SB-310 Darkening Ohio’s Energy Future

Ohio poised to slide into the dark on its energy policy

By Terry Smith, Athens News, May 7 2014

The state of Ohio is poised this week to continue its gleeful slide into backward, reactionary energy policy, with a state Senate Committee expected to approve an amended Senate Bill 310.

This bizarre back-pedaling is happening as most of the rest of the nation and world have accepted both the intrinsic good of ratcheting back on dirty fossil-fuel-driven energy, and the economic opportunities that come with promoting energy efficiency and a shift toward green alternatives such as solar and wind.

Before an amendment proposed Wednesday, S.B. 310 would have frozen at their current modest levels energy efficiency and renewable energy standards and benchmarks passed nearly unanimously by the Ohio Legislature in 2008. It would have canceled the 2008 legislation’s progressive stair-step of benchmarks ending in 2025. Sub. S.B. 310, unveiled Wednesday after negotiations with Gov. John Kasich’s offer, doesn’t appear much better.

It’s the predictable result of the intersection of flat-earth-society climate-change denial – now a firm plank in Republican ideology – and electric utilities and major manufacturers (or deep-pockets outside groups that support them) who are eager to contribute to state legislators who will promote and advance the doomed cause of fossil fuels. In fish-bowl Ohio, they’re all swimming heartily against the historic and scientific tide, as well as a growing business segment in advanced and alternative energy.

YOU SEE THE SAME SORT of willful resistance to reality and good government in the Ohio General Assembly’s refusal to consider raising oil and gas severance taxes to levels even approaching what they are in other frack-heavy states such as Texas and West Virginia.

The latest version of a severance tax bill in the Ohio House of Reprentatives has a top rate of 2.5 percent, which represents a compromise between Gov. Kasich’s proposal for 2.75 percent and the House’s recent proposal for 2.25 percent. It’s similar to a compromise between Bud Light and Miller Lite, basically no compromise at all.

The House Republicans had resisted Gov. Kasich’s proposal, which was still less than half of what drillers face in Pennsylvania. In West Virginia, the effective rate is 11.3 percent.

As an April 27 editorial in the Columbus Dispatch pointed out, “Kasich’s proposed severance tax could double in size and still be under those of Pennsylvania, North Dakota, Oklahoma, Michigan, Arkansas, Texas and West Virginia – in the case of the latter four, well below.” (It should be noted that the Dispatch‘s editorial board is arguably the most conservative of Ohio’s major dailies.)

While comparing the severance taxes from state to state is difficult (the taxes are structured in different ways), no matter how you drill it, the 2.50 percent compromise proposal for Ohio is much lower than the tax in other states that Ohio is supposedly competing against to lure oil and gas drillers, entrepreneurs and investors.

Yet, there’s no public clamor to open up the state’s oil and gas sector to all comers, nor is there any groundswell for doing away with incentives for energy efficiency and renewable energy sources. Meanwhile, there’s growing public recognition of the environmental hazards of industry run rampant, especially with regard to fracking and its resulting waste disposal.

SENATE BILL 310, AS EXPLAINED in an April 4 op-ed by Jereme Kent in the Cleveland Plain Dealer, have frozen freeze in place the renewable portfolio standards and energy-efficiency standards set in Ohio’s 2008 energy policy bill. “This would be the first time in any state, anywhere in the entire United States, that a renewable portfolio standard would be reduced, frozen or repealed.” (Kent is general manager of One Energy LLC, a Findlay company that helps industrial energy users explore the use of wind energy.)

The amendment to S.B. 310, released Wednesday, would replace the permanent freeze with one lasting two years. As Senate President Keith Faber, R-Celina, explained in the Columbus Dispatch, a special committee, with six House members and six senators, would determine whether to make other changes to the energy rules during the two-year freeze, and recommend resulting changes, if any, to the General Assembly. If lawmakers do not set a new energy course during that time, annual increases in energy efficiency and renewable energy sources – as set in the 2008 energy bill – would re-start in 2017 and continue until 2027.

