Ohio Utilities Commission Derails Expensive Solar Project

Published March 6, 2013

Ohio state officials struck a severe blow to a plan to construct the largest solar-panel array east of the Rockies when the Public Utilities Commission of Ohio found utility American Electric Power “did not prove that the project is needed.”

Solar Surcharge Rejected
Developers proposed constructing the 49.9 megawatt Turning Point Solar project on 500 acres of land near Zanesville in southeastern Ohio. American Electric Power (AEP) joined forces with Agile Energy in plans to deploy 225,000 solar panels on the site. Developers estimated the project would cost $250 million, and it was AEP’s scheme to recoup this sizable investment that contributed to Turning Point’s undoing.

AEP sought Public Utilities Commission of Ohio (PUCO) approval to pass along the cost of Turning Point Solar through an extra charge ratepayers would see on their power bills.  By a 3-1 vote, however, PUCO rejected the plan, leaving AEP no way to pay for the project.

As Ohio moves toward energy deregulation, the idea of imposing mandatory charges on ratepayers to finance projects such as Turning Point Solar is falling rapidly out of favor.  Also, had PUCO approved the scheme, a coalition of electricity consumers would likely have challenged the proposal in court, arguing the plan gave an unfair advantage to one energy sector over others.

Conventional Energy Fuels Economy
Unveiled in the waning weeks of the unsuccessful 2010 reelection campaign of then-Gov. Ted Strickland (D), Strickland and renewable energy advocates hailed Turning Point Solar as a job creator and proof of Ohio’s commitment to green energy. Turning Point Solar’s supporters said the project would create as many as 300 permanent jobs and 300 temporary construction jobs.

Ironically, developers planned construction in the Utica Shale area of eastern Ohio.  Oil and natural gas production in the Utica Shale is fueling a vibrant economic rebound in an area that had become a symbol of the Rust Belt.

States Repealing Mandates
Ohio is one of 29 states with renewable power mandates. Ohio law requires renewable power to comprise 12.5 percent of the state’s electricity mix by 2025, with a 0.14 carve-out for solar power by 2014 and a 0.5 percent solar carve-out by 2024.

Todd Wynn, energy, environment, and agriculture task force director at the American Legislative Exchange Council, notes many states are considering repealing or amending renewable power mandates in light of higher-than-promised costs.

“Since most state renewable energy mandates have been on the books for at least a few years now, state legislators around the country are starting to examine the effectiveness of these programs,” said Wynn.

“What most have found is that the higher costs associated with less-reliable, politically preferred sources of electricity are being thrust upon ratepayers and taxpayers regardless of their level of income or circumstances. That Ohio now struggles to meet the solar-specific mandate is further evidence that these mandates were poorly thought out from the beginning,” Wynn explained.

Bonner R. Cohen, Ph. D. ([email protected]), is a senior fellow at the National Center for Public Policy Research.