What are Ohio’s Clean Energy Laws?
Ohio is one of many states that has set goals for its electric utilities in regards to how much of the state’s energy needs must be met through renewable resources and how much energy they save by being more efficient in their use.
In Ohio, these goals come in the form of an Alternative Energy Portfolio Standard (AERS) and an Energy Efficiency Resource Standard (EERS).
Together, these two standards are Ohio’s Clean Energy Laws.
The overarching goal of Ohio’s Clean Energy Laws is three-fold:
- To gradually diversify Ohio’s energy portfolio, which creates greater energy security (because we are less reliant on a single resource such as coal);
- To stabilize the price of electricity; and
- To reduce harmful air pollution that is attributable to the electric-generation sector.
These laws were first created in 2008 with the enactment of Ohio Senate Bill 221, and updated in 2012 with the enactment of Ohio Senate Bill 315.
Senate Bill 315, passed in 2012, modified Ohio’s Clean Energy Laws to include additional technologies and measures.
Specifically, Ohio law now allows Waste Energy Recovery (WER) technologies (exhaust heat and gas-line pressure drop technologies only) to qualify as a renewable resource for the purpose of complying with the RPS portion (12.5% by 2025) of the state AERS.
SB 315 allowed for WER technologies as well as fuel-fired Combined Heat and Power (CHP) technologies to qualify as an efficiency measure under the state EERS.
Now, utilities may count energy savings attributable to these customer-sited projects towards their annual energy savings targets.
Ohio’s Alternative Energy Portfolio Standard
Ohio’s Alternative Energy Portfolio Standard (AERS) states that by the year 2025, 25% of electricity sold within Ohio must be generated via alternative resources. Of this overall 25% target, at least half (or 12.5%) must be from renewable sources, like wind, hydropower, biomass, and solar.
This 12.5% target has annual benchmarks associated with it, and on account of yearly enforceability by the PUCO, this target is sometimes referred to as Ohio’s Renewable Portfolio Standard (RPS) on its own. The remaining 12.5% of the overall alternative energy standard can come from advanced resources like nuclear, clean coal, and certain fuel cells.
Ohio’s Energy Efficiency Resource Standard
Ohio’s Energy Efficiency Resource Standard (EERS) states that by the year 2025, Ohio utilities must reduce their customers’ demand for energy by a total of 22.5%. This is a cumulative target, meaning that each year the annual savings are added to the savings from the year before. The annual benchmark for energy saved never exceeds 2% in one year.
Ohio law stipulates that energy efficiency programs must save customers more money than the programs cost to administer. This ensures that Ohio customers are getting a good deal—and not just residential customers, but commercial and industrial customers, too.
Successes of Ohio’s Clean Energy Laws
Ohio’s EERS and RPS policies are working and the annual targets set in each standard are more than achievable by Ohio’s investor-owned utilities. However, some members of the Ohio General Assembly are considering making sweeping changes to Ohio’s Clean Energy Laws. Making such changes at this time is completely unnecessary, especially when you consider:
- All four investor-owned utilities are in full compliance, as of 2011, with the annual benchmarks in the RPS and the EERS. Some utilities are even exceeding the minimum expectations set in the standards.
- Making any changes at this time would jeopardize the jobs of approximately 35,000 Ohioans who are employed in clean energy industries.
- Through the enactment of Ohio Senate Bill 315 just 6 months ago, the Ohio General Assembly modified both the RPS and the EERS without changing the annual benchmarks for renewable resources or energy efficiency savings.
And by adding new eligible resources to both standards – Combined Heat and Power (CHP) and Waste Energy Recovery (WER) – the Ohio General Assembly re-affirmed its belief that the standards are effective tools for encouraging economic development, increasing competitiveness, and developing clean resources.
- The cost of NOT investing in renewable resources and energy efficiency is exorbitantly high, by all estimations verified by competitive energy markets.
- Since 2009, Ohio has added more than 400 Megawatts (MW) of wind energy resources and 1300 MW are on the way. 100% of these MW are from facilities located within the state of Ohio.
- Since 2009, Ohio’s electric consumers have saved over $1.7 billion on their electric bills.
- Since 2009, Ohio has vaulted up to 16th in the nation in solar energy installation and 2nd in solar manufacturing.
Let Ohio’s Clean Energy Standards – both the RPS and EERS – continue to work!
These minimum requirements on Ohio’s utilities are saving customers money, improving our air quality and creating jobs.
A legislative effort to weaken these standards will stifle one of the few bright spots in Ohio’s economic picture and send a negative message to clean energy and energy efficiency companies that are looking to develop projects in Ohio.