News and Analysis
A joint committee of the legislature established to study the state’s energy efficiency and renewable energy standards released its report within the past week.
The committee made five basic recommendations. The implications of these general recommendations for manufacturing are: some costly, some potentially good, and some uncertain.
Read an analysis of the report here.
Leading House Republicans have introduced legislation, HB 349, which would require the Ohio EPA to submit its eventual plan for meeting the requirements of the federal Clean Power Plan to the Ohio General Assembly for approval. Under the bill, each chamber of the legislature would be able to reject the EPA plan and prohibit the agency from submitting it to the U.S. EPA.
The bill lays out a series of matters that the Ohio EPA must consider in constructing its compliance plan, including assuring that its plan is a “least cost compliance approach to benefit consumers of electricity.”
The Senate this week approved Senate Concurrent Resolution 6 to urge Congress to repeal the federal ban on the export of crude oil, sponsored by Senator Troy Balderson (R-Zanesville). The non-binding resolution received bipartisan support. The U.S. House of Representatives is expected to consider lifting the ban.
The Energy Mandates Study Committee this week published its report. The committee was created by SB 310 of the 130th General Assembly to study Ohio’s renewable energy, energy efficiency, and peak demand reduction mandates enacted into law by SB 221 of the 127th General Assembly. The Study Committee consisted of members of the Ohio House and Senate and the chairperson of the Public Utilities Commission of Ohio.
SB 310 froze Ohio’s energy efficiency standards at 2014 levels for two years, 2015 and 2016, and provided that annual energy efficiency benchmarks would resume in 2017 on the same schedule outlined in SB 221, if the legislature did not act to further freeze, reduce, or eliminate the standards.
The committee has reported out five recommendations that the General Assembly can now adopt in whole or in part, or not at all.
The recommendations include: 1) Extend the SB 310 freeze indefinitely; 2) Provide an expedited process at the PUCO for the review of new utility plans for energy efficiency; 3) Investigate and ensure maximum credit for all of Ohio’s energy initiatives; 4) Switch from energy mandates to energy incentives; and 5) Declare that the General Assembly retains statutory authority with respect to energy policy and dispatch protocols.
The media reported that the indefinite freeze was not favorably received by Governor Kasich. His office is reported as saying: “A continued freeze of Ohio’s energy standards is unacceptable and we stand willing to work with the Ohio General Assembly to craft a bill that supports a diverse mix of reliable, low-cost energy sources while preserving the gains we have made in the state’s economy.”
The OMA agrees with the governor: Energy efficiency is the lowest cost energy resource and should be a part of a diverse energy resource mix.
Last month, OMA members participating in OMA’s Energy Efficiency Peer Network (EEPN) toured Crown Battery in Fremont to see energy efficiency innovations.
Earlier this year, EEPN members toured Honda.
OMA members can participate in this energy work group led by OMA’s energy engineering partner, John Seryak of Go Sustainable Energy LLC, to access the most up-to-date information in the areas of combined heat and power, waste heat recovery, and energy efficiency.
The work group meets via web-conference bi-monthly and undertakes plant tours periodically. Learn more and sign up here.
In a welcome development, the staff of the Public Utilities Commission of Ohio (PUCO) filed testimony recommending the agency deny FirstEnergy’s proposal to guarantee profits from a handful of power plants by having customers subsidize them.
PUCO Senior Energy Specialist Hisham Choueiki said in testimony, “Staff recommends that the Commission deny rider RRS as it is currently proposed.” The staff left the door open to an alternate approach to the utility’s current proposal.
The OMA Energy Group opposes the utility’s proposed plan, which would be costly to consumers and would constrain competition.
The U.S. Department of Energy (DOE) released a new report that proposes a roadmap for doubling U.S. energy productivity by 2030.
The report, “Accelerate Energy Productivity 2030: A Strategic Roadmap for American Energy Innovation, Economic Growth, and Competitiveness,” models six strategies to achieve the goal. The model indicates the strategies would contribute “in aggregate to a net increase of $922 billion in U.S. GDP by 2030. This is primarily supported by an increase of $753 billion in household expenditures and by a $169 billion increase in investment in products and services that increase energy efficiency.”
Hill stated: “AEP-Ohio’s strategy to utilize a power purchase agreement as a massive subsidy from ratepayers to fund AEP-Ohio’s non-regulated subsidiary’s uneconomic electric generating units is flawed. Such a proposal, if implemented, would fundamentally distort the electricity wholesale energy markets. It would shift the financial risk of operating generation plants onto AEP-Ohio’s ratepayers, placing the risk of market failure squarely on AEP-Ohio’s distribution consumers. This would fundamentally undermine the intent of the Ohio General Assembly when it restructured Ohio’s electricity markets in 1999.”
Noting the particularly harmful effect on manufacturing, Hill further testified: “Research conducted at the Levin College shows that in 2010, Ohio had the highest level of manufacturing activity among the Midwestern states. Ohio’s energy intensive industries are prominent parts of the state’s economic base; these include primary metals, petroleum and coal products, chemicals, food processing, nonmetallic mineral production, paper manufacturing, and wood products. AEP Ohio’s proposal would have significant negative effects on the manufacturing productivity of firms throughout these sectors.”
Last Friday, Ohio EPA Director Craig Butler testified before the U.S. House of Representatives Committee on Science, Space and Technology Subcommittee on Environment.
Director Butler’s testimony focused on the final Clean Power Plan (CPP) issued by U.S. EPA earlier this summer. The director said, “With unresolved legal challenges, along with substantial changes between the draft and final proposal, U.S. EPA should hold off on implementing the final CPP until legal challenges are resolved or reissue the final CPP as a proposed action.”
The director also made reference to a letter from Governor John Kasich to President Obama requesting that the CPP implementation be suspended until the legal challenges are resolved.
During the second quarter of 2015, Ohio’s horizontal shale wells produced 5,578,255 barrels of oil and 221 billion cubic feet of natural gas, reports the Ohio Department of Natural Resources.
These numbers break all previous production reporting records, going back 100 years.
Oil production increased by more than 3.1 million barrels and gas production increased by more than 133 billion cubic feet compared to the second quarter of 2014.