April 14, 2026 · Energy Committee · 10,196 words · 16 speakers · 144 segments
This meeting of the Senate Energy Committee will now come to order. Will the clerk please call the roll? Chair Chavez. Here. Vice Chair Landis. Here. Ranking Member Smith. Senator Serino. Senator DeMora. Here. Senator Lang. Here. Senator Manchester. Here. Senator Reinecke. Here. Senator Schaefer. Here. Senator Timken. Here. Senator Weinstein. Senator Wilkin. Yes. And just for the record, Senator Weinstein is excused. We have a quorum. We'll proceed as a committee. And as we start every committee, we'll start with the Pledges of Allegiance. So I'll ask Senator Schaefer to start us off today.
I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.
Members, a copy of the minutes from the March 24th meeting are on your iPads. Please take a moment to review them. The question is, shall the minutes be agreed to? Without objection, the minutes are agreed to. The first order of business is the approval of four governor's appointments to the Ohio Nuclear Development Authority. The biographies of these recommended for the appointment were distributed to the members in advance of this meeting and can also be found on your iPads. Is there any discussion? Seeing none, the Chair recognizes Vice Chair Landis for a motion.
Mr. Chairman, I move that we favorably report the Governor's appointments to the Committee
on Rules and Reference. Are there any objections? Without objection, the appointments of the Governor are favorably reported to the Committee on Rules and Reference. Members please be sure to sign the sheet. The second order of business is the first hearing on substitute House Bill 303.
Representative Ray, you may begin your sponsor testimony when ready.
Welcome to committee.
House Bill 303 is, we believe, the most holistic approach to addressing distributive energy, connectivity in Ohio. Though many of you may recognize this pilot program from the previous General Assembly, the latest version that we are discussing today we hope will serve as a catalyst for a more robust and competitive energy market which puts the individual subscriber first and embodies Ohio's all-of-the-above approach to increased energy supply. House Bill 303 broadens the scope and implementation of community energy by ensuring a more competitive energy market, leveraging free market principles and private capital investments. We believe the model created by House Bill 303 provides the entire rate base the best deal on much needed new distributed generation sources while adding reliability and resiliency to the grid. Community energy under this legislation is defined by a single facility which generates electricity using one or more of the following technologies. individually or in combination, solar, wind, biomass, landfill gas, hydroelectric power, microturbines, natural gas fire generators, energy storage systems, fuel cells, and other emerging generation technologies. This legislation also clarifies the role of the PUCO, outlining both its regulatory and review process of community energy facilities while safeguarding local control and distribution across the grid Through their review the bill requires a report 48 months after the rules of the program take effect to determine, among other variables, a cost-saving impact, total subscribers, location of facilities, and grid resiliencies, both before the House and Senate committees. Ohio's energy deficit continues to grow. Community energy is the fastest way to bring additional power online through private investment, not additional riders passed on to the customer. Multiple smaller-sized distributed generation facilities are more secure, less vulnerable to disruption, more reliable in aggregate, easier to repair, faster to build, and easier to site via local control at the municipal, township, and county level. We simply cannot wait any longer to add additional energy to Ohio's supply. I want to thank this committee for all your work and deliberation on House Bill 15, which helped lay the framework for community energy, and look forward to continuing to work with various stakeholders to allow for a more robust and reliable energy distribution grid that will foster the needs of Ohio's energy customers for year to come. Thank you for your time, and I'd be happy to answer any questions the committee may have.
Thank you, Representative Ray. Any questions from the committee? Senator DeMora.
Thank you, Madam Chair. Excuse me, Mr. Chairman, I'm getting confused already. I'm sorry about that. Mr. Chairman, Representative, does community energy in any way and any kind of cost-shifting to anybody else?
It is specifically prohibited in the bill for there to be any cost shifting as a result of this program.
Follow it. Mr. Chairman, sorry, and I apologize again. Do you have any idea about the typical cost savings to a community subscriber once everything goes into place? The typical, what we might see if someone is involved in the program, what their typical savings might be?
I believe anywhere from 10% to 20%. And that's consistently, and as we've seen weather patterns change, this is only going to continue.
Thank you, Mr. Chairman.
Follow up?
No.
Senator Temkin.
Thank you, Chairman. Good morning, Representative Ray. I guess my question with all of this, this mostly hinges on, as you referred to, private investment. How, I guess, what's the framework for this private investment and how likely are we to see this type of private investment in the state of Ohio?
Oh, I think we will see private investment within the year if this bill passes. I mean, people are ready to come in and start these programs immediately. You know, a lot of people believe solar will be the first, but that doesn't look like it may be the case. It may be biomass. There are lots of folks that are interested in this program. And you know, it's funny. People said to me, well, why would people do this? Why do people recycle? It's for the greater good. And the potential of savings is great enough that private investment is knocking at the door wanting to come in. Projections are this will bring over $150 million under this community energy pilot program alone into the state of Ohio.
Any other questions? Senator Link.
Representative, thank you so much for your testimony today. Part of your written testimony anyway you cited million million in tax revenue and billion in local investment And this might actually be a question for some of the proponents later. I'm just a little curious about what the assumptions were where you came up with those numbers. I don't know if there's been an official pro forma put together, but I'm just a little curious about the assumptions that derive those numbers.
That was one of the proponent testimonies that was presented in the House. I believe they will be coming to proponent testimony here, and they'll be able to give you a better idea of what that actual detail entails.
Thank you, Mr. Chairman.
You mentioned in your testimony that this is a pilot program. Can you explain the parameters of the pilot program?
Well, the pilot program is capped out at 1,500 megawatts, 500 that will be targeted just to brownfields and blighted areas, and then 500 in each of the four EDU areas around the state. Again, at the end of 48 months, there will be a report prepared that will track all the metrics of community energy and how it's worked, and it will be presented before the House and the Senate, And it will be up to the legislator that hear that testimony and see the report to determine whether the pilot program will continue, be expanded, or be discontinued altogether.
