2015 In Review: Lots Of Talk On Green Energy Standards, Severance Tax But Not Much Action
State leaders started 2015 with several important issues to tackle in the energy industry. And as it turns out, as the year comes to a close, many of those questions remain unanswered.
The future of green energy in Ohio dangled all year as lawmakers discussed what should happen to the state’s policies that encourage the use of renewables.
The standards created in 2008 required utilities to use a certain amount of green energy while achieving a set amount of efficiency. Republican lawmakers voted to freeze the standards in 2014 while a commission spent 2015 reviewing them again.
So after months of research and hearings that commission finally decided to keep the freeze, indefinitely. Environmental advocates defended the standards and said they end up saving consumers money. But the committee co-chair, Republican Representative Kristina Roegner of Hudson, says the standards had raised the average electric bill by $40 a year.
“By the way we’re only just at the beginning of the march up what we’re calling mandate mountain. So those riders, if those mandates were to increase, you could extrapolate that those extra costs in your utility bills, each and every one of you would go up as well,” said Roegner.
Several groups were not happy with the commission’s report, including Gov. John Kasich. While he was on the campaign trail, Kasich’s office put out a statement calling an indefinite freeze “unacceptable.”
If the Legislature does nothing, the freeze will lift at the end of 2016.
Also hanging in legislative limbo is a plan to increase the state’s tax on oil and gas, also known as the severance tax. Kasich, for the fourth time as governor, proposed raising the severance tax to take advantage of the state’s booming fracking industry.
The oil and gas industry has been asking for things to stay the way they are with gas prices dropping in the market.
Republican leaders took Kasich's severance tax increase out of the budget and, as with the green energy issue, put a study committee on it. Senate President Keith Faber said this wasn’t a stalling tactic.
“But make no mistake, there’s gonna be a solution to this problem and less one side think that they can drag it out or extend the ball, that’s not an option, because there will be a solution next time,” said Faber.
Cut to a few months later and the report, which came out later than expected, didn’t have any legislative proposal or response to the governor’s plan. Faber said that's because there’s no economic reason to rush this issue.
FirstEnergy goes into 2016 one step closer to sealing what could be a multi-billion dollar deal that would finance one nuclear plant and several coal plants. State regulators would have to approve the deal, but it would result in customer bills increasing by a few dollars a month.
Dan Sawmiller from the Sierra Club’s Ohio chapter says this deal is strictly to save failing coal plants.
“The company is simply asking the commission to bail them out. And if you don’t bail us out then we’re going to shut it down and these people are going to lose their jobs. To me that’s incredibly unfair to the people working in these plants,” said Sawmiller.
FirstEnergy says customers would see an initial spike in their bill but then, after a few years, they would see some credit coming back to their accounts. The Sierra Club did strike a deal with AEP, but Sawmiller says there’s more of a compromise in that plan, with AEP promising to shut down three of its coal plants by 2030. Other environmental advocates, however, are not for that plan as well.
Lawmakers will likely spend 2016 working on the same issues they faced in 2015. The only difference is the pressure for reaching resolutions might be turned up. There’s the ticking clock on the green energy freeze and the idea of yet another budget proposal from Kasich that can, yet again, include a severance tax increase.