Energy policy in Ohio

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Energy policy in Ohio
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Quick Facts
Energy Department Department of Development, Office of Energy
State Population 11.6 million
Per Capita Income $39,289
Energy Consumption
Total Energy Consumption 3,828 trillion BTU[1][2]
Per Capita Energy Consumption 332 million BTU
Energy Spending
Total Energy Spending $50.996 million
Per Capita Energy Spending $4,419
Price of Residential Natural Gas $15.42 per thousand cubic foot
Price of Electricity 11.99 cents per kWh
See also
Energy on the ballot
Statewide fracking on the ballot
Local fracking on the ballot
Policypedia
Policypedia Energy logo.jpg
Energy Policy Project
Energy policy in the United States
Energy use in the United States
Energy terms and definitions
Energy policy in Ohio
Fracking in Ohio
Energy policy in Ohio depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.

How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in Ohio focuses on implementing more energy efficient technologies while encouraging the already robust business environment.[3]

Energy policy involves tradeoffs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.

See also: "Energy policy in the United States"
See also: "Fracking in Ohio"

Energy overview

State facts

Below are quick facts about Ohio's energy climate.

Ohio

  • is a net importer of electricity.[4]
  • has abundant fossil fuels in the form of coal, but smaller amounts of other resources such as crude oil and natural gas.
  • has renewable energy in the form of biomass, hydropower, wind energy and solar energy.
  • is one of the top ten oil refining and consuming states in the nation.
  • is the 10th largest coal-producing state in the nation.
  • is among the top 10 electric power generators in the nation.
  • has the second-highest oil refining capacity in the upper Midwest after Illinois.
  • mandates that 25 percent of all electricity come from renewable sources by 2024.[5]

In Ohio

  • the industrial sector consumes about one-third of total energy consumed in the state, and the transportation sector consumes about one-fourth.
  • 78 percent of the net electricity generation in 2011 was fueled by coal, and about 11 percent came from natural gas.
  • two of three homes are heated with natural gas, about one in five by electricity.
  • renewable energy sources made up only about 2 percent of net energy generation in 2013.[5]

Available energy resources

Ohio has traditional energy resources such as oil, coal and natural gas available throughout the state. The most plentiful is coal, but there are also substantial natural gas and crude oil resources available from shale and coal-beds. Crude oil is produced mainly from the Appalachian Basin, and the Utica Shale. Natural gas also comes from the Utica Shale, as well as the Marcellus Shale. The natural gas resources of the state are more limited than are its coal resources.[5]

Ohio has renewable energy resources that contributed about 2 percent of the state's energy for electricity in 2013 according to the U.S. Energy Information Administration (EIA). Most renewable energy in Ohio comes from wind energy, but most of the available resource potential is still undeveloped in this area. Ohio is still looking at offshore generation in Lake Erie as a future possibility. Ohio ranks 22nd in the amount of land it uses for farming, and much of the Ohio plains are fertile allowing for productive farming. Farming also provides materials for biofuel and biomass production, as well as some ethanol.

Consumption and prices

Energy consumption in Ohio
OH energy consumption chart.png

Legend[6]
     Transportation       Residential     Industrial       Commercial
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As shown on the pie chart to the right, in 2011 roughly one-third of Ohio's energy use was by the industrial sector (running factories), while about one-quarter was used by both the residential and transportation sectors. Most of the energy used in the state is in the form of coal (primarily for electricity generation), followed by natural gas.[5]

Petroleum is used primarily in the form of gasoline and diesel fuel in Ohio, and prices of both track very close to the national average, though they are much more volatile.[7][8] According to the EIA's February 2014 report, the federal excise tax is 18.40 cents per gallon of gasoline and 24.40 cents per gallon of diesel fuel. In addition to that, Ohio collects a total tax of 28 cents on every gallon of gasoline, diesel and gasohol fuel, which ranks it at the 21st highest in the United States.[9][10] Reformulated gasoline is not required in Ohio.