Has there been any thought into setting success matrix from the beginning, or you just want to see how it comes out?
Well, I think the projections, I think, are very, very strong. The polling for support of community energy is very, very strong. You know, we hear an awful lot about energy independence these days, and this is one of the programs that can help us get there faster. You know, that will be just one matrix. You know, you talk about the reliability and resiliency of the grid. You talk about the savings. There's lots of degrees of success that I think will be able to be analyzed by future legislators. Yeah, thank you for that.
I would just put some thought into some kind of success criteria that is tangible instead of waiting on where the winds are blowing in 48 months. Thank you very much.
That's a good suggestion, and we will follow through on that.
Any other questions?
Thank you for your testimony. Thank you very much for having me in today.
Written testimony was also submitted by Representative Hoops, which can be found on your iPads. This concludes the first hearing of Substitute House Bill 303. The third order of business is the second hearing on Senate Bill 298. The chair recognizes Vice Chair Landis for a motion.
Mr. Chairman, I move to adopt Amendment 1757-1.
The motion is ordered. Please explain the amendment.
Mr. Chairman, this defines a large industrial customer as being any manufacturer that primarily uses electricity in a process that transforms raw or unfinished materials into a different form or product and that receives services from an electric distribution utility at primary voltage, sub-transmission voltage, or transmission voltage. Expands the bill's prohibition against residential customers being required to incur any cost or to be charged, directly or indirectly for any costs related to net metering, also to include large industrial customers.
Is there any discussion The question is shall the amendment be adopted Are there any objections Senator DeMora object Okay Will the clerk please call the roll Chair Chavez Yes Vice Chair Landis? Yes. Ranking Member Smith? Yes. Senator Serino? Senator DeMora? No. Senator Lange? Yes. Senator Manchester? Yes. Senator Reinecke? Yes. Senator Schaefer? Yes. Senator Timken? Yes. Senator Weinstein? Senator Wilkin. With the majority of the votes the amendment the amendment bill is agreed to. So first off we have a lot of testimonies and we are really jammed up for time today so we're going to limit the testimonies to five minutes max if you can do under that then we really appreciate that. So we're going to get started pretty quickly here. First we have proponent testimony from Director Maureen Willis of the Ohio Consumer Council. Welcome to committee. You may begin when ready.
Thank you. Hello Chairman Chavez, Vice Chair, Landis, Ranking Member Smith and committee members. I hope you and your colleagues are well. Thank you for the opportunity to provide proponent testimony on Senate Bill 298. My name is Maureen Willis. I am the Ohio Consumers Council, the Director of OCC. OCC is the state agency that has been the voice for Ohio's residential consumers for nearly 50 years. I'm testifying on behalf of Ohio's 4.5 million residential households. We thank Senator Romanchuk for proposing a constructive framework to empower private development of off-site energy projects in Ohio. Under this legislation, virtual net metering will become a new option for mercantile customers to meet their power needs and better manage costs. These new energy projects are often located on brownfields, landfills, and abandoned mine lands. They can be beneficial for economic development and environmental protection. OCC supports 298 because this legislation, through the expansion of virtual net metering in Ohio, can have a substantial impact on addressing two critical energy issues in Ohio. Those issues are projected surging demand from data centers and the high monthly electricity bills paid by Ohioans. But more importantly, we support this legislation because it can achieve these goals without government mandate or utility ratepayer support. OCC has long been an advocate for using a market-based approach, whenever appropriate, in achieving desirable outcomes in Ohio's energy markets. The same principle should apply to virtual net metering projects in Ohio. Let the marketplace decide who can best supply electricity to Ohio households and businesses. Government mandates and mandated support from captive utility consumers will likely hurt, not help, Ohio's economy. Senate Bill 298 has several advantages as compared to other legislation in pursuing an all-of-the-above energy strategy that values affordability, reliability, and diversity. The advantages of SB 298 over other similar legislation includes the following. First, the legislation does not create a new mandate. Senate Bill 298 does not require the Public Utilities Commission to establish fixed amount of virtual net metering projects or capacity within a certified territory of an electric utility. Such a mandate can be at times counterproductive because the development of an energy project is site-specific and can and should be developed under the right market conditions. These market conditions can change quickly and a legislative mandate might not be able to predict or influence the market conditions. Second, this legislation does not require the PCO to establish and maintain support via consumer bills to the developers of these virtual net metering projects. Third, the legislation does not favor or discriminate against any specific energy resource or technology. Many types of energy resource and technology can be included in virtual net metering system. Specifically, solar, wind, biomass, landfill gas, or hydropower can be used as fuels. Microturbine, natural gas fire generators, battery storage systems, and fuel cells are also allowed. And fourth, this legislation, most importantly, protects residential consumers from unnecessary costs and cost shift. Under this legislation, residential customers cannot be a customer of a virtual net metering system. SB 298 also prevents cost shifting by prohibiting residential consumers from being required to directly or indirectly incur any costs or to be charged for any of the costs related to virtual net metering. This is the same type of protection afforded to large industrial customers in other similar legislation. Costs should follow benefits. Residential consumers who do not participate in or benefit from virtual net metering projects should not be required to pay for them. In closing, an all-of-the-above energy strategy is the right way forward. In adopting this strategy, all forms of energy source and technology are allowed to compete freely and fairly without government mandates or support from utility consumers. SB 298 is a practical, common-sense approach that will deliver additional power without unnecessary costs to all Ohio households and businesses. I urge you to support this legislation. Thank you.
Thank you for your testimony, and I think you would have hit the five-minute mark exactly, except for that blinking red light threw you off at the end. Any questions from the committee? Senator Mora.
Thank you, Mr. Chairman. So I have a question. I mean, this is not going to mandate that, I mean, this mandate is at no cost because to consumers, and we just passed an amendment to not have any costs go to large industrial customers, so who's going to end up paying for it?
