electricity prices which hurts others sectors of Ohio's economy.  With Ohio's clean energy sector only making up 2% of the total jobs in the State will the sector and its allies have enough political muscle to keep the standards in place? 

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Governor John Kasich has not revealed his true feeling regarding the Renewable Energy Portfolio (called the Advanced Energy Portfolio Standard in Ohio) which mandates a certain percentage of electricity should be generated from renewable sources like solar, wind, biomass and others.  Ohio's RPS was instituted as part of Governor Strickland's major energy legislation- S.B. 221.

While the Governor has not affirmatively announced a position, there appears growing sentiment he may be cool to the idea of energy generation mandates.  He recently announced an energy summit with Battelle in Columbus. The Summit will be held on September 21st ad 22nd and will be called "Ohio Governor's 21st Century Energy & Economic Development Summit." Leaders from energy, business, education, government and economic development have all been asked to participate.

However, his comments in announcing the summit suggest he believes major reform is needed and perhaps SB 221 needs review.

"Right now, Ohio essentially has no energy policy, but at the same time energy costs are major factors in the success of every sector of our economy, especially manufacturing and agriculture," said Kasich, as reported in The (Cleveland) Plain Dealer.

Reasons to Support RPS

Those in favor of the RPS say its a job creator by supporting green energy and suppliers to green energy development companies.  They also point to Ohio's heavy reliance on coal power- nearly 90% of generation.  While cost of baseload coal may be cheaper than renewable sources, the difference is shrinking due to advances in green technology and more and more regulation on coal.

The regulatory trend line for coal does nothing but continue to point upward.  With each new regulation the cost of coal power continues to climb.  Here is examples of regulations recently issued by EPA affecting coal:

• Rule on toxic emissions from power plants
• Toxic standards from industrial boilers
• Clean Air Transport Rule for coal fired power plants
• Revisions to the NAAQS, including a potential tightening of the ozone standard in August
• Potential regulation of coal ash (EPA seeking comments)
• Soon to be proposed cooling water intake structures rule
• New Source Review Enforcement Cases (Includes recent TVA settlement)
• EPA existing ad future greenhouse gas regulations

A shift away from Ohio's heavy reliance on coal will takes years to accomplish.  Supporters of S.B. 221 argue the RPS puts Ohio on a steady path to diversify its portfolio.

Opponents of RPS

Those who oppose RPS mandates argue it drives up energy prices by forcing utilities to purchase more expensive renewable energy.  As energy prices escalate, they argue, companies face higher operating costs.

The Debate Has Already Commenced

Supporters of S.B. 221 and the RPS are already starting to make their voices heard.  Perhaps they are anticipating a potential assault on Ohio's fledgling RPS.  

"Since inception of the energy law, over 1,700 renewable energy projects have been approved, including over 1,000 MW of wind power - enough energy to power over 300,000 homes." Guest Column Larry Feist is Program Chair in Electro-Mechanical Engineering Technology and Power Systems Engineering Technology at Cincinnati State Technical and Community College.  (Click here to read Cincinnati Enquirer Article)

Other states have already made the decision to increase their green energy mandates. Governor Jerry Brown signed into law Special Senate Bill 2, raising California's Renewable Portfolio Standard (RPS) from 20% to 33% by 2020.

Governor Kasich's budget slashed funding for renewable energy projects by 38% causing some in the industry to question his support going forward.  This from a Business First article:

The president of SolarVision LLC in Westerville said alternative power sources, such as wind and solar, take a backseat to drilling for oil and natural gas when he hears the governor talk about energy in the state. Kasich often mentions the promising potential for oil and natural gas wells in eastern Ohio where new drilling methods have opened up the huge Marcellus and Utica shale formations for development.

The debate in Ohio appears to be just heating up.  One thing is certain, businesses don't like uncertainty.  As long as the possibility that S.B. 221 and the Ohio RPS may be repealed or revamped, it creates uncertainty which creates head winds for projects moving forward. 

As the debate over the budget ends in July, there is no doubt that energy policy will once again take center stage especially with rising commodity prices.

(Photo: Great Valley Center Image Bank- Everystockphoto.com)

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With about ten days until election day races around the country are getting more heated.  Ohio's race for Governor is a study in contrasts on many issues.  Energy policy is certainly one of them.

