Ohio Moves Closer to No More Windmills

A two-year suspension of the government wind energy mandates that were imposed on Ohio utilities will become permanent if the September recommendation of a bicameral legislative panel there is followed. The primary reason cited for the decision was uncertainty over President Obama’s Clean Power Plan.

The Ohio Energy Mandates Study Committee, comprised of both Senate and House members, was created in 2014 by the law that put the temporary suspension in place. The freeze applies to what are called utility “renewable portfolio standards,” a euphemism that for all practical purposes means wind turbines in this part of the country.

The Obama Clean Power Plan announced on August 3, 2015 would if upheld impose nationwide carbon reduction performance standards and statewide caps on carbon dioxide emissions from existing power plants. The stated purpose is to reduce nationwide emissions 32 percent below 2005 levels by 2030.

The Obama administration and Environmental Protection Agency point to clauses of the federal Clean Air Act to support their authority to impose the rule, but given a number of lawsuits including some brought by states, the constitutionality of this unprecedentedly broad expansion of federal power over electricity generation will almost certainly be decided by the U.S Supreme Court. If it doesn’t become moot before then this will most likely occur years after the current President has left office.

Ohio and Michigan are basically in the same boat regarding wind energy. Both are considered to have relatively poor wind energy potential. What is called wind power in these states actually consists of about two-thirds fossil fuels, because the wind blows enough one-third of time.

However there are key differences between Ohio and Michigan. Ohio has a more deregulated electricity market, while Michigan still has traditional regulated monopolies (with a 10 percent slice of customer choice permitted).

This seems to make Ohio utilities more sensitive to energy costs, and they are on the side of the Ohio bicameral committee’s call for keeping the renewables moratorium in place. In Michigan, the big utilities tend to be more neutral, and a well established rate setting mechanism ensures they can recoup the additional costs of legislatively imposed renewable mandates.

In addition, Ohio presents a more united front in challenging the Obama Clean Power Plan than Michigan. Michigan Attorney General Bill Schuette has joined a lawsuit against the plan, but Gov. Rick Snyder decided not to challenge it and announced his administration will submit a plan of compliance to the federal government. In contrast, Ohio Gov. John Kasich seems to be onboard with an effort to thwart the Clean Power Plan.

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On Oct. 21, Capitol Confidential spoke to state Sen. Bill Seitz, R-Green Township, one of the Ohio lawmakers backing the renewables freeze. The following is a short excerpt from that interview.

CapCon: What is the legislative committee hoping to accomplish with its recommendations?

Sen. Seitz: In 2014 we passed Senate Bill 310 that put a two year freeze on the march up mandate mountain. The legislation that instituted that freeze also created a legislative committee to study the mandate situation. The mandate study committee has now done its work and recommends that the freeze be continued indefinitely due to the over-reach of the federal Clean Power Plan.

For the rest of the interview go here.