Chair Chavez, to the senator, thank you for the question.
The development of the systems of virtual net metering is paid for by those who are investing in it, the industrial customers who choose to participate in the virtual net metering and the commercial customers who so choose. So it's the participant who willingly takes part in these virtual net metering will be the one who pays.
Follow-up?
No, thank you.
Any other questions? Seeing none we thank you for your testimony Thank you Next we have proponent testimony from Kurt Prinsick with CEP Renewables Welcome to committee. You may begin when ready.
Thank you. Good morning, everyone. Chairman Chavez, Vice Chair Landis, Ranking Member Smith, and members of the Senate Energy Committee, thank you for the opportunity to submit proponent testimony on behalf of Senate Bill 298, a bill which will, among other things, establish virtual net metering program which will allow the development of distributed energy generation on distressed sites in Ohio. My name is Kurt Prinsick, and I am the Senior Project Development Manager for CEP Renewables. Prior to joining CEP in January of 2023, I worked for 31 years at the Ohio EPA, the last 12 years as District Chief of the Northeast District Office. I have decades of experience working on landfills and brownfields and know what a challenge it can be to bring these sites to development. I would like to specifically point out Senate Bill 298's requirement that energy development take place on distressed sites such as landfills and brownfields, which are often underutilized, hard to develop, and do not provide the maximum tax value to a community, if any. Senate Bill 298 does not allow development on farm fields or other properties which do not meet the definition of distressed property. At CEP, we focus our development on landfills and brownfields, and our expertise allows us to take on these challenging projects, repurposing such lands for beneficial use, sustainable energy generation, increased property values, and transforming a distressed property into productive use. Regarding the brownfields, Ohio has had a brownfield program since the late 1990s. This program has been hugely successful with over a billion dollars in taxpayer money invested into redevelopment of hundreds of sites. There, however, remain many of these sites in Ohio that have not been redeveloped for multiple reasons, both economic and environmental. My point here is that the low-hanging fruit has been taken on these brownfields, and what remains are particularly challenging sites. Senate Bill 298 offers a new option for these sites, which can bring billions of dollars of private investment into the state. These sites can be a force multiplier when it comes to economic development. And what do I mean by a force multiplier? Let me provide some real data based on 15 sites that CEP has site control over and currently meet the definition of distressed site in the proposed legislation. These 15 sites are separated throughout Ohio. All 15 of them are landfills and have no other viable development option. These sites, 15 sites, could collectively generate around 210 megawatts of electricity to be placed on the distribution grid and or used behind the meter. Total construction costs for these 15 sites is estimated at over $367 million. That million of private equity coming into Ohio to provide economic stimulus to those respective communities These sites also have the potential to generate almost million annually in pilot tax revenue These 15 sites right now generate less than $200,000. So we're talking over 10 times the amount of annual tax revenue that these sites will be able to provide. And this is at no cost to any of Ohio taxpayers. That's paid for by the developers. And many of these sites, these landfills, are in LMI communities, and I can assure you that that increased tax revenue would be meaningful to those communities. These numbers only represent 15 sites generating 210 megawatts of distributed energy. The opportunity increases if we look at other distressed sites in the state. There is the potential for over a billion dollars in private equity coming into Ohio in the way of construction costs and generating jobs and millions of dollars in pilot tax revenue. Again, at no cost to taxpayers. This can be attainable with the implementation of Senate Bill 298. Thank you for the opportunity to provide proponent testimony and I'm happy to
answer any of your questions. Thank you for your testimony. Any questions from the committee? Senator DeMora. Thank you Mr. Chair. What does this bill allow you
to do that you can't do right now? Chair Chavez and and Senator DeMora, right
Right now in Ohio, we cannot, if we have a site, a landfill, the only way we can provide
electricity to another offtaker is if they are on that site or directly adjacent. So this bill allows us to virtually connect offtakers. I'll give you an example. Say there's a landfill in Solon, Ohio, and the city of, in the Solon School District would like to take this electricity. We're not directly next to Solon. or any of those schools, but we could virtually send that electricity to the Solon schools if they wanted to take that, and we would enter into a power purchase agreement and do that privately. Any other questions?
So we heard from the previous witness that you don't have to participate, so no obligation, but you also don't get the benefits. I probably should have asked the previous witness, but I thought of it now. there's going to be transmission and distribution usage in order to get from these remote sites to wherever the net benefit is. Who pays for that?
We do.
Chair Chavez, yes.
As part of our agreement and our interconnect with the utilities, we would then be paying the distribution charges.
So the owner of the facility pays the EDUs?
Or the offtaker of the electricity through their bills.
Okay.
Any other questions? Thank you for your testimony.
Thank you.
