Recently Passed Ohio Budget Bill Impacts State's Wind Industry

House Bill 59 represents legislation for Ohio’s state budget for the 2014 and 2015

Ohio Statehouse

HB 59, the biennial budget bill passed by both the Ohio House and Senate on June 27th and signed by Governor Kasich on June 30th contained several provisions impacting renewable and advanced energy projects throughout the state. Here's a rundown of the portions of the bill dealing with the wind energy sector.

Changes to "Payment In Lieu of Taxes" Qualifications

The passage of SB 232 in the 128th General Assembly provided a temporary "payment in lieu of taxes" (PILOT) for renewable and advanced energy projects. The PILOT effectively equals $9,000 per megawatt of nameplate capacity and project developers must meet a myriad of requirements to qualify for it. Language in HB 59 extends the sunset for the PILOT by two years, such that renewable energy projects must be "under construction" by the end of 2015 and placed in service by the end of 2016. Advanced energy projects have an additional three years on both deadlines.

This, in effect, extends by five years the deadlines by which the owner or lessee of a qualified energy project must submit a property tax exemption application, submit a construction commencement application, begin construction, and place into service an energy facility using renewable energy resources (wind, solar, biomass, etc.) to qualify for an ongoing real and tangible personal property tax.

Wind Turbine Setback Provision Changes

HB 59 also made changes to the wind turbine setback provisions in the Ohio Revised Code. The new language does the following:

  • Changes from 750 to 1,250 feet the minimum setback requirement (the horizontal distance measurement from the tip of the turbine's nearest blade at 90 degrees to the exterior of the nearest, habitable, residential structure, if any, located on adjacent property) for the blades of a wind turbine at an economically significant wind farm.
  • Clarifies that the minimum setback applies to projects over 5 megawatts.
  • Maintains the existing setback distance requirement of 750 feet for Power Siting Board certification applications made prior to the effective date of this section of the bill, even if an amendment to the application is filed on or after that effective date.

SB 58 – Revisiting Ohio's Alternative Energy Portfolio Standard (AEPS)

Senator Bill Seitz, Chairman of the Senate Public Utilities Committee, introduced Senate Bill 58 early this year. The bill consisted of issues and questions intended to provide the framework for the committee to re-examine Ohio's AEPS five years after its passage since, as Senator Seitz explains, "the energy world has changed dramatically."

The Committee has held a series of panels focused on various topics, such as renewable energy and energy efficiency, as well as open, general testimony. Hearings were put on hold while the Senate considered the budget bill.

Senator Seitz has indicated he will be drafting a substitute bill over the Summer and will resume hearings on the bill this Fall. He has publicly indicated that changes will be made to the energy efficiency requirements and the three percent cost cap that is applicable to renewable energy.

GLWN Responds to Senator Seitz's Actions

In response to the amendments initiated by Senator Seitz, GLWN appealed to the Ohio legislature via an open letter signed by a number of Ohio businesses within the GLWN supply chain network. Here is the context of that letter:

April 8, 2013

The Honorable Bill Seitz
Chair, Senate Public Utilities Committee
Columbus, OH 43215

Dear Senator Seitz:

We are Ohio manufacturers that are committed to growing our businesses and strengthening the communities in which we operate.

Sound energy policy is very important to our companies and to all manufacturers in Ohio. It needs to provide long-term assurance of the lowest cost of energy. Support for energy efficiency plays a key role in energy policy because these projects lower our costs of production and insulate us from changes in rates. Along with renewables, efficiency should remain a part of Ohio's energy portfolio.

We are aware of your initiative to revisit Ohio's energy policy. We advise caution in making changes that could create more uncertainty in energy markets and undermine investment and competitiveness in Ohio's manufacturing sector.

(Signed by 16 Ohio businesses.)

AWEA Ohio Wind Energy Summit Aims at Shaping Policy

Conference slated for September 24, 2013 in Columbus, Ohio

Ohio was one of the top five fastest growing states for wind capacity additions in 2012, with 313 MW added in 2012 and over 54,000 MW in wind resource potential. In addition, the Buckeye State has the most wind-related manufacturing facilities in the country – with more than 60 (or more than 1 in every 10 in the US) producing components for the wind industry. Still, challenges remain, including maintaining the RPS, developing proper siting regulations and educating the public on the consumer benefits of wind energy.

The Ohio Wind Energy Summit, conducted by the American Wind Energy Association (AWEA) and chaired by Eric Thumma of Iberdrola Renewables, Inc., will attempt to adopt a strategy to overcome these challenges by:

  • analyzing the demand for wind energy in Ohio
  • evaluating the position of the state RPS
  • reviewing successful siting projects that foster community acceptance
  • studying distributed and community wind projects and their role in the local market
  • hearing how federal and state policy are working together to encourage local wind energy
  • determining new methods to propel future growth
  • mapping an evolving state regulatory framework

As AWEA’s first state-focused seminar, this event is a unique opportunity to gather the practical resources and contacts necessary to take advantage of a thriving Ohio market.

[Editor's Note]: Thank you to Dayna Baird of AWEA for contributing to this article.

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