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Kasich vetoes energy-freeze extension

By JIM PROVANCE • Dec 28, 2016 at 10:00 AM

COLUMBUS (TNS) — Gov. John Kasich issued three vetoes on Tuesday, taking strikes at legislation about renewable energy standards, sales tax exemptions for some industries and an item dealing with state agencies.

In the most sweeping action, the governor made good on his earlier threat and vetoed the legislative effort found in House Bill 554 that again would have delayed enforcement of Ohio's requirement that utilities find more of their electricity from renewable sources.

Barring a legislative override of his veto, the mandates fought by the utilities and major industrial users of electricity will resume on Jan. 1, now two years behind schedule.

By 2027, FirstEnergy, American Electric Power, and other utilities must find 12.5 percent of their power from true renewable sources such as wind, solar, and hydroelectric.

They must also work with their customers to reduce electricity usage by customers by 22.2 percent by 2027. House Bill 554, sponsored by Rep. Ron Amstutz (R., Wooster), would have reduced that to 17.2 percent.

Kasich said the legislation could impede progress made over the last six years in expanding the state's economy to create and retain jobs by offering options for green power.

“Job creators have attributed their reasons for expanding, growing, and creating jobs in Ohio to, among other things, our state's stable fiscal health, jobs-friendly tax climate and sound regulatory policies — as well as our state's wide range of energy generation options,” he said.

“Sub. HB 554 risks undermining this progress by taking away some of those energy-generation options, particularly the very options most prized by the companies poised to create many jobs in Ohio in the coming years, such as high technology firms.”

The Senate had passed the bill 18-13 and the House by 56-34, margins that would not be large enough to override Kasich's veto. The Senate would need to pick up two more votes and the House four.

“I commend Gov. Kasich for rejecting attempts by the legislature to protect dirty, outdated, and expensive energy sources, and we look to him to set a proactive clean-energy vision for our state,” said Jen Miller, director of Sierra Club Ohio.

“Before the legislature gutted our energy efficiency and renewable energy standards in 2014, those programs were providing reduced energy costs, creating energy jobs, and improving air quality,” she said.

She wasn't buying the argument of the freeze supporters that the utilities were going to move in the direction of renewable energy even if specific mandates weren't etched into law.

“Even though energy efficiency, wind, and solar are cheaper than coal and nuclear power, we know that FirstEnergy still wants to buy from its own nuclear and coal plants,” Miller said. “The mandates need to make sure that Ohio remains part of the clean energy marketplace. The entire world is doubling down on energy efficiency, wind, and solar, and Ohio has opportunity to design, develop, and manufacture those technologies.”

The veto also won praise from the League of Women Voters of Ohio.

“While states such as Michigan and Illinois go forward with renewable energy, the Ohio legislature seems determined to anchor us in the last century,” said Al Rosenfield, energy specialist with the organization.

The mandates were put in place in 2008 and each year the incremental benchmark that utilities were expected to meet climbed on the way toward 12.5 percent.

Two years ago, Kasich signed a law freezing the benchmark at the 2014 level of 2.5 percent for two years. A legislative committee that studied the issue later recommended extending that freeze indefinitely, but Kasich insisted that freeze was just temporary to give lawmakers time to adjust, but not eliminate, the mandates.

Lawmakers tried to appease Kasich by passing House Bill 554, which would have maintained the long-term goal and allow the benchmarks to resume their annual climb. But there would have been no penalties on the utilities for failing to meet those benchmarks until 2019.

“I think the energy standards bill that we passed, if you look at it, is a pretty fair bill that we were enacting upon the recommendations of the study committee,” House Speaker Cliff Rosenberger (R., Clarksville) said last week.

“We have a new federal administration coming in that could make a lot of different impacts,” he said. “We shouldn’t be stuck in a mandate.”

Sen. Bill Seitz (R. Cincinnati), who introduced companion legislation in the senate, said the governor's veto shows disrespect for the legislation study commission's recommendation to indefinitely extend the freeze on the energy policy.

While Republicans were more likely to support the bill, the issue crossed party and geographic lines. Some Republicans in northwest Ohio, where wind and solar industries have taken root, joined Democrats in opposition.

Also Tuesday, the governor slashed a proposed expansion of an existing sales tax exemption for the oil and natural gas industry inserted into Senate Bill 235.

The state has maintained that the tax exemption change could cost the state $264 million at a time it can't afford it. The oil and natural gas industry, however, has disputed this.

The governor's other action was to veto Senate Bill 329 that would have placed expiration dates on state agencies and forced them to return to lawmakers on a regular basis to justify their continued existence so lawmakers will renew them.

Staff writer Mark Reiter contributed to this report.

Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.

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