In the wee hours of the morning on May 8th, the Ohio Senate debated and passed SB 310, 21-11, which would freeze Ohio’s renewable energy and energy efficiency standards for 2015 and 2016 at their 2014 benchmarks.

Blue Creek Wind Farm, Van Wert County

Blue Creek Wind Farm, Van Wert County

SB 310 would also repeal a rule that requires half of a utility’s renewable energy to come from in-state sources and it allows lower cost hydro-electric power to count towards the renewable standards.

Current law requires public utilities to supply 25% of their power from alternative energy sources by 2025.  12.5% of that requirement must come from renewables such as wind, and solar, excluding nuclear.  Utilities must also reduce their energy consumption by 22% over the same period.

SB 310 now sits in the House Public Utilities Committee which already cancelled a vote on the bill and rescheduled it for Tuesday of next week.  House members are under strong pressure from both sides of the issue and the rhetoric is ramping up on the airwaves.

Proponents and opponents both claim electricity rates will rise and jobs will be lost if their side should lose.

Two such opponents, Ohio Advanced Energy Economy and Ohio Partners for Affordable Energy, have released an analysis claiming residential electric customers would pay on average $108 more over two years should SB 310 pass and commercial customers will pay $23,000 more on average.

Cleveland.com indicates these figures are based on assumptions and “data in reports that the state’s utilities file every three years with the Public Utilities Commission of Ohio (PUCO).”

Greg Lawson of the Buckeye Institute sheds further light on the opposition’s figures,

“The projected savings being touted by proponents of the mandate status quo are speculative and the result of a specific testing model that utilities are compelled to use when reporting to the PUCO.  Effectively, the model assumes that a consumer will eventually benefit in the future if enough subsidies are paid today.  Whether these purported ‘savings’ ever really materialize is an open question and even if they do, the question remains: why do we need the government to issue a mandate when the market will eventually prod people in that direction?”

While the opposition’s rate assertions are based on assumptions, proponents of SB 310 can rely on hard facts to show that Ohio’s reliance on renewable energy standards causes electric rates to increase.  The Heartland Institute points to a January 2014 article by James Taylor, “Ohio Renewable Mandates Driving up Electricity Prices,” which states that Ohio’s energy prices have risen more than twice the national average (3.2% nationally vs. 8.7% in Ohio) since renewable energy standards were mandated in 2008 based on data from the U.S. Energy Information Administration.

Why the increase?  Taylor references expert testimony before the Ohio Senate Public Utilities Commission which stated wind power is two to three times more costly to generate and deliver to Ohioans than conventional power.

The rise in Ohio’s energy prices since 2008 comes with a big price tag.  Taylor states,

“Had Ohio’s electricity price increases been limited to the national average since 2008, the state’s electricity consumers would have paid $4.3 billion less for their electricity.”

Energy prices are not the only point of debate.  Ohioans are also hearing a lot about jobs.  Opponents of SB 310 claim the renewable energy standards are a job creator, especially for the ever prized and glorified “green” jobs.

Sure, putting in place a government mandate to purchase a product via the renewable energy standards will naturally create jobs as will the federal subsidies that wind power companies enjoyed up through the end of 2013.  In fact, the Blue Creek Wind Farm in Van Wert county received $172 million in federal stimulus funds.  One has to wonder if the farm would have been built minus the Ohio energy mandates and the federal subsidies.

With every economic decision, there are opportunity costs.  So what are the opportunity costs of expensive mandates and hundreds of millions of dollars in federal subsidies?

In his testimony to the House Public Utilities Commission on SB 310, Greg Lawson referenced a study by the American Traditions Institute.  The study found that Ohio’s renewable energy standards will impose a cost of $8.629 billion on Ohioans over the period 2016-2025, and will lead to higher electricity prices, lower economic output, and 9,753 fewer jobs by 2025.

With wind power comprising nearly all renewable power in Ohio, the 9,753 fewer jobs is a big price to pay for the 2,001 – 3,000 “direct and indirect” jobs supported by wind energy in 2013 as reported by the American Wind Energy Association.

If SB 310 should pass the House and be signed into law, Ohio would be the first state to freeze its renewable energy mandates.  28 other states have similar mandates and there has to be growing concern among green energy activists and manufacturers who have skin in the game that other states will follow suit.

As such, the Ohio House will continue to receive tremendous pressure to take the teeth out of SB 310 or let it fail altogether.

Ohioans that care about their pocketbooks and the individual freedom that your personal resources afford need to call their State Reps and let them know that Ohio’s Alternative Energy Portfolio Standards place a tremendous economic burden on all Ohioans.

It’s time wind and solar stood on their own two feet and let the free market decide how best to utilize Ohio’s scarce financial resources when it comes to energy production.