Ohio Bill Would Eliminate Alternative Power Mandates

Ohio Bill Would Eliminate Alternative Power Mandates
September 26, 2011

Ohio State Sen. Kris Jordan (R-Powell) has introduced a bill to would repeal the state’s Alternative Energy Portfolio Standard. The Portfolio Standard mandates electric utilities generate 25 percent of their power supply from expensive advanced and renewable energy resources by 2025. 

Wrong Time for Costly Mandates

Sen. Jordan says now is not the right time to impose the higher energy costs necessitated by the program.

“This mandate unnecessarily distorts the energy market and forces power companies to use expensive new technologies that have been shown to drive up energy costs,” explained Jordan. “Our state has lost hundreds of thousands of jobs in the last decade, and unnecessarily driving up energy costs isn’t going to help our state’s families and businesses.”

Jordan cited a recent study by the Beacon Hill Institute that found the Alternative Energy Portfolio Standard will cause Ohio to lose 9,753 jobs by 2025.

“[The Beacon Hill Institute study] shows this mandate will cost Ohio energy consumers $8.629 billion in higher energy costs over a ten-year period between 2016 and 2025, including more than $1.4 billion in 2025 alone,” said Jordan. 

Alternative Energy Failing

According to the Energy Information Administration, 87 percent of the electric power industry in Ohio is powered by fossil fuels. Another 12.3 percent comes from nuclear power. The remaining 0.7 percent is derived from alternative fuels such as wind, solar, wood, biomass, and conventional hydroelectric. In order to meet the state’s Alternative Energy Portfolio Standard, state residents would have to purchase much higher quantities of more expensive alternative energy.   

Politics Driving Mandates

The Alternative Energy Portfolio Standard was signed into law by former Gov. Ted Strickland (D) in 2008. Sen. Jordan says the “25 by 25” target was a political decision and not based on the actual feasibility of implementation.

“When you look deeper into the law, not only is there a requirement that 12.5 percent of production come from renewable sources, there’s also a carve-out specifically for solar energy,” said Jordan. “It’s tough to determine exactly what drove the decision on the specific targets, but decisions like these are inherently arbitrary and political in nature.”

Jordan questions the need for a mandate at all, pointing to meetings he has had in the last few weeks with renewable energy companies.

“[Renewable energy companies] have told us there’s a market for this technology, and certain energy producers in Ohio that are exempt from the requirement are actually purchasing their technology because, in part, that’s what consumer’s want,” said Jordan. “Those companies are reacting to market conditions, which calls into question the very need for a mandate if this is what consumers and energy producers are already demanding.”

John Monaghan (jmonaghan@heartland.org) is the legislative specialist for energy and environment issues at the Heartland Institute.