Ohio Energy Mandates Study Committee Relies on Fossil Fuel Interests to Attack Alternative Energy Portfolio Standard (AEPS)

To: Interested Reporters

Fr: Gabe Elsner and Matt Kasper, Energy & Policy Institute

Re: Ohio Energy Mandates Study Committee relies on fossil fuel interests to attack Alternative Energy Portfolio Standard (AEPS)

The Ohio Energy Mandates Study Committee will release its final report on September 30 with recommendations on legislative action. It is very likely that the Study Committee will recommend indefinitely freezing the Alternative Energy Portfolio Standard (AEPS). Ohio legislators should be cautious of any action to freeze, eliminate, make voluntary or weaken the standard because the study committee will be forced to rely on special interest groups to come to their conclusion.

Any effort to weaken or eliminate the AEPS should rely on credible, third-party sources, not special interests and front groups.

Of the 17 pieces of testimony before the committee, only 5 were directly critical of the AEPS. The other 12 pieces of testimony either explained the significant benefits of the AEPS for Ohio ratepayers, were neutral on the AEPS, or instead focused on the EPA’s Clean Power Plan.

Each of the 5 pieces of testimony that advocated against the state’s renewable energy and energy efficiency standards in the AEPS came from special interests tied to the fossil fuel or utility industry. Front groups, like Strata Policy and the Buckeye Institute, and utility interests that have a direct financial stake in ending the renewable energy and energy efficiency standards should not be considered unbiased sources to justify eliminating, freezing, or reducing Ohio’s AEPS.

Below we breakdown the anti-AEPS testimony and the connections to special interests.

Dr. Ryan Yonk – Utah State University/Strata Policy

Dr. Yonk is an Assistant Research Professor at Utah State University and Executive Director of Strata Policy. Utah State University houses the Institute of Political Economy, which has received over $170,000 from foundations connected to the Koch brothers, who own a conglomerate with financial interests in coal and natural gas. Yonk’s colleague, Dr. Randy Simmons was previously the “Charles G. Koch Professor of Political Economy” and runs the “Koch Scholars” Program, which receives an annual grant from the Charles Koch Foundation.

In addition to being connected to the Koch brothers, Utah State and Strata failed to provide accurate economy analysis with regards to Ohio’s AEPS. The American Wind Energy Association’s Michael Goggin at the American Wind Energy Association noted serious flaws, saying, “When major errors in the study’s methods are corrected, the study’s results actually confirm that state Renewable Energy Portfolio Standards (REPS) like those in Kansas create hundreds of jobs and save consumers tens of millions of dollars.”

Strata and Simmons’ study uses a “statistical trick to blame the Great Recession on renewable energy” and misses the most basic statistical principle: Correlation is not causation. Strata and USU would have simply needed to look at one state that did not have a renewable energy standard to see that the economic downturn was not a result of the state’s enacting a renewable energy standard but the result of the Great Recession.

According to testimony from the Ohio Consumers’ Counsel, Ohio’s energy efficiency mandate saved ratepayers money at a benefit between 1.6 times to 3 times the cost of the program.

Greg Lawson – Buckeye Institute

Mr. Lawson is the Statehouse Liaison and Policy Analyst with the Buckeye Institute, a think tank that is part of the State Policy Network – a coordinated network that drives American Legislative Exchange Council model bills in state capitals. Buckeye Institute has received significant funding from the Koch-fueled Donors Capital Fund, which obscures the true sources of its grants according to the Center for Media & Democracy. In addition, the Koch Brothers directly funded Buckeye Institute through the Charles G. Koch Charitable Foundation and Claude R. Lambe Charitable Foundation.

Lawson’s testimony claims the AEPS has raised electricity prices. A recent study by venture capital firm DBL Investors reaffirmed that renewable energy standards do not negatively affect the economy. DBL found that “states relying more on renewable generation have experienced retail electricity prices comparable to, or cheaper than, states relying less on renewable generation.” The 10 states with the greatest share of generation from renewables averaged a retail electricity price of 9.79 cents per kWh in 2013 versus an average of 10.28 cents per kWh for the 10 states with the least share of renewable electricity generation.

Dean Ellis – Dynegy 

Mr. Ellis is the Vice President, Regulatory Affairs for Dynegy, a major electricity producer based in Texas that owns natural gas and coal power plants in Ohio. In fact, Dynegy closed on a deal with Duke Energy that transferred the ownership interest of several natural gas and coal power plants in Ohio from Duke Energy to Dynegy.

Ellis declared that state mandates should “be narrowly drawn to limit the impact on other forms of generation…” and “designed with an eye towards keeping electricity affordable…”

Ellis advocated for “Ohio to continue down the path it has begun…” with regards to freezing the AEPS.

Glen Thomas – PJM Power Providers Group

Mr. Thomas is the President of the PJM Power Providers Group or “P3”. According to his testimony, P3 members own more than 87,000 megawatts of generation assets in the PJM market. P3 members include Constellation Energy, DPL, Exelon, FPL Energy, NRG Energy, and PSEG.

According to Midwest Energy News, “Glen Thomas of the PJM Power Providers Group particularly criticized “out-of-market subsidies,” including energy riders, as having the potential to cause “a clear, distorting effect on competitive markets.””

Joe Kerecman – Calpine Corporation

Mr. Kerecman is the Director of Government and Regulatory Affairs for the Calpine Corporation, which owns 87 power plants representing nearly 27,000 megawatts of power generation. 95% of the company’s fleet is natural gas-fired power plants according to Kerecman’s testimony.

Kerecman advocated the “absence of subsidies and letting each electric power producer compete on a level playing field will produce the greatest efficiencies, competitive outcomes, and accordingly the lowest prices for ratepayers.”

Energy Mandates Study Committee Connections to ALEC

Senator Troy Balderson, who co-chairs the study committee, is an active member of the American Legislative Exchange Council (ALEC), according to a 2011 report. His co-chair, Representative Kristina Roegner, is also a member of ALEC. In fact, there are at least seven of the 13 members of the EMSC connected to ALEC:

• Representative Ron Amstutz

• Senator Troy Balderson

• Representative Christina Hagan

• Senator Bob Peterson

• Representative Kristina Roegner

• Senator Bill Seitz (also previously an ALEC Board Member)

• Senator Cliff Hite