‘Giveaway’ for utilities included in bill to make Ohio energy standards voluntary

An energy bill that would make compliance with the state’s clean energy standards voluntary until 2020 now heads to the Ohio Senate with a new provision that critics call an added “giveaway” for utilities.

House Bill 554 passed in the Ohio House of Representatives yesterday by a vote of 56 to 41.

The bill now now heads to the Ohio Senate’s Energy and Natural Resources Committee for committee testimony this afternoon at 4 p.m. EST and tomorrow morning at 9 a.m.

A vote by the full Senate could take place as early as tomorrow afternoon.

“Ohio’s residential and business consumers should be concerned with energy legislation passed by the Ohio House today,” said Ohio Consumers’ Counsel Bruce Weston in a statement released yesterday. “The proposed law would cost consumers many millions of dollars in charges for higher utility profits without a corresponding public benefit.”

Further delay

The bill, which would delay the return of enforceable renewable energy efficiency and renewable energy provisions for three more years, has already been the target of extensive criticism from environmental groups and advocates for the wind and solar industry.

Opponents have noted that the current freeze on Ohio’s clean energy standards has already had a negative effect on investments in the state’s renewable energy industry and makes the state less attractive to companies in other industries as they look to site new facilities.

If either HB 554 or a companion Senate version were to pass, critics say the bill would also cost the state jobs, while increasing pollution and causing continuing health costs.

The proposed legislation would also continue loopholes that could let utilities profit from energy efficiency programs at consumers’ expense, opponents have said, even for actions those utilities did not take.

“HB 554 will represent tremendous cost increases for customers, as well as increased air and water pollution for all Ohioans,” said Jen Miller of the Sierra Club’s Ohio chapter. “This legislation shouldn’t pass at all. But it certainly shouldn’t be rammed through, given its great ramifications.”

‘Banking’ for profits

The version of the bill that passed in the Ohio House yesterday includes additional language that would let utilities get so-called shared savings for decreases in energy usage in prior years.

Basically, a utility could count lower energy usage from an earlier year towards a benchmark for compliance. Then it could keep a share of customer charges for energy efficiency programs in the current year as “shared savings.”

In other words, noted Molly McGuire at the Office of the Ohio Consumers’ Counsel, “this provision would allow electric utilities to use so-called ‘banking’ of energy savings to charge consumers for higher profit.”

“It’s a huge giveaway,” said Trish Demeter at the Ohio Environmental Counsel.

In her view, that’s especially true because the banked savings would not represent any improvement in the current year and would not even necessarily result from any work by the utilities.

“They wouldn’t have to lift a finger to earn those shared savings,” Demeter said. As she sees it, that “really distorts” the idea of using shared savings as an incentive for utilities to do more than the law requires.

“The Ohio House of Representatives did a great disservice to the people of Ohio,” Demeter said. “This rushed and sloppy legislation will have untold impacts on electric bills, result in dirtier air, and stifle economic innovation and job growth.”

“Ohioans deserve better than this,” she continued. “We need strong leadership in the Senate to get to work and put Ohio’s clean energy future back on track.”

If passed by both houses, clean energy advocates would then hope for a possible veto from Gov. John Kasich.

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