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Letter to the editor: SB310 lays a framework for economic growth

AEP Energy recently installed a solar array on the roof of OSU’s RPAC. Credit: Courtesy of OSU

AEP Energy recently installed a solar array on the roof of OSU’s RPAC.
Credit: Courtesy of OSU

Letter to the editor:

I am writing in response to the letter to the editor published on Nov. 3 titled “SB310 a hit to industry” by Kylie Tien.

Senate Bill 310 was signed into law in June, and its main accomplishment was the freezing of renewable energy and energy efficiency standards for Ohio for the next two years.

Contrary to Ms. Tien’s claims, SB310 has laid a framework for growth across many sectors of Ohio’s economy and is a step in the right direction for the energy efficiency movement as a whole. Yes, that’s right, I just said that SB310, which freezes energy mandates in Ohio for two years, will be good for the green energy movement. Here’s why:

The mandates require a certain percentage of energy consumption within Ohio come from renewable sources produced within Ohio every year. The problem is that renewable sources such as wind and solar within Ohio are more expensive than those same sources in neighboring states that share Ohio’s power grid, according to the Public Utilities Commission of Ohio.  

So, by using consumption mandates to hand a portion of the energy market over to renewable energy companies within Ohio, the state government effectively granted them a huge slice of corporate welfare by allowing them to produce at higher prices. Not only is this a violation of the Constitution’s Commerce Clause, but also it harms the more efficient out-of-state producers of renewable energy who have part of the energy market closed off to them by the mandates. If these more-efficient producers are going to achieve their goal of making green energy sources widely affordable and usable, states cannot be setting up barriers that block interstate competition. By freezing the energy mandates at current levels, SB310 prevents further limitations of the type of competition that keeps renewable energy prices down.

SB310 acknowledges and elevates the importance of energy efficiency in Ohio but also acknowledges the fact that trying to achieve the goal of energy efficiency through government mandates, rather than market forces, can have devastating impacts on our local economy.

The price increases that these mandates have had since 2008 have put a heavy burden on Ohio’s economy, especially in the manufacturing sector. As a result of these costs, major Ohio manufacturers such as Timken and Alcoa supported SB310 and the costs to energy consumers since 2008 have been in the hundreds of millions of dollars.

Measurements of “job creation” due to the old mandates failure to take into account the countless jobs that the mandates have cost our state and also ignore the extremely high costs that ratepayers have incurred to subsidize renewable energy ventures within Ohio. No good method for cost-benefit analysis of these mandates is currently available because renewable energy producers were required under the old law to compare the present-day costs to a projected future value of benefits with no accountability for the accuracy of their projections. The study committee created in SB310 will establish new measurement techniques to end these deceptions. Measures of benefits “lost” due to SB310 are really just bogus estimates that mask the true economic benefits of SB310, which Ohio has already begun to see.

Tommy Zaino
Second-year in accounting and economics
zaino.3@osu.edu

One comment

  1. The freeze also allows the utilities in Ohio, like FirstEnergy to opt out of energy efficiency programs. Energy efficiency is the most viable form of energy, every dollar you put into energy efficiency you get $3 back.

    You say that mandating the state to get some of its renewable energy from the state is costly, but really the senators that past this SB 310 want to get hyrdo from Canada and count natural gas as “alternative energy”. Natural gas extraction process puts more methane into the atmosphere, which contributes to climate change.

    You can’t say let the market work and require no mandates for companies. We tried that before the Clean Air and Clean Water Act, and our rivers were on fire, and our air was thick with particulate matter.

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