New Ohio bill could hamstring big wind and solar farms even more

Last year, Ohio legislators almost unanimously enacted a sweeping law meant to get energy generation online faster and meet surging electricity demand.

The law, House Bill 15, is meant to be apply evenly to all types of energy when it comes to adding new generation, according to some leading state lawmakers.

“We said we’re going to have a level playing field. Let the free market work,” Republican Sen. Brian Chavez, who chairs the Senate Energy Committee, said of HB 15 during a legislative panel at the Mid-Atlantic Conference of Regulatory Utilities Commissioners in Columbus last week.

Yet now state lawmakers are advancing a bill that would expand preferences for natural gas and nuclear generation while adding even more hurdles for solar and wind — energy sources that the state has already stymied over the last decade.

On June 10, the Republican-dominated Ohio Senate voted along straight party lines to pass Senate Bill 294, which is based on a model bill from the American Legislative Exchange Council, or ALEC, and calls for electricity generation to ​“employ affordable, reliable, and clean energy sources.” Louisiana and Utah have passed similar laws, and bills are also under consideration in Arizona, New Hampshire, New Jersey, and West Virginia, according to an April report from ALEC.

But the bill’s current definition of ​“reliable” could cause the Ohio Power Siting Board to block many utility-scale solar and wind projects, even after many groups testified against the original version, introduced in the General Assembly last October.

“We need more supply, not less,” said Democratic Sen. Kent Smith, ranking minority member of the Senate Energy Committee, who also spoke at the conference. He cited calls by both grid operator PJM Interconnection and the Ohio Chamber of Commerce for an all-of-the-above approach to adding new generation. ​“We need to be generation-agnostic. We need to let the market work.”

Chavez said the current version of SB 294 could allow solar and wind to qualify as reliable if they are combined with batteries. And developers wouldn’t need to meet the bill’s criteria for projects that are below the threshold needed for state review: under 50 megawatts for solar and under 5 MW for wind.

“If it goes to the Power Siting Board, we just said you have to have 50% reliability,” said Chavez, who has worked in and has had multiple connections to the oil and gas industry. But, he continued, ​“flat land is at a premium. … So we would say, if you’re going to put your bigger power supplies in Ohio, you shall consider if it is dispatchable more than 50% of the time.”

Still, it’s not clear how many wind or solar projects could qualify. SB 294 mandates that any ​“reliable energy source” have a ​“site-combined minimum capacity factor” of 50%. The capacity factor describes the ratio of a generator’s actual electricity output over the course of a year to the maximum that source could theoretically produce.

The average capacity factor for photovoltaic solar farms in the United States was just 24.4% last year, according to data from the U.S. Energy Information Administration. If solar projects are required to install enough battery storage to reach a 50% threshold, project costs would significantly increase.

“Capacity factors are not measures of reliability and the wrong thing to focus on,” said Andrew Linhares, Midwest director of state affairs for the Solar Energy Industries Association. ​“Ohio won’t solve its energy challenges by sidelining solar and storage, which are the fastest-growing and most affordable sources of new power on the grid.”

Further, SB 294 demands that power be readily available and dispatchable ​“at all times” of high usage and ​“in times of need.” Facilities often discharge batteries’ energy at high-usage times to take advantage of higher prices, but whether that could qualify as ​“at all times” is also unclear.

The bill’s focus on the reliability of any single resource is misguided because of how the grid functions, according to Democratic Rep. Tristan Rader, the ranking minority member of the House Energy Committee, who spoke at the conference as well. ​“That’s why we have peaker plants.”

While states issue permits for different facilities, and state policies affect what types of generation investments they attract, PJM is responsible for ensuring the reliable operation of the regional grid for Ohio and all or parts of a dozen other states and the District of Columbia.

“PJM is not favoring or disfavoring any resources class during this time when we need every megawatt of power generated to manage our supply/​demand imbalance being driven by data center growth,” said spokesperson Jeffrey Shields.

The grid operator already accounts for variability in power production and the likelihood that resources will be able to supply electricity when needed, noted Andrew Gohn, a senior strategist for the energy developer Innergex Renewables who also attended last week’s conference and heard the Ohio lawmakers’ comments. The tool for that is a metric called the effective load-carrying capacity, which is meant to capture how reliable a given resource is for purposes of PJM’s capacity market.

“Ultimately, the grid is reliable because it is a diverse mix of resources,” Gohn said. ​“It’s not reliable because of any one particular resource.”

No single facility is immune from problems. PJM tweaked its methodology for calculating effective load-carrying capacity after multiple gas plants failed during Winter Storm Elliott in December 2022. That storm’s high winds also caused water levels to fall near the Davis-Besse nuclear plant in Oak Harbor, Ohio. Numerous gas plants also failed during Winter Storm Fern this January, while wind farms performed above their expected output, according to a Grid Strategies report for the Niskanen Center, which was released in March.

Affordability remains a major issue, too. Prices reflect energy markets, the capacity market, and an ancillary services market, which helps maintain balance on the electric grid and minimize blackouts.

“If you look at the wholesale price in each of those markets, energy is actually the biggest factor in a consumer’s bill, not capacity,” Gohn said. And while there are roles in the system for different types of generation, ​“energy is provided best by cheap electrons, which is what wind and solar provide.”

Proponents of SB 294 during its Senate hearings included ALEC and the Heartland Institute, which both have multiple links to fossil fuel interests and a history of undermining climate science and lobbying against renewables. The Oil & Gas Workers Association also supported the bill.

Opponents include the Ohio Chamber of Commerce, the Ohio Conservative Energy Forum, American Clean Power, the Utility Scale Solar Energy Coalition, multiple environmental organizations, and dozens of individuals.

The bill is now in the Ohio House, where it was introduced on June 16 and is likely to be taken up when lawmakers return from their summer recess.

While the bill no longer states that its requirements apply ​“in all cases,” as in the original version, it does preserve other siting criteria under Ohio law — including a requirement that projects serve the ​“public interest, convenience, and necessity.”

Serving the public interest broadly is a good thing. However, officials at the Power Siting Board have taken a narrow view in some cases where local townships have objected to solar and wind projects, treating such opposition as ​“controlling” on the public interest question, even over environmental, economic, and other considerations. If SB 294 becomes law, there’s a risk that regulators might similarly rely on it to rule against renewable energy projects — in contrast to the state’s lax stance toward permitting fossil fuel infrastructure.

“If you create a policy, that policy drives investments,” said Ohio Consumers’ Counsel Maureen Willis. And when and if it’s passed by the General Assembly, ​“it’s out there. It is policy.”