Governor Strickland has pushed the development of advanced energy projects aggressively during his tenure.  Through passage of Senate Bill 221, he created the states renewable portfolio standard (RPS) mandating 12.5% of the State's energy come from renewable sources. 

He also created grant programs that sought to foster renewable energy projects in the State, such as the Advanced Energy Fund. According to the Ohio Department of Development's webpage the Advanced Energy Fund has made more than $41.9 million in investment in nearly 400 advanced energy projects.  The Fund is set to expire at the end of this year.

Congressman Kasich has built a solid lead in the polls.  One of his more creative proposals is to do away with the Ohio Department of Development as it is currently constructed.  He wants to transform the Agency into a non-profit organization with corporate board members. 

How will his proposal impact the development of advanced energy in the State?  It may depend upon the membership of the board.  The business community has some deep divisions when it comes to advanced energy.  Those same divisions appear between the candidates.

Kasich has expressed concern with renewable mandates and subsidies.  In a September Plain Dealer article this is how his spokesperson described his stance:

Strickland said the Republican would consider repealing an Ohio policy requiring that 12.5 percent of the power sold in Ohio come from renewable technologies by 2025.

The Kasich campaign said the governor's portrayal of Kasich's stance is inaccurate.

"John does not oppose the renewable energy standard and would not seek to repeal it," Kasich spokesman Rob Nichols said in an e-mail.

Kasich recently questioned the cost of the energy standard in an interview with the Dayton Daily News. He said he disagreed with the mandate if it increases consumers' utility bills.

Manufacturers who are deeply concerned about rising electricity prices in Ohio like Kasich's stance- go for the lowest cost alternative. Renewable energy manufacturers and companies that supply parts to those project may have a different perspective.

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A few weeks back I was contacted by the Cleveland Council on World Affairs (CCWA) to meet with a small delegation of representatives from Serbia who were interested in learning about environmental regulations, specifically those that relate to solid waste and/or recycling. While I was to be interviewed by the delegation members, I think I learned much more even though I wasn't asking the questions.  Here is a bit of background on the CCWA from their e-mail invitation:

The Cleveland Council on World Affairs (CCWA) hosts international leaders from all over the world year-round. Each year the CCWA hosts over 400 foreign nationals to meet and confer with their professional counterparts and to experience America firsthand. The visitors, who are selected by American Foreign Service Officers and U.S. Embassies overseas, are current or potential leaders in government, politics, the media, education, the arts, business and other fields. This program is sponsored and funded by the United States Agency for International Development (USAID)

Members of the delegation worked in the following areas:

• Journalist reporting on environmental issues
• Manager of an electronic waste recycler
• Member of a trade association for chemical manufacturers
• Manager for a public utility company
• Members of Environmental Groups
• Local Government
• Green business consultant
• Small business owner with recycling operation

What jumps out at me from the list above is that you have the same cross-section of organizations and individuals involved in environmental policy in the U.S.  Each individual is interested in representing their own constituents, business or advancing their own environmental principles. 

During the exchange I was asked to describe various regulatory challenges faced by businesses.  I was also asked, generally, about general attitudes of citizens toward protecting the environment or environmental issues.  Here are a few interesting observations or conclusions I made from the meeting:

1. Management of Electronic Waste-  The delegation was interested to learn that there were no mandates requiring individuals or businesses to recycle electronic waste in Ohio.  I was pressed on this point several times by members of the delegation.  They thought it was interesting that any citizen could carry his old TV out to the corner to be thrown away in a landfill.   Here is Ohio EPA guidance encouraging recycling of electronic waste. 
2. Used Tires-  While I think elimination of used tire piles is one of the biggest environmental success stories in the State of Ohio, the delegation provided a different perspective.  The laughed and smirked when told that an individual was allowed to accumulate 23 million tires on their property (Kirby Tire Pile).  For a country known for its sophisticated (if not overly complex) environmental regulations, it is somewhat odd this slipped through the cracks.  As a result, Ohio was forced to enact a new tax on tires and it took nine years to clean up the Kirby Tire Pile.
3. Renewable Portfolio Standards-  I was asked to provide some pretty detailed information regarding Ohio's Advanced Energy Portfolio Standard, including use of alternative compliance payments and renewable energy credits (RECs).  I was told that Serbia was working toward a RPS standard.  I thought it was interesting that a small European country was developing a very sophisticated energy program.
4. Jobs and the Environment-  I was asked to comment on general attitude of the public on environmental issues.  Some were interested in understanding how those attitude vary depending on what state you called home.  Overall, there seemed to be general understanding among the delegation of the interplay between the economy and environmental regulation which challenged my perception those debates were less heated in Europe than in the U.S.  Just like in the U.S., I got the feeling there was a wide range of opinions within the room.  Those opinions can change with time as well.  As noted in CNN recent poll on attitudes of Americans towards the root cause of global warming.

