Ohio chills industry with RPS freeze

Ohio’s Republican governor, John Kasich, has confirmed he will sign into law a bill that will freeze the state’s Renewable Portfolio Standard at its current level, marking a legislative setback that the US renewables sector desperately hopes will not become a trend.

A growing number of states, most notably wind-rich Kansas, have come close recently to walking back their Renewable Portfolio Standards. But Ohio – a key political swing state – is the first to see a bill actually make its way through the state House and Senate, and onto the desk of a renewables-wary governor.

Ohio’s House passed the bill on Wednesday, following the Senate, which had already done so.

The bill does not bin Ohio’s RPS altogether, as many Republicans would have preferred.

Rather, it will impose a two-year freeze on Ohio’s march towards a 12.5% renewables share by 2025 – meaning the state will have until 2027 to reach that threshold.

Ohio is currently required to source just 2.5% of its electricity from renewables, and that figure would have bumped up incrementally towards 12.5% in 2025, thanks to the state’s RPS, which was implemented in 2008 under a Democratic governor, and received almost unanimous support in the state's legislature.

But Republicans and some fossil-fuel-centric utilities have come round to the idea that this modest trajectory was unrealistic and a jobs-killer – claims that renewables advocates laughed off as ridiculous.

Ohio’s strong manufacturing base was split on the issue.

Ohio has the highest number of wind-related manufacturing facilities in the US, according to the American Wind Energy Association, and also hosts First Solar’s lone US module factory.

Meanwhile, some developers, such as EverPower, which recently got its 176-turbine Scioto Ridge project approved in the state, have said the law sends out a chilling message of uncertainty.

The two-year“freeze” is ostensibly being put in place so that Ohio legislators can more closely study the potential impact of the RPS on the state's economy in greater detail. This is the message adhered to by Gov. Kasich, who quashed an earlier, more extreme version that would have scrapped the RPS altogether.

But renewables advocates counter that the freeze opens the possibility that the RPS may never come back. Even if it does, there have already been some changes made by the Republican-controlled legislature, such as allowing utilities to import more of their clean electricity from outside the state.

Many in the renewables industry worry that Ohio's precedent will now offer the political cover necessary for other states to bin or water down their own RPSs. At present, the majority of US states have an RPS in place.

Ohio, the seventh most populous US state, with a population equivalent to Belgium's, is widely seen as a political bellwether, having voted for the winning presidential candidate in the last 11 elections.