Williams & Moser, L.L.C.

Attorneys at Law

Ohio·s Renewable Portfolio Standards
Toledo City Council
February 28, 2011

Todd M. Williams

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 ³Energy, Jobs, and Progress´ plan for Ohio. The plan was introduced as Senate Bill 221. The State Senate passed 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. Governor Strickland signed the bill May 1, 2008, which set its effective date as July 30, 2008. 

Ohio RPS: The Basics 

Public Utilities Commission of Ohio (PUCO) released proposed rules on August 20, 2008. This led to a grueling 15 month rulemaking 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 of the Rules are now in effect.

SB221: AEPS: 25% by 2025

AEPS: 25% by 2025 RPS: 12.5% by 2025

Solar Carve Out: 0.5% by 2025

Advanced Energy Portfolio Standard
Utilities must achieve 12.5% of their power through these sources by 2025. The Advanced energy portion 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

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

RPS: Annual Benchmarks
ORC 4928.64(B)(2) Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Renewable Energy Resources 0.25% 0.50% 1.00% 1.50% 2.00% 2.50% 3.50% 4.50% 5.50% 6.50% 7.50% 8.50% 9.50% 10.50% 11.50% 12.50% Solar Energy Resources 0.004% 0.010% 0.030% 0.060% 0.090% 0.120% 0.150% 0.180% 0.220% 0.260% 0.300% 0.340% 0.380% 0.420% 0.460% 0.500%

RPS: Baseline 

The baseline for a utility s compliance requirements is the average of the total kilowatt hours it sold in the preceding three calendar years. 

PUCO may reduce a utility s or company s baseline to adjust for new economic growth.

RPS: Requirements for Compliance 

At least ½ of renewable energy resources shall be met through facilities located in Ohio.  Remainder shall be met with resources that can be shown to have been delivered into Ohio.

RPS: Renewable Energy Credits
Utilities can meet the RPS requirements either through building new renewable energy generation, or by purchasing Renewable Energy Credits (RECs). 1 REC = 1 Mw H of electricity from renewable resources. This allows Utilities to invest in either centralized or distributed generation. Either way, it will equal investment in Ohio.

Buy

Build Investment in Ohio

RPS: The Stick
All utilities are subject for an annual review by PUCO, and if found to have failed to comply: Face a $45 per Mw H shortfall of the RPS. (This amount will be adjusted per the CPI annually, but will never fall below $45 level.) Face a $450 per Mw H shortfall of Solar benchmark. (This amount drops to $400 in 2010, and then drops by $50 every two years.)

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)

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 calendar years 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)

The major electric distribution utilities operating in Ohio are: Duke Energy AEP s two subsidiaries: Ohio Power Columbus Southern Power Dayton Power & Light First Energy s three subsidiaries: Toledo Edison Ohio Edison Cleveland Electric Illuminating Light Company

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-ELACP, and 09-1989-EL-ACP.

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

Any Questions? Thank you for your time.

Todd M. Williams Williams & Moser, L.L.C.
Two Maritime Plaza, 3rd Floor Toledo, OH 43604 toddm@williamsandmoser.com www.williamsandmoser.com (419) 215-7699

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