Energy Mandates Reform Clears General Assembly, Awaits Governor’s Signature

After a jam-packed week of activity that included multiple hearings and late-night debate, the General Assembly approved important changes to Ohio’s energy mandates by passing House Bill 554. The bill, now on its way to the governor, addresses the cost of the mandates for Ohio’s businesses by including an expansion of the ability of businesses to opt-out of a utility’s energy efficiency (EE) plans, a decrease in the ultimate electricity reduction required of utility customers by 2027 and an expansion of what energy reduction activities count towards compliance with the law.

Legislation enacted in 2014 paused any escalation in Ohio’s energy efficiency and renewable energy mandates for two years. With Ohio staring down the January 1, 2017, expiration of the two-year freeze in the escalation of the mandates, further reform in this area before the end of the year was a top priority for the Ohio Chamber.

Previously, the House Public Utilities Committee held a hearing on HB 554 during which the Ohio Chamber provided testimony. The version sent to the full House included a reduction in the end goal of EE savings to 17.2 percent by 2027, an expansion of the ability of business customers to opt-out of the costs and benefits of a utility’s otherwise mandatory EE program, and a conversion of the state’s mandates to goals for three years before their ultimate resumption.

The Ohio Chamber noted the conspicuous absence in the legislation of expanding what EE activities count for compliance. The goal of the mandate is to reduce consumption, so the law should recognize all activities that are taken to reduce energy usage. Counting more energy reduction efforts also makes the mandates less costly for businesses.

After passage by the House on Tuesday, HB 554 then moved to the Senate Energy and Natural Resources Committee for consideration. After two days of hearings, the Senate accepted several amendments to HB 554 that ultimately became part of the final bill, including the shortening of the goals period to two years and, importantly, a provision that expands what EE activities count towards compliance with the law. The Senate’s vote to approve the bill came late Thursday evening after several hours of debate during which the Ohio Chamber’s support of the reform package was highlighted.

Gov. John Kasich has previously expressed opposition to legislation that would move Ohio away from energy efficiency and renewable energy mandates. With this bill crafting a common-sense way to reduce mandate compliance costs for Ohio’s businesses, the Ohio Chamber urges the governor to sign it into law.

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