U.S. Department of Energy - Energy Efficiency and Renewable Energy
Water Power Program
Ohio Requires 25% Renewable or Advanced Energy by 2025
May 7, 2008
Ohio Governor Ted Strickland approved a bill on May 1 that will
require the state's utilities to draw on renewable or advanced energy
for 25% of their electricity supply by 2025. Senate Bill 221 requires
renewable energy to meet at least half of that requirement, which
starts at 0.5% by the end of 2009 and gradually ratchets up to 25% by
the end of 2024. So the actual renewable energy requirement starts at
0.25% at the end of 2009 and increases to 12.5% by the end of 2024.
The bill defines renewable energy as electricity produced from solar
electric systems, wind power, geothermal energy, biomass energy, low-impact hydropower, and fuel cells, regardless of their type and the
fuel they use. A small fraction of the renewable energy must come from
solar energy, starting at 0.004% of all electricity sales by the end
of 2009 and increasing to 0.5% of electricity sales by the end of
2024. At least half of the renewable energy facilities must be located
within the state, and renewable energy credits may be used to meet the
requirement.
The bill deviates from most state renewable energy requirements by
allowing half of the 25% requirement to be met through demand-side
management, energy efficiency improvements for customers, and
efficiency improvements at existing power plants that increase the
plants' generating capacity. It also allows for power produced from
customer-located cogeneration systems, which produce both heat and
electricity, and from "clean coal" power plants, advanced nuclear
power plants, and advanced waste-to-energy plants. Utilities that fail
to meet the requirements will have to make payments to the state's
advanced energy fund, unless the utility can show that the electricity
from renewable or advanced energy sources would cost at least 3% more
than electricity from traditional energy sources. The bill also lifts
some restrictions on net metering of customer-located power generators
and lifts all restrictions on net metering of generators located at
hospitals. Net metering is a method of giving credit for power fed
into the grid by customers.
While allowing energy efficiency and demand-side management programs
to meet a portion of the advanced energy requirement, the bill also
establishes separate requirements for energy efficiency and demand-side management. Starting in 2009, utilities will have to implement
energy efficiency programs that achieve annual energy savings equal to
at least 0.3% of their electricity sales, gradually increasing to 1%
of sales for 2014-2018, then doubling to 2% of their sales for 2019-2025. By 2025, this will achieve a cumulative energy savings greater
than 22% of today's electricity sales. Utilities will also have to
implement demand reduction programs designed to achieve a 1% reduction
in peak demand in 2009 and an additional 0.75% reduction each year
through 2018. To further encourage such programs, the state's utility
commission may approve measures to decouple utility revenues from
actual electricity sales, that is, if sales go down because of energy-saving programs, the utility's profits won't suffer. Such "revenue
decoupling" measures may also be established for natural gas
utilities. Utilities must also report on their greenhouse gas
emissions and establish plans to control those emissions. See the
governor's press release and the full text of the bill.
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