Next, we have proponent testimony from Alex Chapman with Ridge Creek Global. Okay, we will pass him. Moving on, proponent testimony from Cliff Wood from Prairie Wind Group, LLC. Welcome to committee You may begin when ready Good morning
Chair Chavez, Vice Chair Landis, Ranking Member Smith, members of the Senate Energy Committee, thank you for the opportunity to submit proponent testimony on behalf of Senate Bill 298, a bill to create virtual net metering and meter aggregation. My name is Cliff Wood, and I'm co-founder of Prairie Wind Group. We are a Cleveland-based solar developer and consulting company. We're currently working on a project to develop several brownfield sites in Ohio. I'm also on the board. I'm also a board member of the Citizens Utility Board of Ohio. Senate Bill 298 is a force multiplier, if I can borrow the term from my colleague. When coupled with federal investment tax credit-rich 2022 Inflation Reduction Act, SB 298 creates an economic incentive for developers like myself to develop energy facilities on distressed properties that otherwise would remain undeveloped. Let me provide an example. I'm going to kind of focus in. My testimony is to talk about the benefits that I see in some of the communities that we're working in. We're developing a 7-megawatt DC solar project on 21.83-acre brownfield site in the village of New Boston in Sayadaw County. A 7-megawatt solar facility can generate, just to give you a sense, can generate enough power to power about 900 homes. The site location makes it eligible for an added 10% ITC because it's in an energy community, and an added 10% ITC because it's in a low-income area. In total, we expect the project to be eligible for 60% ITC. As you know, ITC is a dollar-for-dollar tax credit. For example, a $10 million solar project that is eligible for 60% ITC would be eligible for a $6 million tax credit. And that's really kind of what I want to focus on. That economic value, that economic value, what our pitch is, that economic value can be shared, shared with the community. In this case, shared with the village of New Boston, shared with Sayota County, shared with the land bank in Sayota County. Under existing Ohio net metering rules, we could only sell a fraction of the power from the 7 megawatt DC system, and that is to only businesses that are contiguous or adjacent to the site. However, when SB 298 becomes law, when it becomes law, we'll be able to sell power from the solar field to hospitals in the area. New Boston, Portsmouth School District will be able to sell power to county and city administration buildings and large industrial concerns and companies in the county. Thus, our ability, the pitch I'm making, the point I'm trying to make is our ability to sell all the power spreads that economic value across numerous stakeholders. Thank you again for this opportunity to provide proponent testimony on behalf of Senate Bill 298.
I'm happy to answer any questions you may have. Thank you for your testimony. Any questions from the committee?
So I have a couple. So is the only way this is economically viable with the intangible tax credits?
I'm sorry, Mr. Chair. I didn't hear your question.
Is the only way that these projects are economically viable or with the intangible tax credits?
The investment tax credit is the oil that lubricates the system. That is correct. Without the tax credits, these projects are not economically viable.
Is there any chance that we're going to have stranded assets if those credits go away?
No. I say no because, again, these are private investments. We've got a case going on right now. There is a new water treatment facility being constructed in New Boston, and our project and our plan is to sell the power to the new filtration plan. That is, our investor will carry the liability and the risk.
Who pays for the connections to the EDUs?
We do.
Okay.
That's part of our overall project costs.
Okay. Okay. And then one of the other comments or topics that you testified in here, seven megawatts would power 900 homes. That seems really strong. That's roughly, I use, using government figures of roughly 10,000 kilowatt hours a year for an average residential home. Okay. Yeah, I just, I'm always questioning figures like that because it's like me saying I can run a marathon because I have, but I have no ability to go out there and run a marathon today. So we need to be talking about realistic numbers. So I'm not beating you up on it. I'm just making a general statement. Sure.
Yep.
Senator Manchester.
Thank you, Chairman. And to follow up on that, I guess to power 900 homes is one thing, but then as I understand it, this bill would not apply to residential. So we're talking about powering, as you mentioned, hospitals, school districts, county administration buildings. What is the direct equivalent there?
I understand that this bill would allow you the opportunity to sell power to all of those entities.
But how much power are you actually able to produce? Because in my mind, the aforementioned entities require a lot more power than 900 homes. So can you kind of help explain?
Mr. Chair, to Senator Manchester, I'll give you an example.
A project this size, again, we have some live examples. We have a water filtration plant that runs 24-7, 365. They use roughly 3.2 million kilowatt hours a year. So that leaves about another 7 million kilowatt hours a year from the system that we can sell to large industrial users. A lot of these users are using in the neighborhood about 2 million, 2.5 million kilowatt hours a year. There's another business nearby probably uses about a million kilowatt hours a year. The school districts, we started initial discussions with the school district. My guess would be they probably in the range of a million million and a half kilowatt hours a year We working with another school district in Cleveland They use about a million a large school district They use about a million and a half kilowatt hours a year So there's ample energy from the site to power not only businesses, but sell the power to county and city administrative buildings, school districts. Our estimation is we'll be able to power the school districts. My guess is about two million kilowatt hours a year. We'll be able to power the new Boston and Portsmouth administrative buildings. Again, my best guess, about a million kilowatt hours a year. So we have ample power from the site to power large businesses, municipal buildings, and schools. And our approach is to determine, and talking with these entities to determine, where's the best value? Who's going to gain the most value from this? Our observation to date is that school districts, school districts we're working with in Cleveland, their cost of power is all in around $0.14 a kilowatt hour. We believe we can sell this power to the school districts in the area of $0.9, $0.10 a kilowatt hour. That delta is the savings to the school district. And as you know, school districts are under a lot of economic pressure these days, and we believe that's going to help the school districts. Same can be said of some of the larger industrial complexes in the area who have actually lower costs of power, but we believe our power purchase agreements can save them money as well.
Follow-up? Follow-up. And all of that is based on your ability to produce that 7 million kilowatt hours as a base?
That is correct.
That's assuming that's what you'll produce, and then you're able to sell that to those other?
That is correct. Again, under current law, we can only sell a fraction of the power. This bill becomes law. We can sell all the power from the energy facility, from the solar facility, to benefit other entities, stakeholders in the community.
Thank you.
I wanted to follow up on that follow-up. So as you get increased demand, who comes first? Are you going to have to sell firm capacity contracts to the high-use customers, or how do you determine who gets the power? Because if you're selling firm contracts, then the price is going to be going up for everyone.
Sure.
Yeah, our approach is to approach the schools first, again,
because the schools, from our observation and working with some other schools, they pay a higher price for power than, say, a large industrial complex. So our approach is to go to the schools first and see if we can help them reduce their electric bills. That's our approach. And then we'll kind of work down. Because, again, it's based on a power purchase agreement. So if an offtaker is paying $0.14 now and we can sell the power to them for $0.10, let's say, then there's benefit for us as well as them. And so we'll start with the folks paying the highest, who have the highest energy bills.
Okay, and I'm just trying to think through, if you have too much of your mix as interruptible power, then in order for folks to continue to function on a continuous basis, they're probably going to have two power sources, right? Dual billing, is that contemplated?
