On August 20th, the Public Utilities Commission of Ohio (PUCO) proposed administrative rules for the implementation of Ohio’s Alternative Energy Portfolio Standard. Approximately 26 states have enacted renewable portfolio standards (RPS) that mandate a certain percentage of electricity supplied in the state come from renewable sources. Only one other State, Pennsylvania expanded the mandate to cover additional sources of energy beyond renewables.
Ohio has now gone beyond Pennsylvania in promoting other "advanced energy sources." Ohio is the first State in the Country to allow the following resources to be eligible toward meeting the advanced energy mandate:
- Clean Coal Technology
- Technology or improvements that reduce CO2 emissions
- Enhancement of Nuclear Power
Under Senate Bill 221, and as set forth in the proposed rules, 12.5% of power supplied in Ohio must come from these and other advanced energy sources (fuel cells, distributed generation, fuel cells, solid waste to energy and energy efficiency projects) by 2025.
The proposed rules are pretty standard on the renewable side. The include provisions used by other states who have already had an RPS. The rules provide for annual benchmarks, alternative compliance payments, use of renewable energy credits (RECs) and costs caps on meeting the RPS.
It is significant that Ohio has developed a more complex and interesting portfolio standard for advanced energy sources. However, where the SB 221 was very prescriptive as to meeting the renewable standard requirements, the legislation was vague on the advanced energy side of the standard. Unfortunately, the draft rules fail to provide much needed detail.
Here are some issues that should be addressed to better promote advanced energy sources:
- Benchmarks- SB 221 did not include them for meeting the advanced energy standard. The rules should at least require meaningful evaluation as to progress toward meeting the mandate to supply 12.5% from advanced energy sources by 2025.
- Establish a Currency- On the renewable side, Ohio is following the well established method of buying and selling renewable energy certificates (RECs). One megawatt of renewable power equals one REC. There is no such currency established for the advanced energy portion of the standard.
- Better define each advanced energy resource- Most importantly, the definitions of what types of projects qualify are far too vague.
- Example 1: The rules say "a significant improvement to an existing nuclear" facility qualifies. There is no definition of "significant." What type of enhancements are we trying to promote? If one change is made, does the whole plant qualify as an advanced energy resource?
- Example 2: "Clean Coal Technology"- the rules don’t provide anymore specification then SB221. The bill just says qualifying technology is something that reduces pollutants like arsenic, chlorine, nitrous oxide, mercury, sulfur dioxide. By how much? Again, does a small reduction, like one particle of mercury, make the whole 500 megawatt plant an "advanced energy resource?"