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)