So this is a bit delayed, but I wrote this post for Plunderbund at the end of July:
On Monday, July 7, Attorney General Mike DeWine announced that he had certified the petition language for the so-called Ohio Clean Energy Initiative. This initiative, which would be an amendment to the state Constitution – provided it gets the necessary 385,253 certified signatures – would require the state of Ohio to issue $1.3 billion in bonds per year over the course of 10 years to finance clean energy investments. This marks the fourth separate time that the group behind the idea, Yes for Ohio’s Energy Future, has attempted to put it before voters.
Now, on the surface, this proposal seems like a good idea, particularly in light of the recent Republican-led efforts to smother the growth of Ohio’s clean energy industry. Due to the combined effects of SB 310 and HB 483, which Governor Kasich signed into law in June, clean energy investors now see Ohio as something of a no go zone. Shortly after the Governor signed SB 310 into law, the American Wind Energy Association warned that 10 planned wind energy projects, which together account for more than $2.5 billion in investments, were under threat. Three of these projects already appear to be on the chopping block.
Surely, a proposal that would inject $13 billion into the state’s endangered clean energy industry is worth supporting, right?
Well, though the initiative did get a lot of coverage in Ohio’s newspapers, most of the articles were remarkably short on details. And that’s exactly the issue. Surprisingly, this proposal has managed to unite the Columbus Dispatch editorial board and Secretary of State Jon Husted with the Ohio Sierra Club, the Ohio Environmental Council, Environment Ohio, and the Union of Concerned Scientists in firm opposition. So what gives?
First, the proposal suffers from a startling lack of transparency and accountability. It calls for the creation of the Ohio Energy Initiative Commission (OEIC), a private LLC to be incorporated in Delaware, a state not exactly known for rigorous corporate oversight. This OEIC would have complete control over how the bond revenues would be allocated and spent; no one in the legislative or executive branches would be able to provide input, ostensibly to protect the process from partisanship. Strangely enough, despite the fact that this Commission would have complete control over these public dollars, the proposed amendment does not clearly indicate how or even that its members will be selected.
Given the controversy surrounding the state’s latest venture into this territory – JobsOhio – it should give Ohioans great pause to consider billions in public funding to an anonymous group of individuals who may or may not have any relevant qualifications. While the OEIC would be subject to public records laws, unlike JobsOhio, granting this much power to an unknown entity would represent a dangerous precedent for the state. Moreover, the language specifically requires the state to provide an astonishing $65 million for OEIC’s operational expenses on an annual basis. To put that into perspective, the Ohio EPA has an operating budget of $10.9 million.
Specifics on the initiative’s backers are few and far between. According to The Plain Dealer, Harvard Business Services, Inc. registered the LLC with the Delaware Division of Corporate Records. As a result, we are unable to know the names and affiliations of the individuals behind this group.
While German Trejo, a spokesman for Yes for Ohio’s Energy Future, told Bloomberg Businessweek the effort is “a truly citizen-driven idea” led by a group of concerned Ohioans, the evidence does not seem to back him up. The Dispatchdescribes its backers as “five people from central Ohio,” and neither Trejo nor any other representative has provided additional information on the group’s genesis.
Yes for Ohio’s Energy Future has even tried to gain credibility by stealing it from the Ohio Third Frontier Initiative. On its FAQ page, the group cites outcomes from Third Frontier as a way to justify its proposal. But, unlike the OEIC, Third Frontier is housed under the Ohio Department of Development and subject to public scrutiny and accountability.
Secondly, although the organizers depict themselves as clean energy advocates and liberally use pictures of wind turbines and solar panels, the actual text of the of proposal leaves the door open to financing for dirty energy projects. In section (A)(1) of the proposed Constitutional Amendment, an eligible energy infrastructure capital improvement is defined as projects that “shall include, but not be limited to, solar, wind, biomass, battery technology, and geothermal facilities…” (emphasis mine).
Perhaps the only positive thing to come out of SB 310 was that it removed the requirement in SB 221 that the state get 12.5% of its energy from “advanced energy” technologies by 2025. These projects can include controversial alternatives to traditional renewables, such as waste-to-energy plants and “clean coal” technologies (perhaps the most oxymoronic name I’ve ever run across). Given Ohio’s continued dependence on fossil fuel energy – the state got two-thirds of its electricity from coal in 2013 and roughly 10% from natural gas – the potential for such dirty energy projects to crowd out funding for clean energy is clear.
Yet, unlike wind and solar, such “advanced” energy alternatives are frequently hampered by environmental and budgetary concerns. We know that many coal-friendly politicians in the Midwest would love to see their states allocate large sums of money for carbon capture and sequestration (CCS) at coal plants. Such technologies scrub carbon dioxide from power plant emissions, capture it, and store it underground. While it’s true that we may one day need to invest in CCS in order to pull CO2 out of the atmosphere, as a hedge against catastrophic climate change, that day has not yet arrived. CCS technologies require large sums of energy, lowering the efficiency of power plants; as a result, evidence suggests that CCS can increase the cost of coal-fired power by as much as one-third.
Moreover, CCS projects have continually been beset by delays and cost overruns. The Bush administration initially cancelled the much hyped FutureGen 2.0 project in Illinois back in 2008 after the price tag ballooned to $1.65 billion, while Southern Power has once again delayed its Kemper County plant into 2015 over rising costs. Solar and wind, in contrast, enjoy steep learning curves, allowing systems to get cheaper with each subsequent installation. The price of solar panels, for instance, falls by more than 20% each time that the installed capacity doubles.
Unfortunately, it appears as though this proposal would stand a strong chance of succeeding, provided it makes the ballot. In a January poll, conducted by Public Policy Polling, 65% of respondents indicated they would likely support the measure.
Ohio’s energy future stands at a crossroads over the next two years. The state can opt to make SB 310’s two-year freeze just that, or it can abandon a path that helped create 25,000 jobs, reduced energy costs, and inject millions into the state’s economy. This proposal muddies that picture even further by making well-intentioned Ohioans think they are acting in the state’s best interest, when the result could be otherwise. I’m optimistic that the people behind this effort will fail, once again, to get their proposal on the ballot. But it is imperative that we truly understand what is in the text and write another bad idea into our Constitution.