At a Wednesday ceremony, John Kasich didn’t just issue the oath of office to Tom Johnson, the new chairman of the Public Utilities Commission of Ohio. The governor uttered some intriguing words about the state’s 15-year experiment with electricity deregulation.
“I will tell you it’s a challenging time in a state that has gone through this whole business of trying to figure out what deregulation actually means,” he said.
Kasich added: “The ideological effort to deregulate, I’m not so sure it’s the smartest thing we’ve done in the state of Ohio. But we are where we are, and we can’t go backwards now. So, it’s onward in a deregulated environment, and we’ve got to figure it out.”
Part of that figuring out involves the future of the state’s renewable and energy efficiency standards, now the subject of a furious debate at the Statehouse. Actually, it has been building since late 2012, when FirstEnergy began to push the idea of freezing the requirements. The Akron-based power company argues that the standards, among other things, are too costly, jeopardize reliability and harm the competitiveness of the state.
Under the freeze, the state would halt progress toward reaching two goals by 2025: generating one-quarter of its electricity from renewable and advanced energy sources, and reducing electricity consumption by 22 percent through efficiency measures.
The debate took a long detour, lawmakers weighing legislation that would weaken severely the standards. The effort collapsed. Now the discussion has returned to a freeze, which would have the effect of killing the standards.
A provision calls for a study committee to examine a path forward. Hard to see a consensus forming in this legislature around new requirements.
One voice that has been conspicuously absent from the discussion has been that of the governor. Yet so much about the standards fits into his agenda. Early in his term, he conducted an energy summit, resulting in legislative action that built on the incentives for renewable and advanced energy, plus improved energy efficiency. He successfully pressed for including cogeneration technologies (combined heat and power, and waste energy recovery).
Go to the website of JobsOhio, the governor’s privatized economic development agent, and you’ll find the state touting its prowess in this realm. It boasts: “ … Ohio ranks No. 1 in the nation for renewable and advanced energy, bringing in more renewable energy facilities than any other state.”
More: “Ohio is committed to leading the world to energy independence with advanced energy innovation, groundbreaking manufacturing processes and low-cost deployment of these assets to fulfill current and future demand for alternative energy solutions.”
Such is the thinking of 11 leading companies, including Honda, Owens Corning and Johnson Controls, with almost 30,000 employees in Ohio. They recently wrote lawmakers stating their opposition to the freeze. They stressed how the efficiency requirements bring savings and belong as “part of Ohio’s plan to attract economic investment and encourage growth.”
The governor often has pointed to the importance of “certainty” for businesses. Where is the certainty for Hull & Associates, its vice president for alternative energy explaining to lawmakers this month that an investment of $5 million in renewable energy assets would be at risk with a moratorium? The state has roughly 400 new advanced energy companies, with a work force of 25,000, that would be affected.
Might there be interest in a recent poll, even for a governor who insists he doesn’t play politics? A survey by Ohio Advanced Energy Economy found that 83 percent of Ohioans support energy efficiency programs, even at a small monthly cost. Sixty-six percent would more likely back a candidate who favors greater use of renewable energy.
The poll may be easy to dismiss. More difficult is the support of the Ohio Manufacturers Association for the standards, alert to falling prices for solar and wind energy, and to energy efficiency as the most cost-effective way to meet the country’s energy needs.
A recent study for PJM concluded the transmission grid operator could handle up to 30 percent of its power from wind and solar.
The many complexities and moving parts of the power industry suggest the pieces are there for a compromise: Meet the needs of power companies required to sell less of their product and those of large industrial firms already heavily invested in efficiency. Yet still position Ohio to take advantage of a changing electricity market.
Enough is at stake to warrant the governor speaking for the state as a whole, not to mention his own approach to energy policy. Approval of the proposed freeze risks Ohio losing opportunities. Is that what the governor wants? If he doesn’t think it’s smart, he should say so.
Douglas is the Beacon Journal editorial page editor. He can be reached at 330-996-3514, or emailed at firstname.lastname@example.org.