Energy Law Update: Ohio Public Utilities Commission Adopts Rules to Implement Alternative Energy Portfolio Standard - Petitions for Reconsideration Pending
On April 15, 2009, the Public Utilities Commission of Ohio ("PUCO") adopted a set of rules to implement Ohio's new alternative energy portfolio standard, which was created in May 2008 when Governor Ted Strickland signed Senate Bill 221 into law. As a result, Ohio is one of 29 states, along with the District of Columbia, that have now adopted some form of mandatory renewable portfolio standard. Another five states have voluntary renewable energy portfolio goals. Furthermore, various drafts of legislation to create a federal renewable portfolio standard are floating around Congress. It is too soon to tell whether or when such federal legislation will be enacted, or what it may require, but a topic of ongoing discussion at the federal level is the relationship between any federal standard and existing state renewable portfolio standards.
Ohio's alternative energy portfolio standard mandates that by 2025, at least 25% of all electricity sold in Ohio shall come from alternative energy resources. Of that, at least half - 12.5% - shall be generated from renewable sources such as biomass, wind, hydropower or geothermal, and a minimum of 0.5% must come directly from solar resources. Moreover, at least half of the renewable energy must be generated in-state. Third-generation nuclear power plants, fuel cells, energy efficiency programs, and clean coal technology can also be used to satisfy the 12.5% renewable energy requirement.
The law provides a gradual scale up to the 2025 goal, with initial benchmarks requiring that 0.25% of electricity sold in Ohio by the end of 2009 come from renewable energy resources and 0.004% from solar energy resources. These percentages increase in each subsequent year until the 12.5% renewable energy resource and 0.5% solar energy resource goals are attained in 2025. In addition, the program creates a renewable energy credit system, which establishes credits that can be bought, sold, and traded by utilities in order to meet their renewable energy requirements. One renewable energy credit, or REC, represents the environmental attributes associated with the generation of one megawatt hour of electricity from an eligible renewable energy facility. Electric utilities and service companies may use RECs to meet all or part of the applicable renewable energy benchmark.
In addition to the portfolio standards, the rules create new requirements for reporting greenhouse gas emissions to the international climate registry, filing an annual carbon dioxide control plan with the PUCO, long-term forecasting, and implementing energy efficiency measures.
The PUCO's action on April 15, 2009 adopting the rules is the first step to the rules becoming effective. Under Ohio law, interested parties have 30 days from the date of the rules' adoption to file an application for rehearing with the PUCO. A number of parties made such rehearing requests on or before the May 15, 2009 deadline. Consequently, the PUCO must now reconsider the rules. Upon completion of the rehearing process, the Commission will file the rules with the Joint Committee on Agency Rule Review ("JCARR") for final review and publication.
The rules will take effect on the earliest date permitted by law, which is likely to be 60 - 90 days after being sent to JCARR.
Click here to view the PUCO's rules to implement SB 221.
Click here for the PUCO docket covering the entire rulemaking, including comments and requests for rehearing filed by interested parties.
Katerina Milenkovski
Huntington Center
41 South High St., Suite 2200
Columbus, Ohio 43215
kathy.milenkovski@steptoe-johnson.com
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