Ohio Gov. Hearts Renewables, Takes A Swipe At Oil & Gas
Ohio Governor John Kasich is not exactly known as a champion of the environment, but apparently he knows a good deal when he sees one. The Republican governor made his conservative supporters hopping mad last week when he vetoed a bill that would have undercut Ohio’s goals for renewable energy. Adding insult to injury, Governor Kasich went out of his way to explain the importance of renewables to the state’s economy.
The question is, was anybody listening?
Ohio Pols Fail To Undercut Renewables
The bill vetoed by Kasich was House Bill 554. It would have set a two-year period for utilities to voluntarily comply with a renewable energy standard that had been established in 2008.
The standard would remain in place but HB 554 would have removed the penalties for noncompliance.
Here’s the revised standard, showing where the penalties were removed by strikethrough for 2017 and 2018:
(a) The compliance payment pertaining to the solar energy resource benchmarks under division (B)(2) of this section shall be an amount per megawatt hour of undercompliance or noncompliance in the period under review, as follows:
(i) Three hundred dollars for 2014, 2015, and 2016;
(ii) Two hundred fifty dollars for 2017 and 2018;
(iii) Two hundred dollars for 2019 and 2020;
(iv) (ii) One hundred fifty dollars for 2021 and 2022;
(iii) Similarly reduced every two years thereafter through 2026 by fifty dollars, to a minimum of fifty dollars.
What A Difference A Year Makes
News of the HB 554 veto was predictably met with cheers from environmental stakeholders.
That’s quite a change from the response back in 2014, when Kasich froze the 2008 renewable energy standard. It had been set to rise slowly but steadily through 2027.
In 2015, Kasich doubled down on his support for the fossil industry when he introduced a new energy plan for Ohio.
The League of Conservation Voters greeted the Kasich plan with this representative observation:
Gov. Kasich’s energy plan is a carbon doomsday machine – once it’s launched there is no stopping the damage to our climate. His moderate tone does nothing to hide that his plan is a big polluters’ wish list by eliminating the Clean Power Plan to prioritize their profits over the health of our families…
In announcing the 2015 plan, Kasich ignored top Ohio business stakeholders that had been advocating for more renewables in the state.
For example, in July 2015 the green investor group Ceres organized a letter to Kasich signed by 24 Ohio stakeholders in support of the Obama Administration’s Clean Power Plan.
The signers included several companies with annual revenues in excess of $100 million, including Clif Bar, Gap, General Mills, Nestle, Schneider Electric, Staples, and Dannon.
So, what happened to change his mind?
Well, for one thing, Kasich thought he had a good chance at winning the Republican nomination for president all the way up until last May, when he dropped out of the primary race.
It appears that freed Kasich from his obligation to appease fossil fuel interests.
Kasich explained his veto of HB 554 in a formal message to the Ohio General Assembly, in which he linked the state’s renewable energy progress to “the most improved business climate in the nation.”
He further observed:
…Ohio workers cannot afford to take a step backward from the economic gains that we have made in recent years…and arbitrarily limiting Ohio’s energy generation options amounts to self-inflicted damage to both our state’s near- and long-term economic competitiveness. Therefore, this veto is in the public interest.
Kasich touted his veto of HB 554 in a followup press release listing favorable reaction from a long list of environmental organizations, under the title “What They are Saying.”
The same release lead off with a group statement from Whirlpool, Nestle, Ameresco, Clif Bar, Gap, JLL, and the National Association of Energy Services Companies.
Right Back At You, Fossil Fuels
Kasich actually issued three vetoes last week. Aside from the renewables bill, another veto of interest involved an item in an appropriations bill, Senate Bill 235.
The bill included language that would have exempted oil and gas companies from paying sales tax on “tangible personal property they purchase that is ‘directly used in production’ of oil and gas.”
In a formal message explaining that veto, Kasich took issue with the favoritism underpinning the exemption…
…History shows that the creation of an uneven playing field often leads to other industries pursuing special tax exemptions…
…and, in a passage dripping with sarcasm he took a swing at the relatively light tax rate already enjoyed by the fossil industry:
It is unlikely that the General Assembly intended for this item to yield such a significant loss of tax revenue, with the corresponding reduction in state and local services, to provide even more favorable tax treatment of an industry that is already comparatively lightly taxed…
The exemption would have been retroactive to 2010, leading to a revenue loss estimated at $264 million.
Before closing off his explanatory note Kasich twisted the knife a little more, stating that the crippling loss of $264 million would be a high price to pay for “an industry that needs no additional tax breaks.”
He also used the opportunity to take a sly dig at the familiar “fair and balanced” slogan of Fox News, noting that “this item would create an unfair, unbalanced tax treatment between industries.”
Ouch!
Kasich Gets Religion…From Renewables
Interestingly, organized religion has emerged as one of the key stakeholder groups advocating for renewables in Ohio.
That 2015 Ceres letter, for example, included the Presbyterian Church (U.S.A.); the Region VI Coalition for Responsible Investment and Sisters of the Humility of Mary, and the Unitarian Universalist Association among the 24 signers.
It’s not likely, though, that the religious case for climate action had much to do with the Governor’s change of heart.
More likely, the growing presence of Amazon and other major tech companies in Ohio played an influential role.
Revenue from wind farms in rural counties has probably had an impact, too, by providing some much-needed relief for the state budget.
Another big factor could be the proposed Icebreaker offshore wind farm in Lake Erie. Various players in the Ohio business community are eagerly anticipating the economic sparks that could fly once the project gets farther along the pipeline.
Kasich has not had much to say publicly about the project, but last spring the Energy Department awarded its developer, LEEDCo, $40 million in funding to keep Icebreaker moving along.
As the saying goes, money talks…
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Photo: Van Wert wind farm, Ohio by Charles Carper via flickr.com, creative commons license.
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