The Senate Energy and Public Utilities Committee accepted amendments Tuesday to Sen. Chris Widener’s (R-Springfield) legislation on alternative energy taxation, SB232, with a favorable vote on the legislation expected at Wednesday’s hearing.
Widener said with respect to provisions in last Session’s renewable energy bill (SB221) that offers a 3 percent cap on costs for renewable energy projects, SB232 would keep the same provision regarding a cost cap on development.
With regard to accept or reject the tax exemption for local governments on renewable energy projects in their county, once a project has been certified by the Ohio Power Siting Board, county commissioners can pass a resolution to approve or reject the tax exemption as written in SB232.
The committee also accepted clarifications of what entities are subject to an excise tax, as well as sales and use tax exemptions. That amendment also added “energy conversion equipment” to the classification of tangible personal property tax. Clarification was also made as to the sales and use tax treatment of related energy conversion equipment purchases, and to specifications that operators of such facilities are subject to the commercial activity tax.
Sen. Tom Sawyer (D-Akron) said that he had discussed a few amendments with committee members and the chairman that were not accepted concerning an obligation to create reactive power across the Great Lakes transmission area. He said he hopes to present his amendments tomorrow to the committee. He said he will also have an amendment that would increase the payment to school districts for renewable energy projects.
The committee continued with several proponent witnesses, along with one person, Julia Johnson of Champaign County, opposed to the bill. Several Champaign County residents have been vocal about their opposition to wind farms in the county. Their concerns are mostly about quality of life issues of aesthetics, health and environmental concerns, as well as property value, the expense for decommissioning, and the financial burden on local government and school funding because of tax exemptions.
Kevin Schmidt, director of public policy services for the Ohio Manufacturing Association (OMA), said the OMA supports the reasonable development of alternative energy in Ohio, and specifically spoke to the positive effects of cogeneration.
“SB232 furthers this policy by making Ohio more competitive for the reasonable diversification of Ohio’s electricity generation portfolio, and the cost-caps put in place through SB221 ensure that this diversification is done so in a prudent fashion,” Schmidt said.
“With the inclusion of the cogeneration amendment, the diversification that SB232 envisions will include one of the most cost-effective technologies available today.”
Schmidt said cogeneration is recognized by manufacturers as one of the most efficient ways to generate electricity by capturing waste-heat or gas and using it to create power before it dissipates up a smokestack or is burned off. Ohio is the second largest steel producing state in the U.S. and the potential for cogeneration at just these facilities is enormous, he said.
As cited in an industry report, the potential for more than 1,000 megawatts (MW) of generation is possible. In addition, each 500MW of cogeneration represents 86 billion pounds of CO2 removed each year, helping Ohio and Ohio companies comply with environmental mandates, he said.
“Including cogeneration in SB232 as one of the qualifying technologies for the favorable tax treatment could help develop this currently untapped resource without disadvantaging cogeneration to renewable sources. Further, cogeneration has the potential to add significant amounts of energy to the grid with the capital investment risk being in private companies and not investor-owned utilities that can pass this capital cost along to tax-payers,” Schmidt concluded.
One company that has the capability to create cogeneration is ArcelorMittal, a steel producer with seven facilities in Ohio. Terry Fedor, the general manager for the company, said that it has more than 500MW of installed cogeneration capacity now, which is enough to power half a million average homes.