Overall, some of my own perceptions or paradigms regarding environmental regulation were challenged.  It usually takes someone or a group of people from the outside to get you to re-examine your own perceptions.  I found it very enlightening even though I didn't get to ask a single question. 

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The Sustainable Cleveland 2019 summit was unlike any other conference or summit I had attended.  I have been to plenty where the goal was simply to raise awareness-  Typically a parade of talking heads followed up by urgent pleas to do something in the future. 

The Cleveland Summit was much different.  It took some 700 attendees who represented a cross-section of the community and put them to work on development of an strategic plan to build green jobs in Northeast Ohio. 

The process used was called "Appreciative Inquiry" (AI) which was developed by Professor Cooperrider at Case Western Reserve University.  AI has been used by businesses and even the United Nations.  AI's basic concept is that small groups put limits on development of a strategic plans. For that reason it is much better to tap into the knowledge of a large group.   

I have to say I was skeptical of the process going in.  But I was continually amazed at the number of talented people in my working groups that represented a cross-section of the community.  Here are some examples of people who sat at my tables:

• CEOs
• Non-profit representatives
• Small business owners
• Sustainability experts
• Advocates
• Students
• City and County Government Officials
• Attendees from other cities and countries

It was a great mix and cross-section of the community.  I would be lying if I didn't find some of the ideas and opinions offered to be "wild" or out of touch with reality.   There were also times when the Summit got to be a bit too much cheer-leading and not enough specific action.  However, there was no denying the energy and purpose of the group. 

There was an excellent advance briefing paper that was given to participants.  The Sustainable Cleveland briefing paper includes good information as to groups, initiatives and progress to date in Northeat Ohio on sustainability.  There were also notable speakers at the Summit.  Here are a couple thoughts or observations that I found interesting that were offered by some of the speakers:

• Mayor Jackson's opening remarks:  He said Cleveland had made the mistake in the past of waiting to change course until the economy had improved.  He said "Cleveland won't make that mistake again" and that Cleveland will "emerge first in developing a green economy."  My comment:  I like the sentiment of not waiting, but Cleveland is already behind many other cities in moving this direction.  We have to be realistic in our assessment of where we are now to get some place in the future...
• Van Jones of the Obama Administration:  He made the observation that everyone points to China as the example of a dirty or old style industrial economy.  He said China has seen the direction of the future economy and is spending $12 million dollars an hour on development of clean energy.  My comment:  I thought this really was a good observation that we are in a global competition of developing clean energy.
• Dr. Peter Senge, MIT:  He made some interesting observations regarding sustainability principles.  For example, to produce a computer chip you must use 630 times the weight of the chip in materials to construct it.  That is an amazing amount of waste those goes into developing a single small product.  The observation was made to show the opportunity to reduce waste in the process thereby saving money

Overall, I thought the Summit was a testament to the a growing positive attitude in Cleveland about change. Attendees were willing to devote three days in dark hall of the Convention Center to discuss these topics and develop a plan. 

A Dose of Reality

I will conclude by making an observation regarding building success out of the Summit.  I was lucky to participate directly in the Great Lakes Regional Collaboration (GLRC).  The GLRC was a on-going process to develop a plan for protecting and cleaning up the Great Lakes. It was initiated by President Bush by Executive Order.  The idea was to follow the Florida Everglades model and secure significant funding for restoration of the Great Lakes.

The GLRC was on a scale five times the size of the Cleveland Sustainability Summit.  It involved multiple federal agencies, Indian tribes, state representatives, non-profit groups and environmental groups.

Similar to the Cleveland Sustainability Summit there was tremendous energy and optimism from the participants.  However, that optimism also led to the inclusion of some very unrealistic goals and actions in the GLRC plan for the Great Lakes.  I remember continually raising the concern that the plan had to be realistic and build toward the future.