Comparisons tables

The table below compares Ohio's consumption and spending for energy, as well as prices for natural gas and electricity, and carbon emissions to those of Indiana, which has similar population, resources and consumption needs because of climate and geography. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example:

  • Indiana's rank of eighth in carbon emissions means that carbon emissions are lower in Indiana than in Ohio, which has a rank of fourth.
  • Per capita income in Indiana is 40th in the nation, meaning it is somewhat lower than in Ohio, which at 31st ranks nine places above Indiana's.
  • These two states are have similar population sizes, and are on some of the more populated states in the nation, Ohio is one of the top ten most populous states.
  • Per capita energy consumption in Indiana (at ninth) is somewhat higher than in Ohio (at 21st).
  • Per capita spending in Indiana is much higher because it ranks 18th compared to Ohio's ranking of 27th.
  • Both states have lower than average natural gas prices, though Indiana's price is significantly lower than Ohio's, which is ranked 33rd, compared to Indiana's 47th ranking (A ranking of 47th means that Indiana has the fourth lowest price in the nation, including Washington DC).
  • Electricity prices are lower in Indiana, which was ranked 29th, compared to Ohio's ranking of 19th.
Consumption and Expenditures Comparisons Summary
Type OhioIndianaU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population11.676.6 million16313.9 million
Per Capita Income Average$39,28931$36,90240$42,693
Total Consumption3,828 trillion BTU62,869 trillion BTU1097,301 quadrillion BTU
Per Capita Energy Consumption332 million BTU21440 million BTU9312 million BTU
Total Spending on Energy$50.996 million6$32.519 million14$1,394,088 million
Per Capita Spending on Energy$4,41927$4,99018$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet$15.4233$8.4447$12.48
Price of Electricity, cents per kWh11.991911.552912.31
Total Carbon Dioxide Emissions, million metric tons (2010)249.14219.185,631
*Rank is from highest to lowest.

Two out of three homes in Ohio use natural gas as their main heating source, and about one in five are heated with electricity. For natural gas this rate is well above the 50 percent national average. The lower price of natural gas in Ohio probably explains why so many homes employ it as their primary heat source.[5]

See also: State Energy Rankings to compare all 50 states
Consumption of energy for heating homes in Ohio
Source Ohio 2011 U.S. average 2011
Natural gas 67.1% 49.5%
Fuel oil 2.8% 6.5%
Electricity 21.8% 35.4%
Liquid Petroleum Gases (LPG) 5.3% 5%
Other/none 3% 3.6%

Production and transmission

Ohio produced 1,066.2 trillion BTU of energy in 2011. Of that about 63.7 percent came from coal, and just over 14 percent from nuclear power. The third largest source of energy is natural gas, with about 7 percent of state production. Biofuels and what the U.S. Energy Information Administration classifies as 'other,' which is "assumed to equal consumption of all renewable energies except biofuels."[11]

Energy production by type in Ohio, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Crude oil 28.1 2.64% 0.23%
Natural gas 81.3 7.63% 0.31%
Coal 679.2 63.7% 3.08%
Nuclear 155.8 14.61% 1.88%
Biofuels 62.6 5.87% 3.26%
Other 59.2 5.55% 0.83%

Electricity produced and consumed in Ohio comes primarily from coal, which produces about 60 percent of the total electricity generated. The coal is produced mainly from within the state, but some is also imported from surrounding states, mainly from West Virginia. Nuclear power provides about 15 percent of Ohio's electricity.[12]

Natural gas provides about 18 percent of total electricity generation in Ohio. There are 449 natural gas utilities in Ohio that the Public Utilities Commission of Ohio (PUCO) regulates. There are some small utilities that PUCO doesn't regulate, but these are usually owned and managed by the local government of the area in which they operate.[13] There are seven companies that manage the natural gas pipelines in Ohio. These include BP Oil and Ohio Intrastate Energy LLC.[14][15]

