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November elections could set course for Ohio's energy future

The outcome of Ohio's governor's race will help decide the direction of renewable energy and energy efficiency requirements in one of the most fossil fuel-heavy states in the U.S. Clean energy mandates have been under attack by state lawmakers in recent years, and the new governor may well determine their fates.

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Ohio's renewable portfolio standard requires utilities to derive 12.5% of their retail electric supplies from solar, wind, biomass, geothermal and other qualifying alternative energy resources by 2027, with 0.5% carved out specifically for solar. The efficiency requirement calls for annual reductions leading to cumulative electricity savings of 22% by 2027.

Richard Cordray, a Democrat who led the federal Consumer Financial Protection Bureau during the Obama administration, is running against Ohio Attorney General Mike DeWine to replace Republican John Kasich as governor. Cordray has called for doubling Ohio's renewable energy and energy efficiency targets by 2025 and doing away with wind setback regulations, set in 2014, that are seen as slowing wind farm development in the state.

The race is considered a toss-up, according to a recent poll conducted for the University of Akron.

The stronger renewable standard would support more investments like AEP Ohio's plan to purchase 400 MW of renewable energy from two new planned solar facilities to be built in Ohio's Appalachian region in Highland County, Cordray said on his website, helping to create jobs and encourage businesses to relocate to Ohio.

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Republican gubernatorial candidate Mike DeWine.

Source: Associated Press

DeWine has not offered a specific energy plan, but his economic plan includes eliminating "burdensome regulations" to encourage job growth. As attorney general, DeWine has challenged Obama-era environmental regulations, including the Clean Power Plan.

Both candidates have voiced support for the state's oil and gas industry, earning praise from industry advocacy group Energy In Depth for their acknowledgment of the sector's value.

Ohio, which sits atop the Utica and Marcellus shales, produced 1.78 Tcf of natural gas in 2017, the fifth-highest total in the U.S., according to the U.S. Energy Information Administration.

Both DeWine and Cordray have also said they support keeping Ohio's two nuclear power plants operating. Citing poor market conditions, FirstEnergy in March said it plans to retire the 908-MW Davis-Besse and 1,268-MW Perry plants in Ohio in 2020 and 2021, respectively.

Under siege

The state Legislature has tried repeatedly to roll back the state's renewable and efficiency standards in recent years. In 2014, Kasich signed a bill freezing the standards for two years. Two years later, in December 2016, he vetoed a bill that would have weakened the standards, ending the freeze and clearing the way for them to be reinstated as of Jan. 1, 2017. In March 2017, the Republican-led General Assembly again took on the standards with House Bill 114, which sought to make the renewable energy mandate voluntary and lower the efficiency requirement to 17% electric savings by 2027 from 22%. The proposal made it out of the House before stalling in a Senate committee.

Gilbert Michaud, an assistant professor of practice at the George V. Voinovich School of Leadership and Public Affairs at Ohio University who specializes in state level renewable energy policies and utility regulation, said that a Cordray win would likely maintain the state's renewable portfolio standard, though at what level remains to be seen. "It's less clear what DeWine is going to do with regard to state energy policy, and in particular the RPS issue," Michaud said.

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Democratic gubernatorial candidate Richard Cordray.

Source: Associated Press

Ohio's two largest investor-owned utilities, American Electric Power Co. Inc. and FirstEnergy Corp., are among the top donors to DeWine's campaign, according to FollowTheMoney.org.

FirstEnergy has donated $25,208 to DeWine's campaign in 2018, while AEP has donated $7,500, records show. NiSource Inc., which is headquartered in Indiana but operates gas utilities in Ohio, has donated $23,000 to DeWine's campaign in 2018, records show.

While FirstEnergy has donated to Cordray's campaigns in past years, FollowTheMoney does not show any contributions to Cordray in 2018. Cordray has received just $1,908 from electric utilities, while DeWine has received $99,590 from the sector in 2018.

Neither AEP nor FirstEnergy have specified key energy policy issues or political races that they are tracking for the 2018 midterm elections.

"We don't have anything new or emerging on the radar with respect to the midterms," AEP Ohio spokesman Scott Blake said in an email.

Control of the Legislature at stake

J.R. Tolbert, vice president of state policy for Advanced Energy Economy, a business coalition that favors stronger measures to support low-carbon energy sources, said that while DeWine has not yet committed to maintaining Kasich's stance in support of the RPS, he and running mate Jon Husted have said they will listen to ideas about how to expand Ohio's clean-energy sector.

A study of Ohio's energy efficiency programs, meanwhile, estimated they would create or maintain 14,000 jobs, increase statewide income by more than $1.2 billion, add nearly $1.9 billion of economic value and generate nearly $3.3 billion in net sales over a 25-year forecast.

"When we talk about the clean energy economy from a jobs perspective, energy efficiency is the lion's share of those jobs," said Nick Hromalik, policy manager at the Midwest Energy Efficiency Alliance. "These standards matter from an economic perspective."

Also in play is the makeup of the next General Assembly, now under Republican control. All 99 seats in the state House of Representatives are up for election; Republicans now hold 66 of those seats. In the Senate, 17 of 33 seats are up for election. Republicans, who hold 23 Senate seats to the Democrats' nine, are defending 10 of those seats.

While Republicans led the 2017 push to slash the renewable and efficiency standards, a few Democrats supported the bill and some Republicans opposed the rollback. "Party lines are not completely solid on the matter," Michaud said.