Some of the most unrealistic proposals were included in the final plan.  What happened...after a full year in development, the plan was virtually shelved due to budget concerns at the federal level.  Participants were disheartened and charges were thrown around that the process was purely a political tool. 

I hope the concept of a lasting 10 year strategic plan for attracting green jobs to Cleveland does not follow a similar path.  Significant progress is possible, but it must include a dose of reality.

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On August 20, 2008, the Public Utility Commission of Ohio (PUCO) put forth proposed rules governing alternative and renewable energy sources.  The rules main purpose was to govern implementation of the State's new Advanced Energy Portfolio Standard (AEPS) established in Senate Bill 221.  The AEPS is broader version of a renewable portfolio standard (RPS) adopted by other states which mandates a certain percentage of power come from designated renewable energy sources.

The PUCO set a very aggressive public comment period in an attempt to finalize the rules quickly.    The comment period closed on September 26, 2008.  In the short month long comment period, the PUCO received hundreds of pages of divergent comments on the proposed rules. (See my prior post: Issues with proposed rules governing the AEPS)  Since closure of the comment period, the PUCO has failed to developed a second version of the rules. 

Today, a company filed a new letter on the docket which discusses the real world impacts of the delay in finalizing the rules governing the administration of the AEPS in Ohio.  Until the rules are finalized, no one knows what the renewable energy credit (REC) market will look like in Ohio.   A REC is the certificate issued to generators of renewable energy sources.  The certificate can be sold to the utilities to meet their compliance requirements with the AEPS.  REC are seen as a way to encourage renewable energy development.

The problem is that there are so many questions left regarding the construction of the rules, no one can set a reliable price for RECs. S.B. 221 contained a cap on REC prices of $45 per megawatt which certainly is the ceiling on REC prices in Ohio.  However, that leave a huge range in potential prices that is highly dependent on the construction of the rules.

The compliance period for the AEPS in Ohio begins in 2009.  Without an established market projects will get delayed.  This will make it far more difficult for Utilities to comply with the AEPS mandates.  In 2009, Utilities must develop or purchase .25 % of their total generation capacity from renewable energy sources.  While a quarter of a percent may seem tiny, in an energy market as big as Ohio's there will be a significant need for RECs.

In 2008 Ohio generated 13,000 megawatts of power.  A quarter percent means the REC compliance market in 2009 will be around 32,500 megawatts.  This is certainly enough to drive a significant amount of project develop in the State. 

Until the rules are established, the market for RECs will be uncertain.  Without this needed certainty many will delay moving forward with projects.  Of the states with an RPS, Ohio was one of the last states to establish an RPS.  This has meant Ohio has been late to the game in attracting investment and green jobs related to the renewable energy market.  The rules need to be finalized quickly so that Ohio doesn't lag further behind. 

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Governor Ted Strickland made his State of the State speech today.  While almost the entire speech was focused on education there were a few interesting nuggets relative to Ohio's progress in developing green jobs. 

"Over the last three years, Ohio has led the nation with 350 new or expanded facility projects in the renewable energy sector.

 Take solar energy, for example. The Toledo area has become an international center for solar research and production, with more than 6,000 people working in the solar industry. First Solar and Xunlight (Zun-light) both launched major expansions just this past year.

 All across the state we’ve seen advanced energy creating opportunities."

Later in the speech Strickland discussed Ohio's efforts to incorporate energy efficiency requirements into new government buildings:

Together we took the school building program that Governor Taft and the legislature created, and we expanded it to fund hundreds of new and renovated school buildings. And our new schools are being built to efficiency standards that will reduce our energy costs for the life of the building. In fact, Ohio has the largest energy efficient school building program in the nation.

The Governor should be commended for creation of a Renewable Energy Portfolio Standard (Ohio calls it an "Advanced Energy Portfolio Standard").  His initial proposal was greatly improved upon in the Legislature.  However, the rules governing implementation of the RPS seem to be currently stuck at PUCO after the Commission was flooded with comments on how to improve them.  Without improvement we stand to lose the momentum gained through passage of the energy legislation.

The Governor also included Advanced Energy Grant Funding in the Job Stimulus package passed recently.  However, the size of the grants ($250,000 for non-coal projects) seem to be too small to attract major new development to the State.

Is Ohio losing the momentum on attracting green jobs and economic development? 

