ohio's renewable portfolio standards
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Todd M. Williams
Williams & Moser, L.L.C.
Attorneys at Law
Ohios Renewable Portfolio StandardsToledo City Council
February 28, 2011
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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.
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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.
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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
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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.