Article published May 02, 2008
RENEWABLE POWER SOURCES
Strickland signs 'hybrid' energy bill
Ohio law seeks to keep a lid on electricity prices
By JIM PROVANCE
BLADE COLUMBUS BUREAU CHIEF
COLUMBUS - Gov. Ted Strickland signed an energy bill yesterday mapping Ohio's energy course for the foreseeable future, with the governor and state lawmakers keeping their fingers crossed that they've managed to keep a lid on electricity prices.
The law, which will take effect in three months, also seeks to make Ohio a major player in wind, solar, and other renewable energy sources. It attempts to force a market for renewable power by requiring utilities to find at least 25 percent of their power from advanced technology and renewable sources by 2025.
Norm Johnston, chairman of a consortium of companies called Ohio Advanced Energy, said northwest Ohio is uniquely positioned to take advantage of the renewable energy components.
"Singlehandedly, I think Toledo, with the expertise at the University [of Toledo] and the glass companies that are there, is taking us from being the rust belt to being the renewable belt," he said.
But the biggest push of the bill was to control electricity price spikes that have plagued other states when they have deregu-lated their electric utilities.
"Overall, the state has dodged a bullet by not going to market next year which has resulted in substantially higher prices in other states," said Ken Rose, a Columbus-based expert on electric industry issues formerly affiliated with Ohio State University."It will depend on what the [Public Utilities Commission of Ohio] decides to do, but, overall, given the direction that the House was headed in, this is definitely an improvement," he said.
On Jan. 1, regulatory plans that have largely controlled electricity prices for nearly a decade will expire for most Ohio utilities.
That means higher bills are likely in the offing for most customers, but lawmakers hope they've at least cushioned the blow.
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"It doesn't mean rates will go down, but it's more likely that rates will be based on the cost of generation rather than on a wholesale market beyond the control of the state," said Mr. Rose.
And even with the mandates to force a market for renewable power, the bill lets utilities off the hook when it comes to full compliance with those standards if they can demonstrate that their initial steps to comply would raise consumers' bills by 3 percent or more - a move that disappointed environmental groups.
Advanced technology sources include such things as fuel cells, cleaner coal, and advanced nuclear.
Renewable power applies to such sources as wind, solar, and landfill gases.
Solar is the only form of energy that has a special carve-out in the bill. While at least half of the overall 25 percent advanced energy portfolio must consist of renewables, at least half a percentage point of that 12.5 percent renewable component must come from solar, a nod to northwest Ohio's technological advances in that area.
Mr. Strickland signed the bill a year to the day after he first outlined his goals in a speech before the Toledo Regional Chamber of Commerce.
"This bill will ensure predictability and affordable energy prices and retain state control when necessary to protect Ohio jobs and businesses," he said yesterday.
While House Republicans succeeded in putting more teeth into the governor's renewable mandate, the governor and the Republican-controlled Senate largely won the battle on the financial side, succeeding in giving state regulators the final say on whether utilities may pursue an open market rather than regulation.
Ellen Raines, spokesman for FirstEnergy, the parent firm of Toledo Edison, said her company plans to file a proposed rate plan before June 30, and will follow that with a separate market rate offer.
The utility has said from the beginning that it would prefer the open market to renewed regulation.
"The ultimate outcome was a piece of legislation that represents a compromise,"Ms. Raines said. "It is a true hybrid, which is what the administration set out to accomplish."
The bill will end surcharges that customers have been paying for eight years to pay off decades-old power plants and other past utility investments.
"That goes down, but other costs are increasing, so it's not clear how it plays out in the wash," said Mr. Rose.
Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.
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