President Obama has made clear his priority is renewable energy, climate change and green jobs.  Given Ohio's importance in the election this seems like a perfect fit to start getting Ohio out of its economic crisis and create the jobs of the future. Unfortunately, the Governor included no new proposals or ideas for how to build on Ohio's recent momentum in his State of the State address. 

Many states recognize the huge changes that are coming as a result of climate change and energy.  Unfortunately, Ohio lags these other states in developing and attracting the talent to truly lead in these areas.  As purely anecdotal evidence, when I attend national conferences that discuss these issues I will sometimes be the sole representative from Ohio. Meanwhile the New England States and West Coast dominate these conferences. 

Granted I don't attend every conference in these areas, but Ohio has certainly not lead on renewable energy.  It was the 26th state to pass an RPS.  Ohio has not lead at all on climate change. Its efforts have been focussed on resisting rather than improving climate change proposals. 

When the major policy changes on climate change and renewable energy are put forward, where do you think the jobs will go? 

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The gloom and doom of today's economy, especially in Cleveland, is covered almost daily.  Job's have been disappearing from the area at a rapid clip.  The front page of the Cleveland Plain Dealer has almost been dedicated to breaking the bad news.  See, Plain Dealer Article "Northeast Ohio Job Loses Spread."

The Article includes the graphic to the left which shows areas of job growth and declines.  The question swirling around Norheast Ohio is how to get the overall economy growing again. 

The most important change is to adopt a Statewide strategy to pursue jobs of the future, rather than putting most of our efforts and money to try and protect struggling industries like the auto companies. We need to look to where the jobs of the future are going to develop and be aggressive about jumping into that space.

Northeast Ohio has done that well with its efforts on attracting medical innovation investment.  Growth in health care is here to stay. 

So what is another job growth area of the future?  It has been discussed with ever increasing regularity- Shifting towards attracting clean technologies jobs that will be associated with the monumental changes associated with energy and Climate Change. 

I am by no means the first to point out Northeast Ohio needs to be aggressively positioning itself to attract those jobs.  For example, locally we have had champions like the Cleveland Foundation pushing leaders to fully embrace a strategy to attract Clean Tech to Northeast Ohio (see, Rich Stuebi's recent op-ed piece in the Plain Dealer)  And leaders are paying attention.  You may not know this but the Greater Cleveland Partnership was the only chamber of commerce in Ohio that supported including renewable mandates in Ohio's Energy Bill that passed this summer.

Progress is being made, but we better double our efforts or will be beat out by other states and regions who have their eyes on the same jobs.  Like it or not, Northeast Ohio's chances at success are intertwined with State leadership efforts on developing a Clean Tech economy.

What is leadership?   Leadership means being out front, not coming late to the party.  For example, Iowa long ago embraced wind energy and has a large portion of generation from wind.  So which state is landing a multi-million dollar new manufacturing facility? Of course it is Iowa.  Meanwhile, Ohio was one of the last states to adopt a mandate on renewable energy.

Texas has also been taking notice and positioning itself to tie its economy to the forthcoming growth in Clean Tech.  An organization call Catalyst just completed a study of Clean Tech opportunities in Texas.  The study includes a series of recommendations for State leadership to adopt to ensure Texas is well positioned. 

Below I have taken out the recommendations that are included in the Texas study and provided my own analysis as to how Ohio is doing in these areas.  It is intended as a scorecard on Ohio's strategy to attract Clean Tech jobs.

Market Recommendations

• Spur the creation of renewable energy markets by modernizing the state’s Renewable Portfolio Standard to promote non-wind generation, and update the state’s wind policy to promote the next generation of wind investment. (Ohio passed S.B. 221 that includes a broad RPS to encourage varies technologies.  The key issue with Ohio's RPS are the "out clauses" if costs to comply exceed 3%. Hopefully these clauses don't render the mandate useless)
• Incent and reward residential and commercial energy customers who choose renewable electricity options, including aggressive rebates or tax credits for solar installation or other distributed generation. (Ohio does include some limited incentives for renewables. The Ohio Department of Development (ODOD) has information regrading solar for consumers.  But an analysis should be done to compare Ohio incentives to those provided by other states. Growth in residential demand helps attract companies to Ohio.)
• Promote Texas companies by tying customer rebates and incentives to products designed, manufactured or marketed by Texas companies. (I am not aware that Ohio is doing anything in this area.  I know there is a "Buy Ohio" program, but I don't think it has much value in the Clean Tech arena)

