Governor John Kasich has made good on a promise to veto legislation that would have prolonged a freeze on Ohio’s renewable-energy and energy-efficiency standards, clearing the way for significant new clean energy investments.
The standards were initially introduced in a 2008 law that required utilities to make up 12.5 percent of their electricity mix with renewable energy sources by 2025, and cut electricity consumption through efficiency programs by 22 percent by the same year. Then in 2014, legislators passed a bill placing a two-year hold on the mandates for the state to conduct a policy review.
An energy study subcommittee, made up primarily of lawmakers who voted to relax the clean energy requirements, recommended last year that the freeze continue indefinitely.
Earlier this month, the Ohio state legislature passed HB 554, which set a renewable energy target of 7.5 percent by 2021, but made compliance with the state’s clean energy standards voluntary for the next two years. Critics argued that making the standards optional would have the same effect as another two-year freeze, and would further weaken Ohio’s clean energy market.
H.B. 554 also made it easier for utilities to comply with energy efficiency targets by “banking” early efficiency gains, which some lawmakers and consumer groups said would increase costs for electricity customers, who ultimately fund the program.
With Governor Kasich’s veto, the original clean energy standards are set to be reinstated on January 1, 2017.
Kasich, who repeatedly warned lawmakers that he did not want to extend the freeze, said approving the bill would have undermined the state’s ability to attract business and create new employment opportunities.
"Job creators have attributed their reasons for expanding, growing and creating jobs in Ohio to, among other things, our state’s stable fiscal health, jobs-friendly tax climate and sound regulatory policies -- as well as our state’s wide range of energy generation options," he said, in a statement. "HB 554 risks undermining this progress by taking away some of those energy generation options, particularly the very options most prized by the companies poised to create many jobs in Ohio in the coming years, such as high technology firms."
Seven major Ohio employers, including Whirlpool, Nestlé, Clif Bar and the National Association of Energy Service Companies praised Kasich for defending the standards in a joint statement released by Ceres.
“Through your veto of HB 554, you have sent a clear market signal that clean energy jobs, investment and innovation are welcome in Ohio,” the statement reads. “Businesses like ours rely on renewable energy and energy efficiency standards in order to cut costs, avoid energy price volatility and stay competitive.”
The veto was also greeted with cheers from environmental groups and cleantech industry advocates.
Before the freeze was implemented, Ohio’s standards supported more than 25,000 jobs, saved Ohioans more than $1 billion on their electricity bills and slashed air pollution in the Buckeye State, according to the Environmental Defense Fund. “With the state’s renewable and efficiency standards back in place, Ohio can reclaim its spot as a clean energy leader, clearing the way for well-paying jobs, millions in investment, and healthier air for all,” said Dick Munson, EDF’s director of Midwest clean energy.
A recent study by EDF and the Nature Conservancy found that increasing Ohio’s mix of energy efficiency and clean energy would create between 82,300 and 136,000 new jobs and provide customer savings between $28.8 and $50.9 million by 2030.
A separate analysis conducted by the Advanced Energy Economy Institute found that meeting Ohio’s energy needs with a combination of renewable energy, energy efficiency and natural gas would save the state $3.3 billion by 2027.
Ted Ford, president of the state-level business association Ohio Advanced Energy Economy, said that Michigan has attracted over $1.1 billion in renewable energy investments over the past three years, while Ohio has been idling. “With this veto, Ohio can begin to move forward with sensible energy policy next year -- one that can bring back advanced energy jobs and investment,” he said.
HB 554 passed with support from Republican lawmakers, led by State Senator Bill Seitz, who referred to the mandates as “socialist policies.” Other lawmakers said they didn’t want to chain Ohio to clean energy standards with a new Republican administration taking control of the White House.
”We have a new federal administration coming in that could make a lot of different impacts,” said Republican House Speaker Cliff Rosenberger, the Toledo Blade reports. “We shouldn’t be stuck in a mandate.”
Support for the bill was not universal, however. Republican lawmakers in regions where the wind and solar industries have taken hold chose to side with Democrats in opposing the legislation.
The Ohio state legislature could override Kasich's veto with a three-fifths majority vote, but failed to meet this threshold when HB 554 passed the House (56-41) and Senate (18-13) earlier this month.