Policy: Environment & Energy

Ohio renewable-energy bill to start 2-year debate

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News,Business,Ohio,Energy and Environment

COLUMBUS, Ohio (AP) — At the heart of lawmakers' decision to revisit the state's renewable-energy standard is a fundamental disagreement over two goals: reducing carbon emissions and lowering electricity bills.

For average residents, it may sound good to achieve both. But former state utility regulator Ashley Brown, executive director of the Harvard Electricity Policy Group, says that's hardly possible.

A bill pausing Ohio's 7-year-old energy efficiency goals and its renewable-energy targets for solar, wind and other renewable sources for two years cleared the state Legislature on Wednesday. It was sent to Republican Gov. John Kasich for his expected signature.

Ohio's renewable goals were touted for their ability to reduce dependence on fossil fuels, such as coal.

Opponents of the targets in the Republican-led Legislature say they're driving up electricity costs by imposing costly government mandates on utility companies.

Brown called the competing goals of reduced pollution and lower electric prices "mutually exclusive." When electricity is cheaper, people use more. That increases demand — and carbon-based pollution — from coal-fired power plants. When emitting carbon becomes more expensive, in conjunction with renewable-energy mandates or otherwise, electricity costs rise.

"If you're an environmentalist, high electric rates are a good thing — they discourage energy use," said Brown, a former member of the Public Utilities Commission of Ohio. "That's why, for consumer advocates (seeking to reduce bills) and environmentalists, it's almost impossible to make common cause — because their agendas are separate."

At the same time, the impact of renewables on the electricity market has been "really bizarre" and sometimes counterintuitive, Brown said.

In Germany, for example, carbon emissions soared after renewable standards were put in place, he said. Factors can vary, but he said one reason that can happen is that utilities increasingly reliant on unpredictable supplies of solar or wind energy are forced to operate their aging coal plants in constant anticipation of peak demand.

On the flip side, an analysis commissioned by business group Ohio Advanced Energy Economy and consumer group Ohio Partners for Affordable Energy found residential and industrial electric bills would rise if Ohio's targets are removed.

The analysis tied expected increases to the rollback of cost-saving energy efficiency programs that have resulted in consumer savings of more than $1 billion.

House Public Utilities Chairman Peter Stautberg, a Cincinnati Republican, said during Wednesday's floor debate that cost savings from efficiency programs are maxing out.

"The low-hanging fruit is disappearing," he said. "Consumers can only consume so many light bulbs, and only so many refrigerators can be thrown away."

Ohio's 2008 law requires utilities to generate a combined 25 percent of their energy from renewable or advanced energy sources by 2025. It also set energy efficiency goals for utility customers. Under a compromise brokered by Kasich, the new bill calls for mandates to continue in 2017 unless the General Assembly acts on recommendations by a newly created 12-member legislative commission.

Kasich spokesman Rob Nichols said after a lot of hard work Ohio's got a solid plan for examining its progress on energy thresholds.

"Ohio needs more renewable and alternative energy sources, and it needs a strong system to support them as they get started," he said. "It's naive, however, to think that government could create that system perfectly the first time and never have to check back to see if everything's OK."

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