Electricity Prices Rise Dramatically Under Ohio Renewable Mandates

Electricity Prices Rise Dramatically Under Ohio Renewable Mandates
December 18, 2013

James M. Taylor

James M. Taylor is senior fellow for environment and energy policy at The Heartland Institute, and... (read full bio)

Electricity prices in Ohio have risen approximately triple the national average since Ohio enacted renewable power mandates in 2008. The sharp rise in electricity prices occurred despite promises during 2008 legislative hearings that renewable power mandates would have little or no impact on electricity prices.

In 2008 the Ohio legislature passed legislation creating the state’s renewable power mandates. Under the mandates, Ohioans must purchase 25 percent of their electricity from designated renewable sources by the year 2025.

Sharply Rising Prices
Since 2008, U.S. electricity prices have risen merely 3 percent. According to the U.S. Energy Information Administration, U.S. electricity prices were 9.81 cents per kilowatt hour in 2008. As of September 2013, the latest date for which EIA published electricity prices when this article went to press, U.S. electricity prices were 10.13 cents per kilowatt hour.

In Ohio, by contrast, electricity prices since 2008 have risen 9 percent. EIA reports Ohio electricity prices in 2008 were 8.44 cents per kilowatt hour. As of September 2013, Ohio electricity prices were 9.19 cents per kilowatt hour.

Directly Traceable to Renewables
The rise in Ohio electricity prices closely tracks the increasing generation of costly renewable power. Wind power comprises nearly all renewable power generation in Ohio. Since 2008, Ohio has quintupled the share of its electricity mix generated from wind power. In 2008, according to EIA, Ohio generated 0.4 percent of its electricity from wind power. As of September 2013, 2.1 percent of Ohio’s electricity was wind-generated.

Greater use of renewable power is a direct and primary cause of Ohio’s rapid increase in electricity prices. During March 2013 testimony before the Ohio Senate Public Utilities Committee, Andrew Ott, senior vice president for markets at PJM Interconnection, which coordinates electricity transmission in Ohio and 12 other states, testified the real cost of providing and delivering usable wind power to consumers is at least double or triple that of conventional power.

“Supporters of wind power and other so-called renewable power sources frequently claim renewable power mandates economically benefit consumers. However, objective data show just the opposite,” said Jay Lehr, science director for the Heartland Institute, which publishes Environment & Climate News.

James M. Taylor (jtaylor@heartland.org) is managing editor of Environment & Climate News.  

James M. Taylor

James M. Taylor is senior fellow for environment and energy policy at The Heartland Institute, and... (read full bio)