In 2014, Ohio became the first state to take a step back from its commitment to state support for renewable energy. Gov. John Kasich signed legislation temporarily freezing, at 12.5 percent, the percentage of electricity generated from renewable power sources utilities were required to provide.
This delay came amid claims a significant percentage of increased electric power costs Ohio ratepayers had experienced in recent years was due to the renewable mandate. The freeze was intended to allow Ohio time to study whether the benefits from renewable power were worth high costs associated with it.
A peer-reviewed economic study released last week may have answered the question of just how much renewable power will costs Ohioans. The study from the Institute of Political Economy at Utah State University estimates Ohio’s renewable power mandate standard will cost electricity customers up to $1.92 billion between now and 2026.
In a news release announcing the study’s release, Ryan Yonk, one of the study’s authors said, “This study, one of the strongest and most widely examined ever conducted on RPS, shows there is significant evidence to suggest RPS mandates were not helping local economies. Rather, they were causing economic damage to families and businesses.”
The study reports Ohio’s renewable mandate will reduce personal income by $258 million between now and 2026. Ohioans can expect to receive approximately $3,800 less per household than households in states without a renewable mandate. In addition, the RPS could result in a loss of nearly 3,600 jobs.
Study Could Determine Renewables’ Fate
The Utah State study comes as Ohio legislators await a report from the Energy Mandates Study Committee, formed late last year to study alternative and energy efficiency standards in the state.
Originally put into place in 2008, the Ohio Renewable Energy and Energy Efficiency Portfolio Standard required utilities to derive 25 percent of their power from renewable sources by 2025. Required increases in renewable power were put on hold when Kasich signed the bill temporarily freezing the rate last year. If the legislature does not act, in 2016 the previous standard will come back into force, though the timeline for meeting the 25 percent renewable level is pushed out two years.
The Energy Mandates Study Committee report is due by Sept. 30, and many expect its findings will determine largely determine what happens to the state’s renewable requirements when the two-year freeze comes to an end in December 2016.
Trish Demeter, managing director of energy clean air programs at the Ohio Environmental Council told OhioWatchdog.org, “I don’t think we can anticipate that the standards will come back at the same level that they have been before they were frozen.”
“I think I would be naïve to say that, oh yeah, they’ll totally come back,” Demeter continued. “That may not be likely but we may see voluntary standards, we may see lower targets, we may see a totally different model for how utilities are being compelled to invest in renewables and efficiencies, I just don’t know.”
H. Sterling Burnett, Ph.D. ([email protected]) is a research fellow with The Heartland Institute.
Randy Simmons, Ryan Yonk, Tyler Brough, Ken Sim, Jacob Fishbeck, “Renewable Portfolio Standards: Ohio,” April 29, 2015; https://heartland.org/policy-documents/renewable-portfolio-standards-ohio