Alternative Energy Portfolio Standard
Last modified on May 8, 2012.
Rules Regulations Policies Program
|Name||Alternative Energy Resource Standard|
|Incentive Type||Renewables Portfolio Standard|
|Applicable Sector||Investor-Owned Utility, Retail Supplier|
|Eligible Technologies||CHP/Cogeneration, Anaerobic Digestion, Biomass, CHP/Cogeneration, Fuel Cells, Geothermal Electric, Hydroelectric, Landfill Gas, Microturbines, Municipal Solid Waste, Photovoltaics, Solar Thermal Electric, Wind, Others Not Specified, Waste Heat, Energy Storage, Clean Coal, Coal Mine Methane, Advanced Nuclear|
|Energy Category|| Energy Efficiency Incentive Programs, Renewable Energy Incentive Programs
|Credit Trading||Yes (M-RETS, PJM-GATS)|
|Credit Transfers Accepted From|| MIRECS into PJM-GATS|
(Refers to tracking system compatibility only, not RPS eligibility. Please see statutes and regulations for information on facility eligibility)
|Credit Transfers Accepted To|| M-RETS into MIRECS, NAR, NC-RETS|
PJM-GATS into MIRECS
|Standard||25% alternative energy resources by 2025|
|Technology Minimum|| Renewables: 12.5% by 2024 (includes solar-electric minimum)|
Solar-Electric: 0.5% by 2024
|Date added to DSIRE||2008-05-01|
|Last DSIRE Review|| 12/08/2011
In May 2008, Ohio enacted broad electric industry restructuring legislation (S.B. 221) containing advanced energy and renewable energy generation and procurement requirements for the state's electric distribution utilities and electric service companies (hereafter referred to as utilities). This definition encompasses all retail electricity providers except municipal utilities and electric cooperatives. Under the standard, utilities must provide 25% of their retail electricity supply from alternative energy resources by 2025, with specific annual benchmarks for renewable and solar energy resources (see details below).
Eligible Alternative Energy Technologies In order to qualify under the standard, all alternative energy and renewable energy facilities must have a placed-in-service date of January 1, 1998, or later. The Public Utilities Commission of Ohio (PUCO) is authorized to classify any new technology as an alternative energy or renewable energy resource.
Renewable Energy Resources Eligible renewable resources are defined to include the following technologies: solar photovoltaics (PV), solar thermal technologies used to produce electricity, wind, geothermal, biomass, biologically derived methane gas, landfill gas, certain non-treated waste biomass products, solid waste (as long as the process to convert it to electricity does not include combustion), fuel cells that generate electricity, certain storage facilities, and qualified hydroelectric facilities.* In 2012, the legislature added certain cogeneration technologies that meet very specific requirements. Distributed generation systems used by customers to generate electricity using the aforementioned eligible renewable resources are also included.
Advanced Energy Resources Generally, advanced energy resources are defined as any process or technology that increases the generation output of an electric generating facility without additional carbon dioxide emissions. The definition of advanced energy resources explicitly includes clean coal; generation III advanced nuclear power; distributed combined heat and power (CHP); fuel cells that generate electricity; certain solid waste conversion technologies; and demand side management or energy efficiency improvements. Additionally, new or existing mercantile customer-sited advanced energy resources and renewable energy resources that the customer commits into a utility's demand-response, energy efficiency or peak demand programs are also eligible “advanced energy” resources. This designation generally includes any advanced or renewable technology that would be eligible if it were owned by a utility, but is also specifically includes waste heat resources, energy storage technologies, and resources that improve the relationship between real and reactive power.
RPS Compliance Annual Obligation A utility's obligation under the alternative energy standard is calculated using the average of a utility's total retail sales (sold under standard service offer) during the preceding three calendar years as a baseline. At least 50% of the renewable energy requirement must be met by in-state facilities, and the remaining 50% with resources that can be shown to be deliverable into the state. The renewable benchmarks begin in 2009 and increase annually towards an eventual target of 12.5% of retail electricity sales (kWh) by 2024 and thereafter. Utilities are required to file a compliance report by April 15 of each year. These reports must allow and consider public comments. PUCO in turn must review reports and report back to the General Assembly on a yearly basis. The 2012 PUCO report is available here and covers compliance years 2009 and 2010.
