Progress on Hold
The Freeze on Ohio’s Clean Energy Law Could Mean Big Costs and Dirtier Air

Executive Summary

Ohio’s Clean Energy Law, passed in 2008, put Ohio on the fast track toward more clean energy and more energy efficiency – boosting the economy and providing big electricity bill savings for consumers. The law set requirements for energy efficiency and renewable energy for each of the state’s four investor-owned utilities (IOUs), led to the launch of creative programs to update old technologies with new energy-saving devices, set Ohioans up for long-term energy savings, and helped Ohio transition away from its reliance on dirty energy sources to a clean energy economy.

Over just six years, the Clean Energy Law made Ohio a national leader for clean energy manufacturing, while reducing carbon emissions and reducing energy waste. Yet despite this record of success, in 2014, the Ohio Legislature and Gov. John Kasich watered down and stalled the law by passing Senate Bill 310 (SB 310), the clean energy freeze.

SB 310 froze energy efficiency and renewable energy standards at their 2014 rates for two years, while crippling key provisions of the efficiency standard. Just days after the passage of SB 310, House Bill 483 was passed, which made new wind farms dramatically harder to develop.

Ohio has a great deal to lose from the freeze and rollback of the Clean Energy Law – and stands to lose even more if the law is permanently frozen or repealed. In just the second year of the freeze, according to this report’s analysis, Ohioans will miss out on energy savings worth as much as $218 million, while the state will produce up to an additional 3.7 million metric tons of carbon dioxide pollution. If the freeze is left in place, the costs will rise, leading potentially to an extra 27.7 million metric tons of carbon dioxide emissions in 2025.

Ohio officials should move quickly to reinstate Clean Energy Law programs and otherwise support the growth of clean energy in Ohio. Restoring the Clean Energy Law will reduce pollution, save Ohioans money, and grow the economy. It will also help bring Ohio into compliance with the Environmental Protection Agency’s draft Clean Power Plan, which calls for Ohio to reduce carbon emissions from electric power plants by 28 percent by 2030.

The Clean Energy Law has delivered economic and environmental benefits to Ohio.

  • According to a study by Ohio State University and the Advanced Energy Economy Ohio Institute, the law has already reduced Ohioans’ energy bills by 1.4 percent and stimulated $160 million in economic activity.
  • The same study found that without the law, Ohio would have emitted an extra 4.3 million metric tons of carbon dioxide in 2012, equivalent to putting nearly 900,000 vehicles on the road for a year.
  • Ohio now leads the nation in wind manufacturing, with more than 60 facilities. And according to the Solar Energy Industries Association, $72 million was invested in Ohio for solar power installations in 2013. One state-commissioned study found that Ohio’s alternative energy economy accounted for more than 31,000 jobs in 2012.
  • In 2013, Clean Energy Law energy efficiency programs saved more than 6,000 gigawatt-hours of electricity, enough to power more than one in 10 Ohio homes.
  • The Clean Energy Law has helped drive the installation of 432 MW of wind energy capacity, which would generate enough electricity to power 100,000 homes.

The clean energy freeze could reverse Ohio’s recent growth in renewable energy, while almost completely erasing Ohioans’ opportunities to save energy – and money – through energy efficiency programs. According to the analysis in this report, the freeze will bring significant costs to Ohio consumers and the environment. And under a scenario in which the freeze is extended through 2025, those costs would grow dramatically:

  • In just the second year of the freeze, in 2016, Ohioans will miss out on more than 1,900 GWh of energy efficiency savings, and 2,600 GWh of additional renewable energy, leading to an extra 3.7 million metric tons of carbon dioxide emissions.
  • If the freeze is extended through 2025, stagnant growth of renewable energy and energy efficiency could mean an extra 27.7 million metric tons of carbon dioxide in that year alone, and an extra 159 million metric tons of carbon dioxide emitted cumulatively between 2015 and 2025.
  • If the freeze on renewables is extended to 2025, Ohioans could miss out on the generation of enough clean, renewable energy to power more than 1 million typical Ohio homes, as well as the installation of more than 38,000 solar roofs across the state.
  • If the freeze on efficiency is extended to 2025, Ohioans could miss out on more than 17,500 GWh of energy efficiency savings in that year alone, electricity worth more than $2.5 billion at today’s rates.

Figure ES1. Through 2025, Ohio Could Miss Out on Reducing Carbon Dioxide Pollution by 159 Million Metric Tons

 

 

Under a permanent freeze, Ohioans would miss out on big energy savings in every corner of the state.

  • The Cleveland metropolitan area could miss out on 7,226 GWh of electricity savings by 2025. That much electricity costs $841 million at today’s rates.
  • The Cincinnati metropolitan area could miss out on 4,026 GWh of electricity savings by 2025. That much electricity costs $431 million at today’s rates.
  • The Dayton metropolitan area could miss out on 1,877 GWh of electricity savings by 2025. That much electricity costs $251 million at today’s rates.
  • The Toledo metropolitan area could miss out on 1,185 GWh of electricity savings by 2025. That much electricity costs $136 million at today’s rates.

The rollback of the Clean Energy Law has already stalled Ohio’s progress on clean energy. FirstEnergy has announced the elimination of most of its programs to help consumers use energy more efficiently, while the solar energy market in the state has been “coming to a halt,” according to one solar business owner.

These costs and missed opportunities are avoidable. To continue Ohio’s progress toward a 21st century clean energy economy, the Energy Mandates Study Committee should recommend fully reinstating the clean energy standards passed in the original Clean Energy Law legislation(SB 221).

State leaders should:

  • Restore Ohio’s commitment to increased use of renewable energy and energy efficiency by restoring the clean energy policies originally passed in SB 221.
  • Take clean energy to the next level by setting a goal of getting 25 percent of their energy from renewables by 2025, including three percent from solar energy.
  • Expand the state’s commitment to reducing wasted energy through measures that ensure the capture of all cost-effective energy efficiency.  

In order to achieve the full benefits of clean energy, the Ohio EPA should also develop a robust State Implementation Plan to meet the U.S. EPA standards limiting global warming from power plants.