Ohio lawmakers are considering allowing utility customers to generate electricity at a separate location, including building new generators on brownfields. This proposal is being pitched as “an economic development bill.”
Ohio Senate Bill 275 ostensibly addresses the energy demands accompanying recent “economic wins,” including the many data centers opening nationwide. It establishes standards and provisions around virtual net metering (VNM).
A fiscal analysis defines VNM as “a billing arrangement where customers who produce their electricity can receive a credit on their electric utility bills for any extra electricity produced by the customer that flows back onto the electric utility’s distribution system.”
“This legislation takes Ohio’s current law regarding net metering and expands it to allow utility customers to generate electricity at a location that is separate from their property,” state Sen. Matt Dolan, R-Chagrin Falls, said in previous sponsor testimony to the Ohio Senate Energy and Public Utilities Committee.
“[C]urrent law regarding net metering allows a person or business to set up solar, wind or other types of energy generation on their own property and receive a credit against their energy bill,” Dolan added. “The generation must also be located on the same property as the customer. This requirement can limit how much energy a customer can produce, especially for businesses that have significant energy needs but limited space to build these generation facilities on their property.”
A Columbus, Ohio-based think tank said the measure, which has drawn opposition from American Electric Power, AES Ohio, and Duke Energy, will help the state meet its burgeoning energy demands.
In prepared testimony, Greg R. Lawson, a research fellow at The Buckeye Institute, said that the bill “does not address every energy issue the state faces.” However, it does “take several strides in the right direction,” and he asked lawmakers to adopt “smart energy policies like those in Senate Bill 275” to “make it easier for power suppliers to build, network, and transmit energy” to Ohio consumers.
“This committee knows that Ohio’s energy demands are growing. As the state’s economy continues to evolve, its manufacturing and technology sectors require and consume more and more energy,” Lawson said. “Cloud computing, semiconductor plants, and digital data storage centers, in particular, are dramatically changing Ohio’s economic and energy landscapes. Fundamental economic principles require supply to find ways to keep pace with demand," he added.
“As Ohio sheds its Rust Belt past and grows into its 21st century future, its households, businesses, and new technology centers require adequate, affordable energy,” Lawson continued. “Their growth and prosperity depend on it. Ohio enjoys bountiful natural resources and an innovative, hard-working labor force that can meet the state’s needs. And smart energy policies like those in Senate Bill 275 that make it easier for power suppliers to build, network, and transmit energy will help.”
John Seryak, the founder of energy consultancy Runnerstone and the energy engineer for the Ohio Manufacturers’ Association, said the legislation “creates a virtual net-metering mechanism for local generation sited at brownfields and other similarly affected properties.”
“First, the bill allows many types of eligible electric generation technologies for virtual net-metering,” Seryak said in prepared testimony to the committee. “It’s important to create this fair playing field. There are more electric generation and storage technologies available today than ever, and even more being invested in to come to market. However, the bill could be improved with a catch-all definition so that any electric generating technology can be eligible."
Seryak continued: “Second, the bill highlights land and facility types that can readily host electric generation technologies,” Seryak added. “Some of these host properties may also have existing electrical infrastructure, a coveted resource today. While any type of land and facility should be eligible for local generation, this is a good starting point.”
