The following article was originally published in the Ohio Capital Journal and published on News5Cleveland.com under a content-sharing agreement.
Ohio lawmakers appear to have a deal on a wide-ranging energy bill meant to increase power production in the state. They’re returning from a two-week recess with an amendment sanding off the differences between House and Senate proposals approved last month.
The Senate Energy Committee meets Tuesday to introduce the changes and likely put them to vote. Both chambers will be in session the following day and could presumably vote on final passage in back-to-back sessions.
The proposal offers tax breaks for companies investing in power plants and retools the ratemaking process for energy distribution companies. To further encourage new entrants, the measure reinforces barriers keeping the regulated monopolies running distribution out of the production market.
Where the tweaks land
From the outset, House and Senate lawmakers have worked along parallel tracks advancing similar, although not identical, versions of the same bill. Several core ideas have persisted throughout, like eliminating the coal plant rider from 2019’s HB 6.
Along the way, lawmakers proposed a few sideline initiatives. The House bill included a pilot for small cooperative power generation facilities; the Senate added in a program loaning schools money for renewable energy improvements. The Senate’s idea survived. The House’s didn’t.
For other provisions, the chambers offered different responses to the same question. The proposals incentivize investment with a tax break. Tangible personal property tax gets levied on the equipment used to generate electricity. The House proposed reducing the rate from about 25% to 7%. Senators meanwhile suggested eliminating it altogether for equipment brought online after 2025.
The amendment goes with the 7% mark and includes provisions to discourage companies from claiming the reduced rate after making modest changes or upgrades to existing facilities.
Another major element of the legislation has to do with the regulatory timeline. Critics argue Ohio’s ratemaking process takes longer than most other states, so lawmakers proposed a “shot clock” for those decisions. The House set the ceiling at 360 days, but the Senate’s 320-day deadline is the one carried forward in the amendment.
Cutting room floor
A last-minute change to what qualifies as a ‘major’ facility isn’t included in the amendment. House lawmakers lowered the cut-off for electric transmission lines to put more of them under the Ohio Power Siting Board’s authority. Critics argued those investments get very little oversight and offer a path for utilities to over-charge customers for the upgrades.
Ohio Consumers’ Counsel Maureen Willis is urging lawmakers to “reconsider” a different provision related to consumer refunds.
“When we say ‘reconsider’ we mean delete it,” her written testimony states.
If the state Supreme Court determines a charge was unlawful, the legislation allows consumer refunds for any of those charges collected after the court decision. Willis questioned the idea of barring refunds on charges determined to be illegal.
What’s more, she argued “it may have the unintended effect of interfering with consumer refunds in pending appeals where charges have been collected ’subject to refund.’”
One such case against Dayton-area AES Ohio is currently working through the appeals process. Because state regulators approved a $76 million charge — subject to refund, the Consumers’ Counsel case could return more than $300 to each customer. But if the amendment’s cut off is in place, those refunds would be in jeopardy.
“The current refund provisions risk perpetuating past injustices where consumers bore the cost of unlawful utility charges without remedy,” Willis wrote.