The companies regulated by the PUCO are broken down into smaller subsections, the largest being the renewable energy companies. This is because each of these companies has to be certified under the Ohio Alternative Energy Portfolio Standard. The next largest is the competitive retail electric providers, that are broken up into two smaller and more relevant sections, the competitive retail electric suppliers and the government aggregators. These two groups provide electricity to homes that are signed up with their company.[16] Most of the transmission grid in Ohio is managed by PJM Interconnection. PJM Interconnection is a regional transmission organization (RTO) that coordinates the sale of electricity in the states that are a part of the RTO.[17][18]

Where electricity comes from in Ohio[19]
Type Amount generated (MWh) % of state** % of U.S.**
Petroleum-fired 11,000 0.1% 0.04%
Natural gas-fired 1,892,000 17.82% 0.19%
Coal-fired 6,734,000 63.42% 0.39%
Nuclear 1,616,000 15.22% 0.2%
Hydroelectric 47,000 0.44% 0.01%
Other renewables 157,000 1.48% 0.08%
Total net electricity generation 10,618,000 100% 0.26%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

Energy policy

Policy Issues
Ohio has an Alternative Energy Portfolio Standard, which is a form of a renewable portfolio standard (RPS). Under the RPS legislation utilities must provide 25 percent of their retail electricity from renewable and alternative energy sources by 2025.
See also: "Fracking in Ohio"

Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves tradeoffs in which energy production and prices are weighed against environmental concerns and efficiency. Ohio has an Alternative Energy Portfolio Standard, which is a form of a renewable portfolio standard. Under the RPS legislation utilities must provide 25 percent of their retail electricity from renewable and alternative energy sources by 2025. The legislation that created the standard also includes annual benchmarks that serve as goals in order to ensure that the end goal of 25 percent is met. Half of the 25 percent can be met with "any new, retrofitted, refueled, or repowered generating facility located in Ohio,” including fossil fuels. This means that the renewables portion of the RPS is effectively only 12.5 percent renewables by 2025. Utilities comply with the standard by providing electricity generated from renewable sources such as solar, hydroelectric and other renewable resources. Utilities may also fit old energy systems with renewable systems in order to meet part of the goal. Utilities may also purchase Renewable Energy Certificates (RECs) to help meet the 25 percent requirement. Within the 12.5 percent that must come from renewables is a requirement that half a percent of total consumption come from solar energy.[20] There are differing estimates about the economic impact of these mandates in terms of costs that may affect prices and jobs, as well as the impact on the environment and pollution. Thus, for example, there are many new studies of what is called the "rebound effect," which refers to the fact that "some of the theoretically estimated gain in energy efficiency will be eroded as consumers consume additional goods and services." However, a state economist working for the Public Utilities Commission of Ohio recently reviewed the state's RPS policy and said the policy has been an overall gain for Ohio and its residents. According to the calculations, the renewable generators now producing power have reduced the cost of wholesale power by about 0.15 percent.[21][22][23]

The American Council for an Energy Efficient Economy (ACEEE) is a nonprofit and nonpartisan organization dedicated to improving energy efficiency policy in the United States. Each year, they rank each state by their energy efficiency policies. Ohio was ranked 18th in the nation for energy efficiency by the American Council for an Energy Efficient Economy. Ohio was one of the most improved states in the rankings, because Ohio improved its absolute score by three points in the ACEEE's scoring system. Ohio did not, however, score any points in the transportation section of the rubric.[24]

