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1. Cincinnati legislator reveals proposed changes to energy law

The Senate Public Utilities committee got its first look this week at Substitute Senate Bill 58, which includes proposed changes to Ohio’s five-year-old energy efficiency and renewable portfolio standards. The requirements were included in Senate Bill 221 of the 127th General Assembly, and mandate that by 2025 electric distribution utilities (EDU) implement energy efficiency programs resulting in a 22 percent usage reduction. Additionally, 25 percent of the electricity sold by each EDU must be generated from alternative energy sources—of that at least 12.5 percent must be generated from renewable energy resources and at least one half of the renewable energy used must be generated at facilities located in Ohio.

Senator Bill Seitz (R-Cincinnati) said the original legislation was based on projections that there would be a steady increase in electric demand that would necessitate the need for additional generation capacity within the state. Because there is no need for additional generation capacity, he said the underlying assumption of the 2008 legislation was false.

While admitting his preference would be to abolish both requirements altogether, Seitz conceded doing so would destroy the renewable industries in the state. Although his bill retains the current benchmarks, he will not hear applause from the wind and solar industries, which claim there are a number of items that would effectively gut the requirements.

Among the provisions included, the bill would do the following:

Energy efficiency:

  • Allow an EDU’s energy efficiency enhancements to its own transmission and distribution network to count toward meeting the energy efficiency benchmarks. Additionally, the bill permits excess compliance to be banked forward for subsequent years.
  • Alter the annual energy efficiency benchmarks to correct for the 100 percent jump in the benchmark that was to occur a few years from now. This requires slightly less compliance in the near-term in trade for slightly more compliance in the years just before 2025.
  • Add a new opt out process for the largest and most energy-sensitive utility customers— estimated to include 110 energy users.
  • Establish cost cap mechanisms for utility compliance of energy efficiency benchmarks. One mechanism caps the annual spend in future years at 2013 PUCO-approved spending levels and the other expresses the energy efficiency savings achieved by the 2013 spend on a cost per kWh basis and sets that cost per kWh as the spending level going forward. Utilities must choose a one time irrevocable option.

Alternative energy:

  • Remove the requirement that half of the renewables come from in-state sources—instead the bill would require that they come from sources deliverable to Ohio.
  • Broaden the definition of renewables to capture hydropower from provinces contiguous to Ohio.
  • Allow forms of advanced energy that produce energy efficiency to count toward both requirements.

Seitz told the committee he expects lively debate on the proposal and expressed a desire to see the legislation pass by year-end. Representatives from the Ohio Energy Group and the Industrial Energy Users of Ohio testified in support of the legislation.

The bill is scheduled for opponent testimony on October 2, 2013.

2. Legislative activity this week

Traffic cameras: Sponsored by Senator Tom Patton (R-Strongsville), Senate Bill 196 would prohibit the use of traffic law photo-monitoring devices by municipal corporations to detect signal light violations unless the municipal corporation is authorized to establish a mayor’s court. The bill was introduced on September 26, 2013.

Electronic cigarettes: Sponsored by Representative Stephanie Kunze (R-Hilliard), House Bill 144 defines electronic cigarettes as devices that produce a vapor that delivers nicotine. The bill includes the devices in the definition of alternative nicotine products within the restrictions that currently apply to the sale or distribution to, and possession or use by, minors of cigarettes and other tobacco products. The legislation was referred out of the House Health Committee on September 25, 2013.

Political parties: Sponsored by Senator Bill Seitz (R-Cincinnati) Senate Bill 193 would eliminate intermediate political parties and revise the processes for determining political party status and for establishing new political parties. The bill received sponsor testimony in the Senate State Government Oversight and Reform Committee on September 25, 2013. It is scheduled for an additional hearing on October 1, 2013.

Graduate tax incentives: Sponsored by Representatives John Rogers (D-Mentor on the Lake) and Terry Blair (R-Washington Township), House Bill 246 would allow recent college graduates to claim an income tax deduction for qualified higher education expenses. Additionally, the bill would allow employers of recent college graduates to deduct the employer's costs of employing the graduate from the employer's gross receipts subject to the commercial activities tax. HB 246 was introduced on September 19, 2013.

For more information, please contact:

Michael Caputo
(non-attorney professional)
216.348.5770
mcaputo@mcdonaldhopkins.com

Rebecca M. Kuhns
(non-attorney professional)
614.458.0043
rkuhns@mcdonaldhopkins.com

Government affairs work is so much more than networking with government officials. It requires a strategic plan drafted by specialists who understand economic development and legislative issues. We help identify ways the government can contribute a solution to a business challenge, such as complying with regulatory and legislative mandates, securing funding for an important project, or obtaining government contracts. Our Government Affairs team has an impressive background. They work together to listen to clients, assess opportunities and recommend how government might contribute to achieving the goal.

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