Governor Strickland proposed sweeping reforms to the way deregulated electric companies handle our business today (8/29/07). He called for rule changes to promote more competition among wholesale providers, but also action to spur the state's renewable energy economy.
Most notably, the democratic governor called for the creation of a Advanced Energy Portfolio Standard (AEPS) which mandates that electric utilities produce 25% of the state's power from so-called advanced resources (which includes "clean" coal and nuclear), but with at least 12% of that coming from renewable resources such as wind, solar and geothermal by 2025. All of Strickland's proposals need legislative approval.
If it passes, an AEPS would be welcome news for those working on renewable energy projects, such as Cuyahoga County's offshore wind farm and R&D center. That project promises to invest millions in public funds in the hopes of attracting and spurring a homegrown renewable systems manufacturing. Analysts looking at the county's deal and at the efficacy of AEPS's in other states have said unequivocally that it dramatically improves their ability to attract renewable energy companies (in Pennsylvania, an AEPS is credited with attracting Spanish wind power company Gamesa to open a plant, and in Iowa it's credited with attracting three wind turbine manufacturing facilities: Bergey Wind Power, Wind Turbine Industries and Southwest Wind Power).
How important is an AEPS for Ohio? Nonprofit group Environment Ohio produced a jobs study this week that argues forcing utilities to generate 20 percent of their total production with wind turbines by 2020 would create the equivalent of 3,000 permanent jobs, increase wages paid by a cumulative net total of $3.7 billion and prepare Ohio for global warming.
Ohio energy policy on WCPN
Marc Lefkowitz Says:WCPN hosted a conversation this morning about Ohio’s energy policy and pending legislation which calls for a Renewable Portfolio Standard (an RPS is generally considered the policy that can most effectively jump start the state’s renewable energy business and which is being threatened in the Senate bill by a lack of benchmarks, i.e. utilities will not be forced to report on their progress toward producing green power until 2025 in the Senate version).
Renewable energy advocates might take heart in House Speaker Jon Husted’s comments that he worries having no benchmarks and promises to not raise rates are at odds with having a renewable portfolio standard in Ohio. Husted promises to resolve the issue in the House bill.
I’d like to correct some misstatements from some callers to this morning’s show. The caller who said that Ohio is a bad state for solar because it’s too cloudy would be pleased to know that Ohio has more solar potential—more sunny days —than the country of Germany, which has the largest global use of PV solar power. "If you look at a map of Germany it looks more like Alaska,” Bill Decker, of Decker Homes said at the Entrepreneurs for Sustainability Solar Challenge.
Also, Erika Weliczko founder and president of REpower Solutions, a local renewable energy provider, figures that 1 MW of solar power is comparable to the energy content of 705 barrels of crude oil. In order for Ohio to produce 1 MW of solar power, the state would only need a little more than 2.2 acres of solar arrays.
On the topic of how renewable energy will impact consumer rates, let’s look at all 24 states that have passed an RPS, not just California (as the gentleman from the chemical lobby suggested, which may not be a good example because of the volatility of that market because of the Enron scandal), and see what impact RPS have had on rates.
One more word about California’s RPS—according to the head of that state's environmental protection agency, the introduction of an RPS will produce billions in customer rebates. While covering the national Solar conference in Cleveland, I wrote:
If I’m to understand correctly, there are ways of dealing with the short term rate spikes, and one of them is already in place in Ohio.
Back in July 2007, Ohio’s big three investor-owned electric companies—AEP, Duke and First Energy (in that order)—announced they will offer a Renewable Energy Credits program RECs. With ‘RECs’, you and I as rate payers volunteer to pay the premium, which could be as much as a two cents per kilowatt hour, for renewable energy.
If the market (you and me) is willing to fork over a premium for green power, producers should reciprocate and agree to buy a certain percentage of renewables. Akron-based First Energy is already buying green power for its customers in Pennsylvania because the state has an RPS on the books (incidentally, the Keystone State’s RPS lured Gamesa, a Spanish company that makes wind turbines, to open a manufacturing plant in two abandoned steel mills).
How come we’re not hearing more about how RECs will impact on rates while introducing renewable energy in Ohio. When are the utilities doing business in Ohio introducing the program for customers to volunteer to pay premiums for green energy?
Lance Traves, managing principal at Labyrinth Management Group, finds another reason to support Gov. Strickland's energy plan in this week's Crain's Cleveland Business, where he writes:
Update, 12.6.07
Ohio lawmakers propose expanding drilling in state parklands as part of energy package, the PD reports. So, it looks like drilling for more natural gas in the southeast part of the state, i.e. Wayne County, is being floated as the compromise to include a renewable portfolio standard. At the same time, State Rep. Jim McGregor, a Columbus-area Republican, is proposing Ohio utilities produce 22 percent by 2020 from renewable sources only (instead of just 12%). Is this an acceptable compromise?
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