Supporters of an energy bill that encourages new investment in the state’s electricity market spoke before Ohio’s Senate energy committee on Tuesday.
In response to a number of energy-intensive development projects throughout the state, Ohio Senate Bill 2 was introduced. HB 15 is a comparable legislation in the Ohio House.
As artificial intelligence tools become more popular, Ohio has seen a boom of data centers in addition to Intel and Honda industrial plants. In order to facilitate the establishment of new power plants, both proposals take action to remove regulatory obstacles. To prevent major firms from driving out new competitors, they also draw clear lines between power distribution and generation.
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SB 2 and HB 15 are not the same proposal, even though they both aim to address the same issues. Time constraints to expedite the approval of new facilities or rate-setting are among the additional conditions included in the Senate proposal.
Ohio Consumers Counsel Maureen Willis highlighted a clause requiring an instant reimbursement of electric rates that the state supreme court deems unfair as one of the Senate version’s many advantages.
In order to demonstrate to committee members the precise locations and cases of the $1.5 billion in charges, I included this vibrant chart with my evidence.
She remarked, “This provision is a beautiful provision.” It’s a pinch-me kind of provision.
Willis commended other pro-consumer measures, such as the removal of electric security plans, which enable utilities to add riders to customers’ bills in order to fund system repairs, and protections for customers on variable rate contracts.
Later, Tim Ling of Plaskolite, a thermoplastic producer based in Columbus, added that electric security plans are excessive. “Companies can bill for almost anything,” he said, joking on behalf of the Ohio Manufacturers Association.
How could PUCO not accept a rider for the children when a utility would offer one dubbed the “For the Children” rider? “I said.” Furthermore, nothing will be given to any children at all after the millions of dollars raised under this For the Children rider are collected.
He continued by saying that they have genuinely outlived their claimed function and are now only an expensive way to raise customers’ electricity bills above market rates.
Despite her approval of the aforementioned features of SB 2, Consumers Counsel Willis has a number of reservations about the bill. She was concerned about the measure’s shot clock effect on regulatory procedures and an unproven consumer choice billing program.
She contended that consumers would suffer if the utilities’ planned prices were allowed to take effect on the 275th day without any remedy.
The deadline, however, wasn’t the issue in her opinion; she advised against making the new rate permanent. Under the law as it stands, utilities are free to set their own rates, but if regulators decide that the new rate should be lower, customers will receive a refund for the difference.
Alexandra Denney, vice president of government relations for the Ohio Business Roundtable, supported the rate-setting timeline.
“These rate proceedings in Ohio typically take 17 months,” she said. New York and California are the next closest states, taking 15 months, although several of our bordering states are closer to 12.
Denney contended that the situation on the ground might have altered by the time rates go into effect: We think that a more up-to-date and accurate evaluation of that investment will ultimately save consumers money.
She explained that after gathering feedback from over 30 of its members, her organization conducted a research on the state’s energy competitiveness, and one of the main conclusions was that it took too long to get up and running.
“Everyone in our work group agreed that there are many things we can do in the energy sector to promote more generation, but if we don’t change our siting and permitting process, none of that will have any effect,” she added.
The group is okay with the Senate bill’s 120-day schedule, but their analysis suggested that siting questions should be resolved in 90 days.
The one item that was accepted by all? The subsidies supporting outdated coal plants owned by Ohio Valley Electric Corporation that were authorized as part of Ohio House Bill 6 in 2019 need to terminate.
The former Ohio House Speaker was sentenced to 20 years in prison as a result of a $61 million political bribery scandal and a $1.3 billion utility bailout that revolved around that legislation. Although the bill’s nuclear subsidies for FirstEnergy have been removed, other provisions of the law—such as the destruction of Ohio’s renewable energy portfolio and the subsidies for coal plants—remain in effect.
The subsidies would be eliminated, but not right away, according to the Ohio Senate proposal. Rather, if the charges are included in an already-existing electric security plan, they are grandfathered in. As a result, some customers may continue to pay such riders through 2028.
Tom Bullock, executive director of the Citizens Utility Board Ohio Advocacy Group, suggested that the subsidies ought to stop sooner.
Customers who have been paying these subsidies to these 70-year-old plants since 2009—one of which is, of course, in Indiana—would save $445,000 a day if this action were taken.
School district representatives visited to push senators to stick with the Senate’s property tax policy, especially from Perry and Ottawa Counties, which are home to Ohio’s two nuclear facilities. While the Senate version would only exempt new facilities, the House version would exempt tangible personal property taxes for all electric generation.
As their nuclear reactors have matured, counties like Perry and Ottawa have had to tighten their belts since tangible property can devalue over time.
According to Cajon Keeton of the Benton-Carroll-Salem school system in Ottawa County, their plant was worth $184 million in 2016. It is approximately $14 million today.
As a school system, that has meant that the tax generated $6.3 million in income annually in 2016, according to Keeton. That is slightly more than half a million dollars today.
Another tax proposal that would give preference to brownfields and former coal sites was lauded by advocates with the Buckeye Institute and Americans for Prosperity. AFP For five years, these project investment regions would not be subject to the tangible personal property tax on new generation or the tax on new transmission or pipeline infrastructure, according to Ohio Legislative Director Hannah Kubbins.
Follow Xoron Bluesky, a reporter for the Ohio Capital Journal.
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Eliot Pierce is a dedicated writer for ChiefsFocus.com, covering local crime and finance news. With a keen eye for detail and a passion for storytelling, Eliot aims to provide his readers with clear and insightful analysis, helping them navigate the complexities of their financial lives while staying informed about important local events. His commitment to delivering accurate and engaging content makes him a valuable resource for the community.