Economic Development Recommendations

• Conduct a comprehensive analysis of how Texas' new energy economic development incentives compare to those of other key states. (Ohio should perform such an analysis.  Ohio has new funding for alternative energy projects through the Ohio Air Quality Development Authority (OAQDA).  However, more information is needed as to whether this is enough of an incentive to put Ohio ahead of other states)
• Consolidate existing and new incentives into a comprehensive and simple New Energy Incentive Package, and actively promote and market it by establishing a visible, coordinated state office to serve as a single point of entry for new energy economic development inquiries. (Ohio gets a mixed scorecard on this one.  Governor Strickland gets credit for creating an Energy Advisor position.  Also, he has increased available incentives.  However, authority and funding is split between OAQDA and ODOD.)
• Commit specific and significant portions of the Emerging Technology Fund and Texas Enterprise Fund to companies and efforts in new energy industries. (Again, Ohio has created the Alternative Energy Fund as part of its Job Stimulus Package.  However, grants are limited to between $50,000 to $250,000 on renewables which seems hardly enough to attract series development. It may be a good program for helping bridge research to commercial deployment, but a larger effort is needed.)
• Create a state-sanctioned venue through which university and community college officials, workforce development officials, regional and local chambers of commerce, and state leaders can develop a Green Jobs education and training strategy. (This has not been done at all in Ohio.  Efforts are scattered and not coordinated across the State.)

State Reputation Recommendations

• Change the political rhetoric surrounding the new energy economy. The world has recognized this is no longer a partisan issue, but an economic opportunity. As long as Texas leaders position the future—and the new energy economy—as bad for Texas’ economy, businesses will go to other states where they’re welcome. This will require current leadership to demonstrate more enthusiasm for the future economy. (This same sentiment can apply equally to Ohio.  Due to its historical manufacturing base and reliance on coal, associations and leaders view major changes such as Climate Change as only bad for Ohio's economy.  To be a leader, the State must be willing to embrace the changes and work to take advantage of them.)
• Convene a blue-ribbon commission on the new energy economy—consisting
  of traditional energy companies, renewable energy companies, universities,
  entrepreneurs, utilities and economic development entities—to design
  a long-term new energy economic development strategy for the state. This strategy should build upon the general suggestions of the Governor’s Competitiveness Council’s Report and State Energy Plan, and provide specific, executable strategies for promoting the new energy economy in Texas. (Another suggestion that would be wise for Ohio to adopt.  While there have been smaller efforts, development of a comprehensive plan is the only way to position the State for success.  A piece meal approach to incentives, RPS and training only means Ohio will be at best a middle tier state in attracting Clean Tech jobs)
• Appoint a statewide, cabinet-level New Energy Economy Czar, responsible for identifying, articulating and executing a statewide strategy for maximizing Texas’ New Energy economic development opportunity. (Governor Strickland did create the position of Energy Advisor filled by Mark Shanahan. However, this position certainly does not have equal status to the recommendation in the Texas study.)
• Launch a Manhattan Project-style initiative to design the model “future grid” that could serve as a national proving ground for emerging energy technology and a model for networks nationwide.  (While I don't have enough insight to determine if this is a worthwhile recommendation, the notion is correct that the State must take nationally visible efforts to distinguish itself from all the other States competing for these jobs.)

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A report released today by the U.S. Conference of Mayors estimates that job growth associated with green industries could be the fastest growing job market over the next few decades.  As reported in Time Magazine:

A major shift to renewable energy and efficiency is expected to produce 4.2 million new environmentally friendly "green" jobs over the next three decades, according to a study commissioned by the nation's mayors.

By 2038, another 4.2 million green jobs are expected to be added, accounting for 10 percent of new job growth over the next 30 years, according to the report by Global Insight, Inc.

"It could be the fastest growing segment of the United States economy over the next several decades and dramatically increase its share of total employment," said the report, obtained Wednesday by The Associated Press.

Ohio, with its long history of manufacturing and its heavy reliance on fossil fuels, has been slower to embrace green ideas as means of turning its economic fortunes around.   However, the drumbeat of bad economic news has more Ohio leaders looking for new opportunities to jump start Ohio's economy.  From 2000 to 2007, Ohio lost 209,000 jobs.  During that same period Cleveland lost 63,000 jobs based upon a report compiled using Department of Labor statistics. 

