Kasich breaks with GOP, keeps renewable energy standards

In a victory for clean energy advocates, Gov. John Kasich Tuesday again broke with fellow Ohio Republicans, vetoing their attempt to put a halt to the state's requirements that utility companies get more and more energy from renewable sources.

Kasich had already vetoed Republican lawmakers' attempt to limit abortions in Ohio to the first six weeks of gestation, a measure he said would be struck down by federal courts.

The veto set off a barrage of press releases. Environmental groups cheered the news. But others - including statehouse Republicans who had passed the bill - weren't so happy.

State Sen. Bill Seitz, a Green Township Republican, said the veto "disrespects" the legislative process, adding: "It is apparent that Governor Kasich cares more about appeasing his coastal elite friends in the renewable energy business than he does about the millions of Ohioans who decisively rejected this ideology when they voted for President-elect (Donald) Trump.  We can only hope that President Trump and his amazing cabinet of free market capitalists will save us from the regulatory overreach of Al Gore-style policies that take unnecessary money out of ratepayers’ pockets."

But the Environmental Defense Fund said the veto will allow Ohio to become a leader in the clean energy economy, "clearing the way for well-paying jobs, millions in investment, and healthier air for all."

Supporters of the mandates say they're necessary to decrease air pollution and reduce the state's reliance on coal and natural gas. Proponents also argue Ohio is far behind other states in attracting companies in the clean energy sector.

"Businesses need certainty to invest," said Andy Holzhauser, founder and former CEO of the Greater Cincinnati Energy Alliance.

The freeze and the back and forth about whether to lift it "create uncertainty, and thus you stunt private sector investment," Holzhauser said. "The vast majority of Ohioans support clean energy and want more of it."

With this veto, a freeze on the standards lifts after Dec. 31, and Ohio's clean energy mandates will be in motion once again.

Kasich himself said in a statement that keeping the standards will help Ohio's economy. "Arbitrarily limiting Ohio's energy generation options amount to self-inflicted damage to both our state's near- and long-term economic competitiveness," he said.

Lawmakers could take up the issue again next year, or they could reconvene later this week to vote to override Kasich's veto. House Speaker Cliff Rosenberger, R-Clarksville, issued a statement late Tuesday indicating that was unlikely. Saying he was "disappointed" in the vetoes, he said the energy bill (and others vetoed by Kasich Tuesday) would continue to be House GOP priorities - but in the next session of the General Assembly, starting in January.

For now, all electric utility companies will be required to meet the 2017 benchmarks, including getting at least 3.5 percent of the electricity they sell from renewable energy sources, such as wind, solar, water or geothermal.

Under the law, utilities can build their own renewable sources or buy renewable energy credits.

The percentage of renewable electricity would increase to 12.5 percent by 2027. The failure to meet that standard would result in fines.

Officials at Duke Energy, Southwest Ohio's distributor of electricity, reported buying 2.4 percent of its electricity with renewable energy credits in 2015. The company would have preferred an incentives program over mandates but "will comply with it as cost-effectively as possible," said company spokesperson Sally Thelen.

How did we get here?

Ohio's clean energy standards have changed dramatically since a Republican-led House and Senate first passed them in 2008.

The first iteration set a goal for electric companies to achieve "25 by 25," meaning that 25 percent of the electricity sold to Ohio customers was to be created by alternative energies by 2025.

Essentially, that meant more electricity produced by wind, solar, water and geothermal sources and less from fossil fuels, such as coal and natural gas.

The mandate started off at 0.25 percent in 2009, and was set to gradually rise, year over year.

The law had other requirements, including increases in energy efficiency over time to cut back on the power Ohioans use and a mandate to give customers a choice in their electric supplier.

The mandates were in effect for about five years, putting Ohio's renewable energy use at about 2 percent, according to the U.S. Energy Information Administration.

That's when Republicans voted to lower the final standard to 12.5 percent and extend the deadline to 2027, before voting in 2014 to freeze the standards altogether for two years, in order to study what the state should do.

"The assumptions at the time seemed valid, but, in hindsight, proves only how bad the government is at trying to central-plan large portions of the economy," said Sen. Bill Seitz, R-Green Township, in an October interview with the Enquirer.

Reaction to Gov. Kasich's veto of House Bill 554

Union of Concerned Scientists: “Governor Kasich showed real leadership today. By vetoing House Bill 554, he has sent a strong message to the clean energy market that Ohio is serious about creating jobs and spurring investment in that industry."

Christian Coalition of Ohio: "We are grateful for Governor Kasich's leadership on the issue of energy reform...We want Ohio to lead the nation in energy production to provide jobs for our families, savings for our churches, and safety for our children through American energy independence.”

The Buckeye Institute: "It is unfortunate that politics got in the way of the right policy for Ohio... While we at Buckeye ultimately want an outright elimination of these burdensome energy mandates that are of dubious environmental value at best, the legislature's modest reform is better than nothing. Perhaps the best Christmas gift of all would be to trade in the lump of coal Kasich's veto of this legislation offered Ohioans and instead have jobs for coal miners as well as cheaper (and locally-produced) energy for Ohio families and businesses."

Audubon Society: “Conservative politics and profitable clean energy go hand-in-hand. Governor Kasich gets it and Ohioans owe him a big thanks,” 

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Correction: An earlier version of this story incorrectly stated Andy Holzhauser's position with the Greater Cincinnati Energy Alliance.