Ohio Adopts Alternative Energy Portfolio Standard

On May 1, 2008, Governor Ted Strickland signed substitute Senate Bill 221 into law, establishing an alternative energy portfolio standard (AEPS) for the state of Ohio.  The law mandates that by 2025, at least 25 percent of all electricity sold in the state come from alternative energy resources.  At least half of the standard, or 12.5 percent of electricity sold, must be generated by renewable sources such as wind, solar (which must account for at least 0.5 percent of electricity use by 2025), hydropower, geothermal, or biomass.  At least half of this renewable energy must be generated in-state.  In addition to renewables, the additional 12.5 percent of the overall 25 percent standard can also be met through alternative energy resources like third-generation nuclear power plants, fuel cells, energy-efficiency programs, and clean coal technology that can control or prevent carbon dioxide emissions.  The bill also creates a renewable energy credit (REC) tracking system, which allows utilities to buy, sell, and trade credits to comply with the renewable energy and solar energy requirements.  Additionally, electric utilities will be required to achieve energy savings of 22.5 percent by the end of 2025 through energy efficiency programs. Utilities must also implement programs to reduce peak energy demand one percent beginning in 2009, and an additional .75 percent per year through 2018.  With the enactment of this new legislation, Ohio becomes the 27th state to establish a renewable electricity standard.

SB 221 authorizes the Public Utilities Commission of Ohio (PUCO) to develop rules for decoupling, a mechanism that separates utility profits from the volume of electricity sales.  The bill also requires PUCO to adopt rules establishing greenhouse-gas reporting requirements, including participation in the Climate Registry, which aims to develop a common system for tracking GHG emissions between jurisdictions.

SB 221
States with Renewable Portfolio Standards