Governor Kasich Restores Clean Energy Standards in Ohio

, policy analyst, Clean Energy | January 13, 2017, 10:19 am EST
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During the final hours of 2016, Ohio Governor John Kasich vetoed Substitute House Bill 554, legislation that would have made Ohio’s clean energy standards voluntary, effectively extending the two year freeze. By vetoing the bill, Kasich restored Ohio’s renewable energy and energy efficiency standards, which have been frozen since 2014.

In Governor Kasich’s veto statement he noted that HB 554 risked undermining the state’s job progress by taking away some of the energy generation options, and would deal a setback to efforts that are succeeding in helping businesses and homeowners reduce their energy costs through energy efficiency.

The Governor was applauded for vetoing the bill by a wide array of corporations and advocacy organizations. UCS also released a statement thanking Governor Kasich.

So what happened? Here’s the backstory.

History of the freeze

The clean energy standards in Ohio were created by a Republican-led General Assembly and signed by Governor Strickland in 2008, requiring Ohio utilities to procure energy efficiency and renewable energy. The Ohio legislature then enacted a 2-year freeze of the clean energy standards in 2014 despite them having a proven track-record of creating economic and environmental benefits for consumers.

In December 2016, the Ohio legislature passed HB 554 which would have delayed any enforcement of increased energy efficiency and renewable energy until 2019, therefore making the standards into voluntary goals for that period. This would have extended the clean energy standard freeze for two more years.

Because the Governor vetoed HB 554, the energy efficiency and renewable energy standards will be reinstated. The current clean energy standards (now restored) require utilities to secure 12.5 percent of their power from renewable sources, and achieve a 22 percent cumulative reduction in electricity use through energy efficiency.

The Union of Concerned Scientists has been working in coordination with local experts and activists to lift the clean energy standard freeze to create a win-win situation for the state’s economy and the environment.

Benefits of the clean energy standards in Ohio

The clean energy standards have brought countless benefits to Ohio. The standards are what are driving a robust clean energy sector in Ohio, with more than 100,000 clean energy jobs in the state. These jobs include workers in renewable energy generation, clean transmission, energy efficiency, clean fuels, and advanced transportation.

Analysis conducted by Cadmus and the Midwest Energy Efficiency Alliance concluded that 2014 energy efficiency investments in Ohio have yielded, and will continue to generate, net benefits for the Ohio state economy. In 2014 alone, these benefits included thousands of new jobs, and more than $175 million in increased statewide income. And over the entire 25 year study period, the 2014 energy efficiency programs are estimated to increase net statewide income by more than $1.2 billion, and add almost $1.9 billion of total value to the state’s economy.

More opportunities for Ohio

It’s important for Ohio to take advantage of the 5 year extension of the federal production and investment tax credits (PTC and ITC) for wind and solar energy resources.  This provides a golden opportunity for Ohio to accelerate renewable energy and deployment even further. States and utilities must act quickly to take advantage of the credits, which begin to decline in value in 2017 (for wind) and 2020 (for solar), before phasing out by 2022.

There is a lot of wind potential in the state. According to the Wind Energy Foundation, Ohio has the opportunity to further lower electricity bills, create additional jobs, increase community investment, and reduce pollution by expanding the use of wind. Wind energy could provide 6.4% of Ohio’s electricity by 2020 and increase to 15.5% by 2030, and create cumulative electricity bill savings of $5.35 billion through 2050.

Our work is far from done  

We applaud Governor Kasich for his veto of House Bill 554. Because of his leadership, Ohio’s clean energy standards are now restored.  Governor Kasich has demonstrated that he has a vision for Ohio’s clean energy future. These clean energy standards are working to create jobs, grow the economy, and reduce harmful emissions.

But our work is not done. It’s predicted that energy will be on the Ohio General Assembly’s agenda again this session. Senate President Larry Obhof has stated that Ohio needs a long term energy plan. So we will celebrate the win, but we are prepared to continue defending clean energy in 2017!

Photo: Howard Johnson/CC BY (Flickr)

Posted in: Energy

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