Mr. Chair, the way the bill is written, we would sell the utility. The utility still is metered The entities the businesses or the schools still have a meter to the utility and they have a meter to the solar So as we power as we send power to them they may not provide all the power they need They'll continue to get power from the utility, if I answered your question correctly.
Yeah, so would you send the, for example, would you send the school a bill and the EDU would send the school a bill for the supplemental power that they provided?
Or does the EDU figure all that out? The EDU would figure all that out under this bill, yes.
And are they prepared to do that?
I can't answer that at this point.
All right. Well, you drew the short straw. You got a lot of questions, so it must have been good testimony. I appreciate it. Thinking about it. Thank you for your testimony.
Yeah, thank you.
Next, we have proponent testimony from John Syriac from the Ohio Manufacturers Association. Welcome to committee. You may begin when ready.
Good morning. Chair Chavez, Vice Chair Landis, Ranking Member Smith, and members of the Senate Energy Committee, Thank you for the opportunity to provide testimony today on Senate Bill 298. My name is John Syriac, and I am the founder of Runnerstone, an energy consultancy providing accurate, unbiased information on energy policy, regulation, and market matters. I'm also managing partner of its affiliate, Go Sustainable Energy, which provides accurate, unbiased information on energy to our clients. I serve as the engineer to both the OMA and the OMA Energy Group, and is on the OMA's behalf that I testify today. The OMA represents Ohio's robust manufacturing sector, boasting approximately 1,300 members of all sizes. As you know, affordable and reliable energy is integral to the productivity of these manufacturers. The option to source local energy is increasingly important to manufacturers as it has become economically competitive. Energy is of paramount importance to Ohio's manufacturing competitiveness. Therefore, Ohio's energy policy is of great significance to the OMA. The OMA is supportive of SB 298, which creates a virtual net metering mechanism for local generations sited at brownfields and other similarly affected properties. Additionally, it allows for customer-sited generation to receive the full financial value of its transmission cost savings. The bill allows many types of eligible electric generation technologies for virtual net metering. 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. In that respect, it is important to keep eligible technology definitions broad, that the bill could be improved with a catch-all definition so that any electric generating technology can be eligible. The bill also highlights land and facility types that can readily host electric generation technologies. Some of these host properties may also have existing electrical infrastructure, a coveted resource today that allows for quick interconnection to the grid. While any type of land and facility should be eligible for local generation, this is a good starting point. Most importantly, the bill's virtual net metering provision is significantly improved as compared to previous virtual net metering language and other legislative proposals. Importantly, we don't think it shifts costs to other ratepayers and it does not shift benefits. I'll describe how. A A customer's electric bill recovers costs for electric generation, transmission, and distribution. These three parts of getting electricity to your business are provided by separate companies. SB 298's virtual net metering provision would do the following. For electric generation and for electric transmission, costs and revenue would be appropriately allocated. The subscriber to the project, the business customer, would receive the exact financial benefit, with no cost shifting and no benefit shifting to other ratepayers. For electric distribution a business customer would still pay all costs under current tariff designs which is fair Because of this there would be no cost shifting of distribution charges We shouldn hesitate to attribute electrical transmission and generation savings to the project and customer whose investment produced these savings. With generation and transmission system savings passing through to the right parties, local generation projects enabled by this bill could become very economical. It's these types of economic local generation projects that manufacturers are interested in. This bill could encourage the proliferation of many of these projects which can be built quicker than large transmission connected projects. These local generation projects would also reduce load and strain on the transmission grid and this way it'd be a two-for-one creating more generation and transmission capacity in Ohio. Each project invested in while good for the generation owner and the subscribing customer would create room on the transmission grid for even more economic development in the state. Thank you Mr. Chairman and members of the
committee. I would be happy to answer any questions. Thank you for your testimony. Any questions? Senator DeMora. Thank you, Mr. Chair. So I've heard from a message that there's
going to be an amendment offered by the mercantile customers to make sure that they don't have to pay the costs that we just passed for the large manufacturers, and we're not having residential customers. So again, someone's got to pay for some of this, and who is that going to be if we pass another amendment that no one is paying for it. That's what I'm kind of confused about.
Yeah, the cost attribution is complicated. We were, and I was satisfied with language that was specific on generation, distribution, and transmission. I think some other parties wanted extra language, belt, and suspenders to really, really make sure there was no cost shifting. To be honest, I felt it was redundant. The question of providing even additional language to say mercantile customers shouldn't pay for any cost shifting, I think is okay so long as it doesn't prohibit manufacturers and other large customers from participating. So again, I think the language of the bill pretty clearly excludes any kind of distribution system cost shifting. So I think those customers are still going to pay their distribution bill. They should be required to. They're using the distribution grid. Generation, I think they get credited. They're paying for their generation. Then transmission, I think how it's written is if the project is using the transmission system, I would expect the customer to still pay for that. If it is reducing transmission costs to the utility, we would expect those savings to be passed through. So I think the language is written in a way that it could allow that you have the private investment from the developer, and then any costs or savings get attributed to the subscribing customers so that it doesn't affect other rate payers. And that's really what a key part of bringing our support to this bill, plus the technology neutral piece was important. Follow up.
Thank you, Mr. Chairman.
So if we had not passed the amendment at the beginning of this committee, how would that have affected your thoughts on this bill when large manufacturers would not have been, I guess, directly said they can't pay for any costs?
