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Utility upgrades to power lines and power plants would count toward "energy efficiency" under proposed revisions in the state's energy efficiency standards, allowing utilities that reach state goals to collect more money as "shared savings."

(Plain Dealer file )

COLUMBUS, Ohio -- A showdown appears to be developing between Gov. John Kasich and GOP legislative leaders over rules requiring Ohio's power companies to sell more power generated by renewables such as wind and solar and to help customers use less electricity by converting to more efficient lighting, appliances and equipment.

The original law, which every lawmaker but one voted to approve in 2008, required that 12.5 percent of all power sold in the state come from wind and solar and other renewable technologies by 2025.

The General Assembly suspended or "froze" that mandate in 2014 after a bruising legislative battle. But the rule is scheduled to automatically come back to life Jan. 1.

Kasich has since vowed to veto any legislation that extends that freeze. During his presidential campaign, Kasich several times said he favored reasonable wind and solar development and recounted his veto threat.

Sen. William Seitz, R-Cincinnati, today released a revised version of his legislation, Senate Bill 320, which doesn't exactly extend the freeze. Instead it delays the time when utilities will have to prove they are complying.

Reaction from the governor's office was short and carefully worded but emphatic.

"The governor has been clear regarding the need to work with the General Assembly to craft a bill that supports a diverse mix of reliable, low-cost energy sources while preserving the gains we have made in the state's economy," said Emalee Kalmbach, Kasich's spokeswoman.

Samantha Williams, an attorney with the Natural Resources Defense Council and an opponent of efforts to scrap or modify the mandates, said the re-write appears "to be the same old junk": cutting down money-saving energy efficiency standards, watering down what 'counts' as renewables and efficiency, and turning the standards into toothless, unenforceable 'goals.'

"It's a grab bag of non-starters that does nothing to move Ohio forward ... and should be rejected," she said.

Trish Demeter, managing director of energy policies for the Ohio Environmental Council, called the legislation "a thinly-veiled freeze extension."

"We need strong leadership from Governor Kasich and cooler heads in the General Assembly to get serious and put Ohio's clean energy future back on track," she said.

As now revised by Seitz, S.B. 320 would not require power companies to prove they are generating or buying an increasing amount of renewable power until 2021. And companies would have until 2020 to report how they are helping customers reduce consumption through efficiency programs.

The revised bill also would allow more large customers to opt out of participating in utility-run energy efficiency programs. Participation by the state's largest industries has been optional since 2014. This latest version of the bill would also allow large commercial customers to drop out.

Environmental groups have argued since 2013 that the greatest reductions in power consumption through efficiency upgrades would come from industrial customers. The industrial counter-argument, which lawmakers agreed two years ago, was that big industrial operations look for efficiency gains on their own and don't need utility programs.

The new revisions to the bill would also reduce the role energy efficiency plays in reducing overall power consumption.

The original efficiency mandate required utilities by 2025 to have helped customers install enough energy efficient lighting, appliances and equipment to reduce power demand by 22 percent compared to demand in 2009. Seitz's bill would require a reduction in demand of 17 percent. And it gives the utilities until 2027 to achieve that goal.

The bill also tries to extend legislative authority over the state's plans to meet the U.S. Environmental Protection Agency's Clean Power Plan. It requires the Kasich administration to seek legislative approval of any compliance program before submitting it to the U.S. EPA.

The language about the Clean Power Plan may seem unnecessary, given that President-elect Donald Trump has vowed to scrap the plan, which is now under review by the U.S. DC Circuit Court and could end up before the U.S. Supreme Court. That could take time.

The Senate Energy and Natural Resources Committee began a hearing on the new bill late Tuesday.

Zachary Frymier, director Director, Energy & Environmental Policy at Ohio Chamber of Commerce, said the efficiency mandates included utility charges that cost business too much money.

"With forecasts suggesting that [the cost] could rise to $500 million per year by 2020 to fund energy efficiency programs we supported [the two-year freeze]," he said in testimony Tuesday.

Frymier added the Chamber supports the language in the bill allowing commercial customers to opt out of the mandated programs "and take control" of their own efficiency plans.

The House Public Utilities Committee, chaired by Rep. Michael Dovilla, a Berea Republican, has scheduled a hearing on a parallel bill, House Bill 554 for Wednesday.

Rep. Ron Amstutz, a Wooster Republican, was said to be re-drafting that legislation Tuesday. Amstutz could not immediately be reached for comment.