The Public Utilities Commission of Ohio (PUCO) has adopted rules that implement the alternative energy portfolio standard created by Senate Bill 221, Ohio’s electricity law. Ohio’s alternative energy portfolio standard requires that by 2025, at least 25% of electricity sold in the state by electric distribution utilities and electric services companies must be generated from alternative energy resources. One half of these renewable energy facilities must be located in Ohio.
The rules also incorporate new requirements for energy efficiency, long-term forecast and greenhouse gas reporting and carbon dioxide control planning.
At least half of this energy must come from renewable energy resources, including wind, biomass, hydro and fuel cell, and a minimum of 1.5% must come directly from solar resources.
The rules adopted on April 15, 2009 by PUCO put into practice annual benchmarks, or incremental percentage requirements, that electric utilities and service companies must meet to fulfill the renewable portion of the portfolio standard. These benchmarks are abridged in the chart below.
Electric utilities and service companies may use renewable energy credits (REC) to satisfy all or part of the renewable energy benchmarks. One REC represents the environmental attributes associated with the generation of one megawatt hour of electricity from an eligible renewable energy facility.
The PUCO staff will annually review compliance with the most recent benchmarks and file a report of its findings with PUCO. PUCO will then provide the Ohio General Assembly with an annual update on statewide compliance with the benchmarks and suggestions for encouraging the use of alternative energy resources in a manner that considers technology, costs, job creation and economic impact.
In addition to outlining Ohio’s alternative energy portfolio standard, the rules require electric utilities to deploy all available cost-effective energy efficiency measures. The PUCO adopted the Total Resource Cost Test to determine cost-effectiveness. Utilities are required to undertake a review of potential programs and then propose a portfolio plan for PUCO approval. Utilities will provide annual status reports to demonstrate compliance with benchmarks and approved plans.
The rules also require all electric generating facility owners in Ohio to report greenhouse gas emissions to the international climate registry. Generating facility owners must file an environmental and carbon dioxide control plan annually with the PUCO and the Ohio EPA.
On May 1, 2008, Governor Ted Strickland signed SB 221 into law, marking the one year anniversary of the date he outlined his Energy, Jobs, and Progress Plan to stabilize electricity prices, create green jobs and increase Ohio’s use of alternative energy. The bill took effect on July 31, 2008, and the PUCO immediately commenced its rulemaking process.
On Aug. 20, 2008, the PUCO issued for comment PUCO staff proposed rules on the energy portfolio standard. Dozens of stakeholders filed comments with the PUCO. These diverse parties included Ohio’s electric distribution utilities, consumer and environmental advocates, alternative energy manufacturers and developers, local governments, electricity marketers, trade and business associations and industrial energy customers.
The parties have 30 days to file for rehearing of the PUCO’s decision. Upon completion of the rehearing process, the PUCO will file the rules with the Joint Committee on Agency Rule Review. The rules will take effect on the earliest date permitted by law.
“Ohio is one of 29 states and the District of Columbia that has adopted an alternative energy portfolio standard and one of only 14 that has a specific provision for solar resources,” PUCO Chairman Alan R. Schriber stated. “The ambitious standards set forth by Gov. Ted Strickland and the legislature in SB 221 will help provide Ohioans with cleaner, renewable energy and position our state to reap the rewards of the new green economy.”