Major legislation

  • Senate Bill 315 (2011) streamlined the energy regulations in Ohio in order to promote job growth and reform government. The bill includes 10 pillars that denote focal points for the changes. The pillars include utilizing new technologies that grant access to previously unattainable natural resources or increasing energy efficiency.[25]
  • Ohio Revised Code 4928.64 et seq. (2009), created Ohio's Alternative Energy Portfolio Standard, which is a form of Renewable Portfolio Standard (RPS) legislation. The RPS legislation requires that the state produce 12.5 percent of its electricity from renewables, and another 12.5 percent from improved energy technologies.[26]
  • Ohio Revised Code §4928.10 (1999), requires electricity suppliers to disclose details regarding their fuel mix and emissions to customers. The information must be provided to customers annually. The idea is to hold suppliers accountable for the fuels they use and allow customers to make informed decisions about energy policy.[27]
  • Ohio Revised Code 1710 (2009) set up a funding mechanism for energy improvements. The program operates through the Property-Assessed Clean Energy (PACE), which essentially provides funds for property owners to borrow and fund improvements to their energy systems. Subsequent amendments allowed for the creation of special energy improvement districts (SIDs) that offer property owners incentives to install photovoltaic or solar-thermal systems on their property. Municipalities are also authorized to finance geothermal and customer-generated systems (wind energy, for example) as long as they serve most of the owner's on-site load.[28]
  • Ohio Administrative Code 4901:1-40 et seq. (2009), is a part of the RPS standards enacted in Senate Bill 315. This part of the Ohio code allows for companies to purchase solar renewable energy credits (SREC) in order to meet the goal of half a percent of net electricity generation coming from solar energy by 2025. The code also allows for companies to pay a Solar Alternative Compliance Payment (SCAP) for any shortcomings in SREC purchases. Utilities are not allowed to pass along the costs of compliance to their customers.[29]
Policypedia
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State energy policy

State fracking policy

Energy policy terms

Fracking in the U.S.

Energy use in the U.S.

Energy policy in the U.S.


See also
Local fracking on the ballot

Statewide fracking on the ballot

Ballot measures

Below is a list of energy related ballot measures across Ohio. These ballot measures cover issues from fracking bans, to utilities and related tax questions.

Government agencies and committees

  • The Public Utilities Commission of Ohio (PUCO) regulates providers of utility services. PUCO was created in order to ensure Ohio's residents have adequate, safe and reliable public utility services at a reasonable rate. PUCO recently gained responsibility for facilitating competitive utility choices for Ohio consumers. PUCO prevents unfair practices, educates the public and provides mitigation services during conflicts between a company and their customers.[32]
  • The Ohio Development Services Agency manages energy policy, and has a program dedicated to advanced energy and efficiency programs. The program works from within the agency and strives to connect companies and communities to resources, technical and financial, that will serve to increase efficiency.[33]
  • The Ohio Department of Natural Resources broadly serves to protect natural resources and ensure that they are used safely and efficiently. The department is managed by the Ohio Director of Natural Resources. The department operates other divisions, such as the Oil and Gas Resources Division that manage specific kinds of resources. The department provides information on regulations, and programs for those interested in order to educate the public about natural resources in Ohio.[34][35]

Major organizations

  • The Ohio Advanced Energy Economy is a trade association that represents the advanced energy industry. The group defines advanced energy as "all the technologies, products and services that make energy more secure, clean and affordable." The group aims to build and foster an advanced energy economy and drive technological innovation. The group runs an educational institute and advocates policies as well.[36]
  • Ohio Clean Energy Business Association (OCEBA) is an association of businesses in Ohio committed to helping formulate policies that can economically stimulate renewable energy development. The group produces research and information about policies to help policymakers and citizens of Ohio make informed decisions.[37]
  • The Ohio State University Office of Energy and Environment advances global solutions through education, research and outreach. The office does research through the university and helps create innovation that emphasizes how energy needs can be met sustainably.[38]
  • Green Energy Ohio is a not-profit organization dedicated to promoting environmentally and economically sustainable energy policy. The organization supports renewable energy such as solar and wind through educating Ohioans about sustainable energy options. Green Energy Ohio focuses on educating electricity consumers about green power programs that can be implemented as part of daily energy consumption.[39]