So, yeah, thank you, Mr. Chairman, Senator DeMora. Our read of the bill, right, and this is my professional opinion, was that it prevented cost shifting and benefit shifting without that amendment. And that's really what we were looking for. Beyond that, I actually get a little bit worried about language that would exclude large customers because we do have manufacturing members that have expressed to me personally that they would want to subscribe to these types of projects and build them. So we need to be careful. I'm okay with language that says, you know, just is very redundant. There should not be cost shifting. I think we're all agreeing on that. We want to make sure large customers, though, once we get that established, we want to make sure large customers can subscribe to these projects and get generation built. And we have heard that from our manufacturing members.
so again i said so i i voted no on the amendment because i thought it was redundant but and you're saying that that it was redundant but so now why do the mercantile people want to have the same amendment because they obviously think that right now they're not covered by anything that was now redundant so that i'm that's why i'm having a tough time explaining that to my own self that the bill expressly says consumers can't be charged anything, but we had to pass an amendment to make sure that large manufacturers weren't, although you say it's redundant, and I thought it might be redundant. And now the mercantile people want to make sure that they don't have it, but you're saying it's redundant. So again, who's right and who's not right?
Mr. Chairman, Senator DeMora, I guess you can ask them that question. why they won that language. I felt the language in the bill, again, had effectively prevented cost shifting. And once we get cost shifting prevented, benefit shifting prevented, you can do lots of different technologies, let customers pick. Then we want the ability for manufacturers to be able to invest and participate in these projects. But other people read the language differently if they felt it wasn't redundant. And just respectfully, I think that's a question for them.
So I think we're all circling around the same thing. I think permissive is good. None of us want any cost shifting. And I'm still trying to wrap my head around some of these things, too. So I'm going back to the previous testimony on a landfill site that could be out in the middle of nowhere. So the generator pays for the hookup. Who pays for the one, two, three, four, five miles of line to get to that site? because the EDUs would argue that's necessary to add power to the grid.
Mr. Chairman, that's an excellent question. My understanding is the generator would pay for that. So right now, common practice, say, on the transmission grid is interconnection costs for generators are paid for the generator, is my understanding. Customers, often that is socialized. Those lines' costs can be socialized through the rate pace, but generators typically cover those costs, so I would expect them to do that there. I suppose if the utilities behave in a different way and they start socializing those costs, there would be concerns. But my expectation and the way I read the language is the generators would pay those costs.
Okay.
Seeing no further questions, we thank you for your testimony.
Thank you.
Next, we have proponent testimony from Spencer Deering from the Ohio Environmental Council Action Fund. Welcome to committee. You may begin when ready.
Thank you so much. Good morning, Chair Chavez, Vice Chair Landis, Ranking Member Smith, and members of the Senate Energy Committee. My name is Spencer Deerig, Vice President of Government Affairs for the Ohio Environmental Council Action Fund. Our organization is dedicated to a clean healthy Ohio where democracy empowers all communities to thrive in harmony with our environment Thank you for the opportunity to provide proponent testimony on Senate Bill 298 The OEC Action Fund supports a clean affordable and reliable energy system SB 298 advances this goal by expanding the market for distributed generation. By increasing distributed grid capacity and reducing reliance on the transmission grid, SB 298 can help control costs. Additional power generation during peak demand reduces PJM capacity prices, which are determined during periods of high usage. Avoiding the most expensive generation sources during peak times benefits all consumers. The OEC Action Fund recommends adding additional land use types to the eligibility criteria. Specifically, we suggest including an energy community that is within a census tract or adjoining census tract with a closed coal mine or retired coal fired, sorry, a retired coal fired power plant. This change would allow communities affected by the energy transition to benefit from virtual net metering projects, thereby expanding development opportunities in former mining or coal energy areas. We believe this addition is essential to support energy communities that have previously depended on coal plants for employment and tax revenues. Senate Bill 298 is a responsible step forward for energy reliability and affordability in Ohio. The OEC Action Fund urges its passage. Ohio has long led in energy choice, allowing residents to decide where their energy comes from and what type to use. This legislation removes barriers to energy access, enabling more Ohio businesses and local governments to benefit from the cost savings of virtual net metering. Thank you so much for the opportunity to testify. I'd be happy to answer any questions.
Thank you for your testimony. Questions from the committee? Ranking Member Smith.
Thanks very much, Mr. Chairman. Thank you, Mr. Daring, for being here. Do you have any idea how many additional sites your suggested change to the legislation could open up? Thanks very much, Mr. Chair. Through the Chairman to the Senator.
I don't have an exact number for you, but I'd be happy to get that information and get a response to the committee as soon as we can.
Yes, send that answer to the Chair, and we'll disseminate it to the committee.
Absolutely, Chairman.
Any further questions? Seeing none, we thank you for your testimony.
Thank you so much.
Next, we have proponent testimony from Kevin Shemp from the Ohio Business Energy Partnership. Welcome to committee. You may begin when ready.
Chairman Chavez, Vice Chair Landis, Ranking Member Smith, and members of the Senate Energy Committee, thank you for the opportunity to provide pro-opponent testimony on Senate Bill 298. My name is Kevin Shemp. I'm a partner at the law firm Dickinson-Wright, testifying on behalf of the Ohio Business Energy Partnership. Formed in 2024, the Ohio Business Energy Partnership is a business organization of large energy users with a mission to increase access to carbon-free energy in the Buckeye State. Our board of directors include Bath & Body Works, the Ohio Chamber of Commerce, Connect Real Estate, the Greater Cleveland Partnership, and the Ohio Environmental Council. In support of our mission, we advocate for public policies that embrace free market principles to strengthen Ohio's competitive energy marketplace. Specifically, we support policies that increase energy choice, invest in transmission infrastructure, remove regulatory barriers to in-state generation, and increase reliability. Senate Bill 298 takes meaningful steps to address many of these policy priorities by expanding Ohio's current virtual net metering law The expansion of virtual net metering to allow for remote power generation via an off-site generation facility bolsters consumer energy choices because more businesses will be capable of producing their own electricity from their preferred fuel source This legislation builds on House Bill 15 and Senate Bill 2 Those bills gave Ohio's largest businesses more choices on how to power their operations by promoting policies that support the adoption of behind the meter systems. However, many companies are unable to pursue behind the meter generation due to cost or land constraints. Adopting Senate Bill 298 will level this playing field give all businesses the same free market choices that Behind the Meter systems offer, since the company can tailor a remote power facility to meet their business's unique operational and sustainability objectives. In addition to expanding energy choices for Ohio businesses, Senate Bill 298 also removes regulatory barriers to in-state generation. Currently, virtual net metering is available in Ohio, but the state's existing policies have hindered its adoptions because they placed significant restraints on the practice. Those restraints have chilled private investments in our state since businesses are unable to access remote generation facilities to supply their power needs. Senate Bill 298 ameliorates this issue and should spur free market investments in Ohio by allowing businesses to access electricity from a remote generation facility within their electricity-certified territory. Importantly, the legislation also takes a balanced approach to its expansion by limiting the locations of these systems to rooftops, mine lands, brownfields, and other similar industrial plots. Likewise, the bill caps the capacity of each virtual net metering system while prohibiting their ability to serve more than one customer. These guardrails, along with the legislation's express statutory requirements that prevent residential and large industrial customers from incurring any cost related to virtual net metering will help ensure the deployment of any new remote power facility is beneficial to Ohio businesses, energy market, and communities. In closing, the Ohio Business Energy Partnership urges this committee to favorably report Senate Bill 298 because its adoption will increase energy options for all Ohio businesses and help support a vibrant energy market that is capable of meeting the state's growing demand. Thank you for the opportunity to testify. I welcome questions from the committee.