Solar Carve Out The requirement also contains a carve-out for solar-energy resources with an ultimate solar target of 0.5% of the total electricity supply in 2024 and thereafter. The total renewable percentage requirement includes the solar specific portion (i.e., the solar requirement is not added on top of the specified renewables requirement). The detailed schedule of annual compliance benchmarks appears below. The law does not identify annual benchmarks for the overall alternative energy standard.
|Year||Renewable (%) Benchmark||Solar (%) Benchmark|
The annual benchmark obligations may be met through the purchase of qualified renewable energy credits (RECs), which are defined as the environmental attributes associated with one megawatt hour of electricity generated by a renewable energy resource. Under the standard, RECs have a lifetime of five years following their acquisition. The utility utilizing RECs for compliance must be a registered member with PJM’s generation attribute tracking system (GATS) and/or Midwest Independent Transmission System Operator (MISO) generation attribute tracking system, and/or other credible tracking system PUCO subsequently approves. Only RECs generated after the effective date of S.B. 221 (July 31, 2008) may be used for compliance.
Annual Review and Alternative Compliance Payments (ACP) PUCO is also tasked with annually reviewing compliance with the renewable and solar energy benchmarks and imposing penalties if the benchmarks are not met. The alternative compliance payment (ACP) for the renewable portion is initially set at $45/megawatt-hour (MWh) but will be adjusted annually by PUCO according to the federal Consumer Price Index, although it will never be less than $45/MWh. The Solar Alternative Compliance Payment (SACP) is set at $450/MWh in 2009, reduced to $400/MWh in 2010 and 2011, and will be reduced by $50 every two years thereafter to a minimum of $50/MWh in 2024. Compliance payments will be deposited into the Ohio Advanced Energy Fund, which provides financial support to renewable energy and energy efficiency projects within the state. Utilities may not pass along the cost of compliance payments to their customers.
The law contains clauses for cost limitations and allowances for non-compliance for reasons beyond a utility's control (i.e., force majeure). Utilities are not required to comply with the annual benchmarks if it is "reasonably expected" to raise their costs by 3% or more above what they would have otherwise been.** The PUCO may require the utility to make solicitations for renewable energy resource credits before the utility may request a force majeure determination. PUCO is authorized to reduce a utility's obligation under the standard if it receives a petition for such treatment from the utility and determines that resources sufficient to meet the obligation are not reasonably available. Under these circumstances a utility may be required to make up the shortfall with additional purchases in subsequent years.
Energy Efficiency Resource Standard S.B. 221 also requires utilities to implement energy efficiency and peak demand reduction programs that achieve a cumulative energy savings of 22% by the end of 2025, and reduce peak demand by 1.0% in 2009 and 0.75% annually thereafter through 2018. These requirements are separate and distinct from the Alternative Energy Resource Standard.
*In order to be considered a renewable resource for the purposes of the renewable resource standard, a hydroelectric facility must meet a series of requirements regarding its environmental impact. However, these requirements do not include a size limitation (e.g., 30 MW) of the type frequently found in state RPS laws.
- S.B. 232 made a slight amendment to this cost limitation provision.
|Contact Name||Stuart Siegfried|
|Department||Ohio Public Utilities Commission|
|Address||180 East Broad Street|
|Phone|| (614) 466-7536
Authorities (Please contact the if there are any file problems.)
|Authority 1:||ORC 4928.64 et seq.|
|Date Effective|| 01/01/2009
|Authority 2:||OAC 4901:1-40 et seq.|
|Date Effective|| 12/10/2009
|Authority 3:||S.B. 289|
|Date Enacted|| 04/13/2012
- Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.