In the news

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See also

External links

References

  1. These figures come from the U.S. Energy Information Administration "State Profiles and Energy Estimates, Ohio Overview." Statistics for population and per capita income are for the year 2012; consumption and spending estimates are for 2011; and prices are for October 2013. Updated pricing information is available on the state's EIA profile. Prices will be updated on this page biannually.
  2. U.S. Energy Information Administration, "Ohio Overview," accessed February 5, 2014
  3. Ohio State Government, "Development Services Agency", accessed March 5, 2014
  4. Institute for Energy Research, "Ohio: An Energy and Economic Analysis," September 24, 2013
  5. 5.0 5.1 5.2 5.3 5.4 U.S. Energy Information Administration, "Ohio Profile Analysis," December 18, 2013
  6. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  7. U.S. Energy Information Administration, "Table C2. Energy Consumption Estimates for Major Energy Sources in Physical Units, 2011," accessed March 5, 2014
  8. To compare current gasoline prices in Ohio to the U.S averages, go to GasBuddy.com
  9. U.S. Energy Information Administration, "Petroleum Marketing Monthly," February 2014, accessed March 5, 2014
  10. The Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013
  11. U.S. Energy Information Administration, “State Energy Data System, Production,” accessed February 18, 2014
  12. U.S. Energy Information Administration, "Ohio State Energy Profile," December 18, 2013, accessed March 23, 2014
  13. Public Utilities Commission of Ohio, "Regulated Company List," accessed March 5, 2014
  14. Public Utilities Commission of Ohio, "Regulated Company List," accessed March 5, 2014
  15. Ohio Legal Services, "Utilities: Unregulated Utilities," accessed March 5, 2014
  16. Public Utilities Commission of Ohio, "Regulated Company List," accessed March 5, 2014
  17. Federal Energy Regulatory Commission, "Electric Power Markets: PJM," November 26, 2013
  18. Ohio Legal Services, "Utilities: Unregulated Utilities," accessed March 5, 2014
  19. These figures come from the EIA State Profiles and Energy Estimates U.S. Energy Information Administration, "Ohio Overview," accessed February 5, 2014
  20. Database of State Incentives for Renewables and Efficiency, "Ohio: Alternative Energy Portfolio Standard," November 8, 2012
  21. International Risk Governance Council, "The Rebound Effect: Implications of Consumer Behavior for Robust Energy Policies," accessed March 3, 2014
  22. Scientific American, "How Bad Is the Rebound from Energy Efficiency Efforts?," May 21, 2013, accessed March 3, 2014
  23. Midwest Energy News, "Report: Ohio renewable energy law cuts costs, emissions," September 5, 2013, accessed March 5, 2014
  24. American Council for an Energy-Efficient Economy, "State Energy Efficiency Policy Database," accessed February 27, 2014
  25. Development Services Agency, "SB 315: Ohio’s Energy Policy," accessed March 5, 2014
  26. Database of State Incentives for Renewables and Efficiency, "Alternative Energy Portfolio Standard," November 8, 2012
  27. Database of State Incentives for Renewables and Efficiency, "Fuel Mix and Emissions Disclosure," January 11, 2013
  28. Database of State Incentives for Renewables and Efficiency, "Local Option - Special Energy Improvement Districts," August 10, 2012
  29. Database of State Incentives for Renewables and Efficiency, "Solar Renewable Energy Credits (SRECs)," January 11, 2013
  30. Ohio State Senate, "Energy and Natural Resources Committee," accessed March 5, 2014
  31. Ohio House of Representatives, "Public Utilities Committee," accessed March 5, 2014
  32. Public Utilities Commission of Ohio, "About the Commission," accessed March 5, 2014
  33. Ohio Development Services Agency, "Business: Advanced Energy and Efficiency Programs," accessed March 5, 2014
  34. Ohio Department of Natural Resources, "Home," accessed March 5, 2014
  35. Ohio Department of Natural Resources, "ODNR Division of Oil and Gas Resources," accessed March 5, 2014
  36. Ohio Advanced Energy Economy, "About," accessed March 5, 2014
  37. Green Energy Ohio, "Ohio Clean Energy Business Association (OCEBA)," accessed March 5, 2014
  38. Office of Energy and Environment, "About OEE," accessed March 5, 2014
  39. Green Energy Ohio, "About GEO," accessed March 5, 2014