Thank you for your testimony and congratulations for slipping so effortlessly ameliorates into your testimony. Bolster, ameliorate, those are trademarks of my testimonies. Questions from the committee, Senator DeMora.
Thank you, Mr. Chair. So, Mr. Schiff, I'm going to ask you a question I asked earlier since you brought it up in your testimony about what prohibits, why does this bill need, what does this bill allow you to do that you can't do right now? and you answered some of it, can you just expound on that answer for me? Sure.
Chairman, Senator DeMora. So Ohio has a virtual net metering statute. It's Ohio Advice Code Section 492867, and it's actually pretty lenient. There's not a lot of prescriptive restrictions in there, but when you go to the administrative code for virtual net metering, it's much more restrictive. There is the requirement that it's on the premise of the user, And so Senate Bill 298, I think, takes the step to allow for that remote power facility so folks can access energy from a facility that's not on their site. And as I mentioned, when you build facilities, generation facilities on your customer premises, the operation, the company is not necessarily there to be a power generator. They're there to be a manufacturer, to do something other than produce energy. And so you have to look to see do they have financial capability Do they have the land access that necessary to build behind the meters those are high barriers to entry Virtual net metering remote power facilities lower that barrier to entry in our opinion and it's why we support the bill.
Any other questions from the committee? Seeing none, we thank you for your testimony.
Thank you.
Next, we have proponent testimony from Stephen Harris of the Sustainable Ohio Public
Energy Council. Welcome to committee. You may begin when ready. Thank you. Chairman Chavez, Vice Chair Landis, Ranking Member Smith, Distinguished Members of the Senate Energy Committee, thank you for the opportunity to be here today to provide testimony and support of Senate Bill 298 on behalf of Sustainable Ohio Public Energy Council, or SOPEC. My name is Stephen Harris, and I'm the Director of Government Relations for SOPEC. SOPEC was formed in 2014 as a Regional Council of Governments under Chapter 167 of the Ohio Revised Code, established by the City of Athens, Village of Amesville, and Athens County as an alternative to the private broker model for energy aggregation, today's SOPEC provides many other public energy services to 52 member communities, political subdivisions, and nonprofits across the state of Ohio. For any members of the committee not already familiar with community choice aggregation, it is a local government tool that allows communities to bundle residents and certain small businesses together in order to aggregate their purchasing power to negotiate electric supply rates. While the local utility continues to deliver electricity and maintain infrastructure, the community selects a competitive supplier for generation. We work closely with our communities to provide competitive electric rates and help achieve their energy and sustainability goals, whatever those may be. Although we have been successful in achieving savings for our communities recently, energy markets have shifted and demand has outpaced supply. We're now hearing consistent concerns lately from community leaders about the rising cost of energy. They are frequently looking to us and other leaders like yourselves to find ways to bring down those costs both fairly and equitably. This brings me to Senate Bill 298. SB 298 is an innovative approach to addressing our need for more energy generation and gives consumers a new option to lower their electric bills. Under the bill, local governments, manufacturers, schools, universities, hospitals, many other types of businesses can receive credits on their electric bills for power generated from off-site resources connected within the same utility service territory. This voluntary, market-driven approach to addressing demand would also not pick winners and losers. Instead, customers would have the ability to choose which type of energy generation makes the most sense to them or the specific type of property available to them. Since these projects can be located on abandoned coal mines or brownfields, this bill has the added benefit of encouraging the redevelopment of those properties, making them productive again. While, of course, we believe there are additional ways that we could be advancing the goal of an increased energy generation, SB 298 is an easy win-win proposition to us, and I would encourage your support. Thank you again for the opportunity to be here and I'm happy to answer any questions you may have.
Thank you for your testimony. Any questions from the committee? Seeing none, I think we're getting worn out. We appreciate your testimony.
Thank you.
And last we have proponent testimony from Tom Bullock with Cub Ohio Advocacy Group. Welcome to committee and you may begin when ready.