The single largest development was passage of legislation (S.B. 221) this summer that created a renewable portfolio standard, advanced energy portfolio standard and energy efficiency requirements. However, a review of recent local news stories and events shows the Buckeye State is beginning to focus on developing a green economy:

• Cincinnati Wants to Lead Green Roof Movement in U.S.- The City Council on Wednesday became the first in Ohio with a plan to channel grants and loans to residents and businesses to replace tar and shingles with vegetation.
• Columbus Summit on Sustainability and the Environment-  MORPC, the Columbus metropolitan planning organization, held a successful multi-day summit at the Columbus Convention Center.  Over 500 individuals attended that event that had a wide range of presentations relating to sustainability. 
• Eight Major Green Projects in Northeast Ohio- They include attracting fish to the Cuyahoga River shipping channel through installation of plants along the bulkhead, deconstruction of abandoned homes to recycle the materials, local food from urban community gardens, etc.
• Wind Turbines on Lake Erie- Cuyahoga County officials this week rolled out the first three reports from their $1 million study of a grand vision -- erecting two to 10 wind turbines in the lake off Cleveland's shore.  Constructing off-shore wind power in fresh water is seen as a possible economic driver in Northeast Ohio.
• Ohio State University Participates in Solar Decathlon- 20 university teams will participate in the 2009 Solar Decathlon. The teams, chosen from the United States, Canada, and Europe, will each receive $100,000 from DOE to design, build, and operate energy efficient, solar-powered homes.  The Solar Decathlon is an international, biennial competition that challenges university teams to design and build energy efficient solar-powered homes.
• Ohio Has 28 Solar Sites as Part of National Solar Tour-  Green Energy Ohio organized the tours in Ohio as part of the American Solar Energy Society.  The tours are from October 3-5.
• Ohio Gov. Recognizes U. of Toledo Solar Power Leadership-

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The initial comment period is now closed on the Public Utilities Commission of Ohio's (PUCO) draft rules for implementation of the Alternative and Renewable Energy Requirements. The PUCO received hundreds of pages of comments from a wide variety of perspectives: Utilities, Renewable Energy Developers, Industrial Customers, Environmental Groups, Clean Coal Technology Providers, and Consumer Groups.

The rules were set in motion by passage of Ohio’s comprehensive Energy Legislation (SB 221) which includes provisions designed to promote alternative and renewable energy development.  The legislation includes both an Advanced Energy Portfolio Standard (AEPS) and a more traditional Renewable Energy Portfolio Standard (RPS). 

While the Legislation was very complex, major policy issues were left to be sort out through rule promulgated by the PUCO.  The comments received on the first draft of the rules for implementation of the AEPS and RPS reveal significant differences of opinion over critical issues.

Here is my critical issue list.  The rules must address squarely these issues to determine the direction of Ohio's energy policy.

1. What are "advanced energy"  resources and projects and how best to promote it?  For example, right now the rules contain no standards for what qualifies as clean coal.  Comments I submitted pointed out that a simple reduction of a few pounds from a 500 mw source that emits a 1,000 tons of pollution could still be considered a "clean coal" source.  Worse yet, the entire generation could qualify toward meeting the AEPS.  Without modification the AEPS could be rendered effectively meaningless.
2. Double counting environmental attributes- It appears from the comments that Ohio doesn't recognize this debate has been going on nationally for some time.  Many of the 26 or so states that have had RPS standards have been sorting this type of issue out.  The standard practice emerging nationally is not to allow CO2 emission reduction credits to be separated from a Renewable Energy Credit (REC).  Allowing otherwise distorts the voluntary CO2 and REC markets.
3. How much teeth does the RPS have?  Many comments were submitted that the rules would grant the PUCO too much discretion to waive compliance with the RPS standard based upon a "act of god" (force majeure).  Also, SB 221 allowed compliance with RPS benchmarks to be waived if electric rates rise as a result of the RPS by more than 3%.  But how you measure the 3% increase is critical to determining whether there truly will be a RPS requirement in Ohio.  It seems the rules have to answer the question-are we serious about having an RPS standard in Ohio?

 (a summary of the major comments on the AEPS and RPS by clicking on "continue reading" below)

(photo: Kevin Dooley/everystockphoto.com)

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