Though House and Senate panels moved closer May 12 to having alternative energy tax incentive bills go to their respective chambers for a vote, those backing the two bills have very different visions of what the legislation should look like.
A day after Gov. Ted Strickland called for legislators to move before summer recess legislation on, among other things, renewable energy tax treatments, committees in both chambers planned Wednesday to report the bills out of committee.
The House Ways and Means Committee, however, did not follow through with its plan to offer amendments or vote to advance the bill. Committee Chairman Tom Letson (D-Warren) said in an interview, however, the bill will likely hit the House floor in two weeks.
“There are differences in the substance as to what the bills do,” Mr. Letson said. “One of them is we really see this as an Ohio jobs bill and (there are) more jobs incentives in the House version then there are in the Senate version.”
The House measure would offer tax incentives exclusively to wind and solar energy projects. The Senate version goes beyond those two to include other forms of alternative energy, such as clean coal and cogeneration.
“The others are laudable ideas and may well be dealt with in separate bills at some future date,” Rep. Letson said. “This is really a request from and a desire to put jobs in Ohio and construction over the next two years.
“Quite frankly the inclusion of those other types of energy generation either are not possible to even get started in the time frame that the federal government and the state are looking at or they are already things that receive tax breaks, such as current base line coal production,” he said.
Ultimately the chairman thinks the House version is the more substantial of the two.
“I believe that in terms of the origin of the two bills, I believe the Senate version is a skeleton, and I believe we put flesh on the bones as how to actually work it,” Rep. Letson said.
The Senate committee did report its proposal, but didn’t draw unanimous support even from majority Republicans. The Senate Energy and Public Utilities Committee approved its heavily amended version of the legislation with dissenting votes from Sen. Karen Gilmore (R-Tiffin) and Sen. John Husted (R-Kettering).
Additionally, Sen. Steve Buehrer (R-Delta) said although he would vote for reporting the bill, he has concerns about the impact on landowners. Once people see what industrial wind farms look like, officials are going to hear more complaints because the turbines will change the landscape of communities.
Bill Hearings: Senate committee members voted to harmonize the amendments in the bill and waive a fiscal provision. Amendments approved by the Senate committee Wednesday would:
· Extend an amendment added Tuesday to allow county commissioners to not only approve a project but to specify additional requirements the project should meet, including modification of the payment in lieu of taxes amount.
· Ensure each taxing unit within a project’s affected counties would receive a copy of the application from the Department of Development.
· Clarify that projects started by Jan. 1, 2010, would be eligible for the tax treatment.
· Clarify that the director would receive a certificate of completion no later than 60 days after the effective date of the bill.
· Add cogeneration technology as an eligible form of alternative energy for the tax treatment.
· Clarify eligibility applies to those owners that contract for the sale of power with a rural or municipal power agency.
· Expand involvement of special improvement districts.
· Require the Public Utilities Commission to conduct a study of reactive power in the state.
On the last amendment, Sen. Tom Sawyer (D-Akron) said he is concerned that by adding additional generator capacity to the state’s transmission system, the state will not have sufficient reactive power, which could result in a blackout similar to the one in 2003.
“As we add additional generator capacity in the form of particularly wind capacity, I’m concerned that we don’t make sufficient provision for reactive power,” he said.
Sen. Jimmie Stewart (R-Albany) said he decided not to offer an amendment to give every consumer the ability to opt out of utility assessments. He said, however, the matter warrants further study.
Also at the Senate panel’s ninth hearing on the bill, John Warrington, of Crawford County, gave testimony against the bill because of the negative impact wind turbines have on property owners.
Companies say they cannot be profitable without further tax relief. “I say they lie,” he said.
Following him was David Applebaum, director of regulatory affairs for NextEra Energy Resources, who said the measure is a jobs bill.
Sen. Schaffer asked the witness what his company tells homeowners near where a wind turbine will be placed. Mr. Applebaum said the company provides the family with all the information they need.
When asked to clarify, Mr. Applebaum said the company works with homeowners to lease their property and, presumably, there are specific standards in place to deal with setback to ensure there is no impact on homes. Once the turbine is installed, the company will help property owners study and mitigate issues.
The House Ways and Means committee heard the same testimony from NextEra Energy Resources, but from a different witness: John DiDonato, vice president of development.
Rep. Terry Boose (R-Norwalk) asked if Ohio is ready for this construction and will the construction workers come from Ohio. The witness said he thinks Ohio is ready; the construction companies are not headquartered in Ohio, but they would likely hire Ohioans.
Mr. Boose asked from where the parts of the wind turbines would be derived. Mr. DiDonato said the parts will be assembled in the U.S. Ancillary businesses will likely set up in Ohio.
Rep. Terrence Blair (R-Washington Township) asked how many ongoing jobs will be created with each wind turbine. Mr. DiDonato said for about every 10 wind turbines there is one permanent job created. A study has shown, however, statewide 1,600 other jobs were created as the result of a wind farm.
Rep. Winburn asked how load centers impact a wind turbine farm. The witness said wind energy would never be a baseload resource. The megawatts produced by a wind turbine would displace whatever highest cost unit would otherwise be dispatched.
Also in the House Committee, members heard testimony from Hardin County Commissioner Edward Elliott, who said he supports the bill because of the positive impacts wind farms have had in his county.
Milo Schaffner, vice president of the Van Wert County Township Association, testified in opposition to the bill, saying wind energy actually costs more and pollutes more because of the backup generation that must be supplied during intermittent power.