Thank you, Chairman Chavez, Vice Chair Landis, Ranging Member Smith, members of the Senate Committee, appreciate the opportunity to provide proponent testimony for Senate Bill 298, a thoughtful bill by Senator Roman Chuck, who was here earlier, to offer commercial customers the option to buy affordably priced reliable in-state power through remote power generation on distressed property that can provide inflation relief before 2030 via quick-to-build medium-scale projects connected to the local power grid. I'm Executive Director Tom Bullock of Citizens Utility Board. We represent consumers across the state. We're pro-innovation and bipartisan in our nonpartisan character as a nonprofit. As Senator Romanchuk testified, this proposal is market-based and can help flatten the peak demand, can flatten peak demand, reduce long-term infrastructure costs, and enhance grid resiliency. It is compatible with HB 15's market competitive framework and would build upon the new grid heat maps that it requires, which can identify locations where generation is needed most. In many ways, this would allow the laboratory of the marketplace to function as House Bill 15 envisions to benefit customers. The marketplace is fast evolving, so I did want to address a question from before, whether tax credits were needed or not. Increasingly the answer is no, because the price for electricity is going up and technology efficiency is improving. So what used to be the financing for energy generation 10 years ago is different today and in the next five years. And what we want to do as a state in our energy and our industrial infrastructure base is to position ourselves to do some new things so that we can position ourselves for more power at a lower cost sooner. This bill does not try to be all things to all people. It does not meet the data center need. But what it can do is help the rest of us who are stuck in the traffic jam at PJM, paying a lot of costs that are going up while we wait for baseload generation to build out, which takes a long time. So it helps businesses, and there was a question earlier, it also helps all customers indirectly. As you know power prices are going up some statistics Because of recent distribution cost increases approved this year by PUCO in two of our major utilities bills will go up between $5.75 a month and $8.20 a month in just the distribution delivery section of your bill. That is in addition to $15 additional monthly for the capacity price increase that we've read about from PJM. So you add $15 plus $5 to $8 monthly for all consumers. Year by year, Ohio bills have gone up 9.5% on average, and industrial users are facing a steeper 26% increase due to rising demand and peak load contributions. There's a disproportionate rise that hurts manufacturing, and I know members of the committee have spoken passionately about that over the months and years. What Senate Bill 298 does, it's a surgical change to allow the land use component of a 27-year-old net metering law to expand. Other speakers have talked about that. I do want to also call out it supports grid reliability by authorizing, for the first time, battery and natural gas fire generation to be co-located. And that can help with reliability around the clock and reduce the strain on the electric grid. It also maintains consumer protections because the cost structure is lean and disciplined and so should not have big ripple effects on others. One witness who may try to testify in the future, Eitri Foundry, said that, observes that there's currently this practice allowed in municipal utility-owned territories. They have home rule. What this bill would do is allow that practice and the benefits to extend to investor-owned utilities. Time is short here, but I want to say the distinguishing point here is that this is medium-tier energy development. Most of our discussion usually talks about baseload, which is important, takes a long time, it's very expensive. Medium development is average of 5 megawatts it quick to market and it cost efficient So there a lot of benefits that we can position the state of Ohio and our consumers to take advantage of in this proposal So in sum remote power generation via commercial net metering can help bridge the gap in the next two to three years, complementing the base load grid build out over the longer term. And I'm out of time. Thank you, Mr. Chairman. Happy to answer questions.
Thank you for your testimony, and I apologize that you had to go last on such a long day where everyone's pulled in different directions. So any questions from the committee? Ranking Member Smith.
Thanks very much, Mr. Chairman. Thank you, Mr. Bullock, for being here. Thank you for your expertise on these issues. Would the summary of your testimony, I mean, you hit on a lot of things, but would the summary of your testimony sort of be that this piece of legislation, Senate Bill 298, would benefit Ohio consumers because it would, while demand is going up, Our problem is that supply has not been able to enter the market, and this would allow supply to enter the market at sort of no risk to rate payers for those costs of entering the market, but they might be able to get some of the benefits of a lower price because there would be more supply in the market.
That's right. Yeah, through the chair to Mr. Smith. That's exactly right. So Ohio for 27 years has had third-party market competition for a generation. Most of the discussion has been about large, large baseload plants. We need those, and we need more of them, but they take a long time to build. What this would do is allow the mid-tier, which has some economies of scale, so the return on investment's better, but it's also quicker to build in, you can construct in two years or less a lot of times in these systems. So while PJM is resolving a number of its challenges and working on the large-scale stuff, Are the rest of us supposed to just pay whatever the market inflation charges us? That doesn't seem to be the best for anybody in Ohio's economy. So this would let mid-sized players and the commercial customers, that could be a hospital, school district, a municipality, a manufacturer, a campus of any type, aggregate meters so you could have multiple buildings and pool that market demand and feed probably not all of it but some of it You might as a business strategy purchase half or 80 of your power this way It a hedge against inflation and in fact it's a hedge at a discount, which is really attractive. So there's a manufacturing CFO, finance director, who said, this lets me move some of my uncontrollable expenses from the expense column into an asset column, and that can be attractive for a business. And I do also want to mention, distributed generation is all fuel sources, and in Pennsylvania, there's examples of natural gas distributed generators. They're probably lower volume producers. They have vertical wells, but they found that fuel cells and more efficient turbines are worthwhile to them. They're in the black. It's a financial strategy for those producers. That's kind of what we mean by in the laboratory of the marketplace, the solution of tomorrow is going to be new and different than it was 20 years ago or even 10 years ago because of technology, which has improved, and the price of electricity is going up. So that's why I think as the federal tax credits phase out, you're going to see that the mature technology of these distributed generation technologies are still going to be viable. We're not going to need to rely on any crutch, but what we have to do is get out of the way.
Help her get out of the way?
We do some of both, we hope.
Thank you for that testimony, and I think we welcome all electrons and all future innovations. We just need to make sure we don't have any gotchas along the way. And, Mr. Chair, if you want to get into all the details, maybe we can schedule a 24-hour hearing, put some cots here.
It's complex. Happy to do our best to make it succinct.
But there's a lot of good Q&A today that I was itching to get into, but for the next time.
Sounds like a great time, but we'll see where we can schedule that.
Not a throw party. All right, thank you.
Okay, so I'll recall Alex Chapman. Did you come in? Nope? Okay. Members, we do have written-only testimony on your iPads for review. with no further business for the committee. We are hereby adjourned.