In the widely supported 2008 bill, the General Assembly required utilities to take three steps to slow the growth in spiraling electric rates: 1) achieve savings of 22 percent by lowering electric consumption through energy efficiency by 2025; 2) achieve a 12.5 percent integration of renewable energy into the state’s electrical supply by 2025; and 3) achieve a 12.5 percent integration of advanced energy (cleaner and higher-efficiency forms of conventional technologies). These goals would be achieved through regular benchmarks up until 2025.

Sen. Troy Balderson, R-Zanesville, introduced S.B. 310, and reportedly was responsible for the amendment proposed on Wednesday. It should be noted that the top two campaign contributors to Balderson in 2012, after the Republican Senate Campaign Committee and Ohio Republican Party, were FirstEnergy Group, one of the main advocates of S.B. 310, and American Electric Power, donating $12,500 apiece. Balderson’s 20th District includes the very northern part of Athens County.

In an article in the March 28 Plain Dealer, Ted Ford, CEO of the Ohio Advanced Energy Economy, predicted, “If enacted, Senate Bill 310 will systematically dismantle Ohio’s clean energy law, which was reaffirmed and improved in a comprehensive energy policy bill (SB 315) enacted by the legislature and signed by the governor just two years ago. This radical departure will devastate the advanced energy industry in Ohio, which includes more than 400 advanced energy businesses, employing over 25,000 Ohioans.”

Ford followed up Tuesday evening with an equally negative response to amended S.B. 310. “It is a very bad bill that is, in some ways, worse than S.B. 58 and S.B. 310. None of the proponents of the current (from 2008) standards were involved in shaping this ‘compromise.'” Ford urged other advanced-energy companies, the public and stakeholders to heavily lobby their senators and the governor against the substitute bill. “It is another attempt to take Ohio backward. It will destroy jobs, raise electricity costs, and put Ohio in a poor competitive position.”

In an email Tuesday before the Senate released its compromise to S.B. 310, Geoff Greenfield, president of Athens-based Third Sun Solar, predicted that retreating from the state’s current energy policy will cripple the growing solar energy industry in Ohio.

“If SB 310 went forward as written, it would make the economic payback for solar longer and harder to finance… Passing this law as is would probably cut in half the number of residential customers that go solar… Many would still do it even though the payback is slower,” he said. “For business customers and large projects, it would be devastating and probably shut down 90 percent of the projects, as these are much more financially driven. If this law passed as is, we (Third Sun) would stop hiring and growing in Ohio and focus on other states.” He didn’t appear to be any more impressed by the substitute bill released on Wednesday.

DEFENDERS OF S.B. 310 SAY the measure would protect Ohio electric energy consumers from the high costs of complying with standards in the 2008 energy legislation. In an April 12 op-ed in the Columbus Dispatch, Sen. Balderson claims that the 2008 energy standards were “fabricated to conform with a catchy gimmick or slogan…” Later in the opinion piece, he asserts that his legislation will allow Ohio’s energy policy to be “based on what evidence and science tell us, not the exaggerated rhetoric, slogans or how the political winds blow at a particular time.”

Anyone familiar with the rhetoric of climate-change deniers will see some of their rhetorical flourishes in Balderson’s vague references to gimmicks and slogans gussied up with a gratuitous fealty to science. That’s their perverse way of casting doubt on the overwhelming global scientific consensus that climate change is happening now, is getting worse, and is mainly caused by human-kind’s burning of fossil fuels.

Plus, as critics of S.B. 310 have pointed out and the utilities themselves have admitted, money spent on energy-efficiency standards will recoup twice as much in savings.

If Ohio wants to continue sliding backward into the darkness, while its elected representatives happily collect rent from the fossil-fuel and electric utility industries, and their allies in the dark world of Koch, it makes perfect sense to double down on coal- and gas-fired electric power and flea-market-level severance taxes for oil and gas.

One might hopes, however, that Ohio citizens would have a different idea and show it at the ballot box.