Ohio's Renewable Portfolio Standards

8/7/2019 Ohio's Renewable Portfolio Standards

1/17

Todd M. Williams

Williams & Moser, L.L.C.

Attorneys at Law

Ohios Renewable Portfolio StandardsToledo City Council

February 28, 2011


2/17

Ohio RPS: The Basics

Governor Strickland calls for sweeping changes in regulatory

structure and for policies to encourage advanced and renewable

energy projects, in his Energy, Jobs, and Progress plan for Ohio.

The plan was introduced as Senate Bill 221. The State Senatepassed S.B. 221 (with some modifications) by a vote of 32-0 on

October 31, 2007. The House deliberated through the spring, made

significant additional revisions, and passed the bill by a vote of 93-1

on April 22, 2008. The following day, the Senate voted

unanimously to concur with the House changes. GovernorStrickland signed the bill May 1, 2008, which set its effective date

as July 30, 2008.


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Ohio RPS: The Basics

Public Utilities Commission of Ohio (PUCO) released proposed

rules on August 20, 2008. This led to a grueling 15 month rule-

making process which saw dozens of parties, comments, and four

substantive revisions to the rules by the Commission. Final

modifications were filed on October 28, 2009, and the majority ofthe Rules are now in effect.


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SB221: AEPS: 25% by 2025

Solar Carve Out:0.5% by 2025

RPS: 12.5% by2025

AEPS: 25% by2025


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Advanced Energy Portfolio Standard

Utilities must achieve 12.5%

of their power through

these sources by 2025.

The Advanced energyportion of the legislation

contains no annual

benchmarks, meaning that

utilities are not incentivized

to take action now.

ORC 4928.64(B)(1)

ORC 4928.01(A)(34)

Clean Coal

Advanced Nuclear

Energy Efficiency

Fuel Cells

Co-gen

Certain Solid Waste


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Renewable Portfolio Standard

Utilities must achieve

12.5% of their power

through these sources

by the year 2025.

There are annual

benchmarks associated

with the targets.

ORC 4928.64(B)(2).

ORC 4928.01(A)(35)

Solar Photovoltaic

Solar Thermal

Wind

Hydropower

Certain Solid Waste

Biomass

Bio-Methane Gas

Fuel Cells

Wind Turbines in Ohio waters of

Lake Erie Distributed Generation Facilities

using Renewables

Off Peak Storage Facilities using

Renewables


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RPS: Annual Benchmarks

Year Renewable Energy Resources Solar Energy Resources

2009 0.25% 0.004%

2010 0.50% 0.010%

2011 1.00% 0.030%

2012 1.50% 0.060%2013 2.00% 0.090%

2014 2.50% 0.120%

2015 3.50% 0.150%

2016 4.50% 0.180%

2017 5.50% 0.220%

2018 6.50% 0.260%2019 7.50% 0.300%

2020 8.50% 0.340%

2021 9.50% 0.380%

2022 10.50% 0.420%

2023 11.50% 0.460%

2024 12.50% 0.500%

ORC 4928.64(B)(2)


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RPS: Baseline

The baseline for a utilitys compliance requirements is the average of the total

kilowatt hours it sold in the preceding three calendar years.

PUCO may reduce a utilitys or companys baseline to adjust for new economic

growth.


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RPS: Requirements for Compliance

At least of renewable energy resources shall be

met through facilities located in Ohio.

Remainder shall be met with resources that can beshown to have been delivered into Ohio.


10/17

Investmentin Ohio

Build

Buy

RPS: Renewable Energy Credits

Utilities can meet the RPS

requirements either through

building new renewable

energy generation, or by

purchasing Renewable EnergyCredits (RECs).

1 REC = 1 Mw H of electricity

from renewable resources.

T

his allows Utilities to investin either centralized or

distributed generation.

Either way, it will equal

investment in Ohio.


11/17

RPS: The Stick

All utilities are subject for an annualreview by PUCO, and if found tohave failed to comply:

Face a $45 per Mw H shortfall ofthe RPS. (This amount will beadjusted per the CPI annually, butwill never fall below $45 level.)

Face a $450 per Mw H shortfall ofSolar benchmark. (This amountdrops to $400 in 2010, and thendrops by $50 every two years.)


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RPS: Cost Cap & Force Majeure

Utilities have two, potential, ways to avoid compliance:

1) 3% Cost Cap: Not required to comply with benchmark to the extent

compliance will result in 3(+)% increase in electricity production or

acquisition costs. ORC 4928.64(C)(3)

2) Force Majeure: PUCO may waive or modify benchmark

requirements. ORC 4928.64(C)(4)


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Key Terms

Power Purchase Agreement: Contract between an electric generator and a power

purchaser.

Renewable Energy Credit: The environmental attribute of a renewable energy

generation asset. 1 REC = 1 Mw H. A REC may be used any time in the five calendaryears following the date of their purchase or acquisition. *an SREC is a Solar REC.

Electric Distribution Utility: an electric utility that supplies at least retail electric

distribution service. ORC 4928.01(A)(6)

Electric utility: an electric light company that has a certified territory and is engaged on

a for-profit basis either in the business of supplying a noncompetitive retail electric

service in this state or in the businesses of supplying both a noncompetitive and a

competitive retail electric service in this state. Electric utility excludes a municipal

electric utility or a billing and collection agent. ORC 4928.01(A)(6)


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The major electric distribution

utilities operating in Ohio are:

Duke Energy

AEPs two subsidiaries:

Ohio Power

Columbus Southern Power

Dayton Power & Light

First Energys three subsidiaries:

Toledo Edison

Ohio Edison

Cleveland Electric IlluminatingLight Company


15/17

2009 Compliance

All of the utilities met the 2009 RPS by purchasing RECs.

All of the utilities filed for, and received Force Majeure waivers

for the 2009 Solar benchmarks. PUCO agreed to the waivers,

but have added the 2009 requirements to the 2010

requirements for each of the utilities.

See cases 10-508-EL-ACP, 09-987-EEC, 09-988-EEC 09-1922-EL-

ACP, and 09-1989-EL-ACP.


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Misc. and Interesting Sources

NRDC Interactive U.S. Map showing existing and planned renewable

projects.

http://www.nrdc.org/energy/renewables/map_ohio.asp#map

PUCO Interactive maps.http://www.puco.ohio.gov/PUCO/GIS/

PUCO Estimated Quantification of Statewide Compliance Obligations.

http://www.puco.ohio.gov/emplibrary/files/util/EnergyEnvironment/S

B221/aeps%20estimate.pdf

Ohio Department of Development Senate Bill 221 - Ohio's Commitment to

Advanced Energy

http://development.ohio.gov/Energy/Tools/AdvancedEnergyPortfolioSt

andard.htm


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Todd M. Williams

Williams & Moser, L.L.C.Two Maritime Plaza, 3rd Floor

Toledo, OH [email protected](419) 215-7699

Any Questions?

Thank you for your time.

Ohio's Renewable Portfolio Standards

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