March 5, 2025

Ohio Energy Policy Could Take A Massive Step Forward

By: Nolan Rutschilling, Managing Director of Energy Policy at the OEC Action Fund

Ohio is tackling major energy legislation in the first six months of the 136th General Assembly. House Bill 15 (HB 15) and Senate Bill 2 (SB 2) are each chamber’s approach to significant changes to Ohio’s energy policy. Both bills touch on the perceived need for new energy generation, Public Utilities Commission of Ohio (PUCO) rate-making reform, and consumer protections.

As these bills run their course in their respective chambers, the Ohio Environmental Council Action Fund (OEC Action Fund) is prioritizing clean energy and grid reliability in our efforts. The legislation is expected to progress quickly, perhaps passing both chambers by April. This legislation is wide-reaching and impactful, and the OEC Action Fund is collaborating carefully with clean energy, environmental, and consumer advocates. We’re calling on Ohio’s legislators to ensure this energy policy leads Ohio toward an equitable, clean energy future. It should be noted that the elements of this legislation are changing rapidly, with substitute bills being developed frequently. The information in this blog is designed to give a high-level overview of this important legislation. If changes progress, we will update this blog with the latest information. 

The OEC Action Fund has submitted Interested Party Testimony on HB 15 and SB 2.

The Positives:

Repeal of the OVEC Coal Bailouts

Both HB 15 and SB 2 repeal the “Legacy Generation Resource Rider”, the mechanism used to collect the ratepayer bailout. Due to House Bill 6, two failing Ohio Valley Electric Corporation (OVEC) coal plants were bailed out at the cost of Ohio ratepayers. Ohioans have paid nearly $500 million over the past five years, bailing out two coal plants owned in part by Ohio’s utility companies.

The repeal of the OVEC bailout is a significant win for the environmental movement and will result in substantial emissions reductions and considerable cost savings for consumers. This measure is a huge step towards repealing House Bill 6, legislation passed out of a major utility corruption scandal.

However, as the legislation is currently written, the Legacy Generation Rider may continue for several years, up to 2028. The OVEC bailout currently ends in 2030. The legislature must immediately repeal the OVEC Bailout, ensuring no more money is wasted propping up outdated coal plants. 

Eliminating Electric Security Plans (ESPs)

Both HB 15 and SB 2 eliminate ESPs, which allow utilities to come to the PUCO for permission to collect money from customers without complete oversight of a standard rate case. Both bills allow for market-based rate–making, rather than allowing utilities to add additional costs to consumers’ bills. Eliminating ESPs is a huge step for transparency at the Public Utilities Commission.

This is a major win for consumers, but it’s only effective if mini rate cases or other mechanisms don’t become the new ESP loophole. (See more below.)

Solar for Schools Funding

SB 2 includes a provision for the Solar for Schools Fund, which will create low-interest loans for public schools to put solar panels on their rooftops and property. This revolving loan fund will create highly advantageous opportunities for school systems to invest in solar energy. It will create local jobs and educational opportunities while saving money on school utility bills. While the details of the fund need some fine-tuning, the Solar for Schools Fund would be an excellent opportunity for school systems to get some much-needed relief on their utility bills. 

What Should Be Changed

Mini Rate Cases 

While ESPs are being eliminated, the current version of the bills allows utilities to file repeated “mini rate cases” to recoup costs. 

• Unlimited mini rate cases or other rate-making mechanisms could allow utilities to continue adding charges without full financial review.
• There are no clear limits on what can be recovered, potentially allowing utilities to pass unnecessary costs onto customers.

Potential solutions to protect customers:

• Mini rate cases should be capped and limited to specific, justified expenses.
• The rate of return on capital expenditures in mini rate cases should be capped to prevent excessive utility profits at the ratepayers’ expense.
• Any mini rate case expense should expire when a full rate case is filed so that the expenses cannot be stacked. 

Siting Reform

A major focus of this effort is to address the perceived need for more electric generation. One of the elements cited as a barrier for new generation is a burdensome and time-intensive approval process at the Ohio Power Siting Board. This legislation intends to address the issue by significantly shortening the timelines for the OPSB process, particularly for projects in “Priority Investment Areas” — areas with brownfields or former coal mines. While this will present an opportunity for more solar, it will also mean that communities have less of a say in all generation projects proposed in their communities.

While the need for a more efficient grid with more distributed generation is clear, the timeframes for the Ohio Power Siting Board process are shortened to the point of risking necessary environmental and community reviews. Communities and stakeholders must have the opportunity to weigh in on major energy projects in their community. We recommend that time limits on the OSPB case process (both in Priority Investment Areas and not) be increased to continue allowing community input and intervention in the process.

What’s Missing?

Energy Efficiency:

Neither HB 15 nor SB 2 includes any provisions for energy efficiency programs, which are the most cost-effective way to lower energy bills and reduce grid strain. 

• Energy efficiency programs reduce demand and prevent blackouts.
• They save Ohioans money by reducing overall electricity consumption.
• Other states with efficiency programs have seen consumer savings of billions of dollars.

The bills should allow voluntary, regulated energy efficiency programs with consumer protections like opt-out provisions.

Transmission:

The legislation does not address much around transmission — the high voltage power lines that carry power from generation sources to our local grid.

Neither HB 15 nor SB 2 directly addresses transmission planning, even though high-voltage transmission is key to ensuring a reliable, affordable, and modern grid.

• Ohio needs stronger oversight on transmission projects to prevent utilities from making unjustified investments that increase customer costs.
• Transmission planning should focus on integrating new energy resources efficiently to keep electricity prices competitive.

The PUCO should be required to conduct long-term transmission planning that prioritizes cost-effective grid improvements. 

What You Can Do:

Protect OVEC immediate repeal, add energy efficiency programs to HB 15 & SB 2

1. Contact Your Legislators:

• Call for an immediate repeal of OVEC subsidies: Ratepayers should not be funding outdated coal plants for years to come. Currently, language repealing the bailout is in the legislation — our leaders must protect it and ensure the repeal is immediate.
• Push for the inclusion of energy efficiency programs: Legislators must add language allowing utilities to run voluntary, consumer-friendly energy efficiency programs that help lower electric bills and reduce energy waste, preventing blackouts.
• Improving Grid Reliability: By reducing demand, we can avoid expensive infrastructure upgrades, lower consumer costs, and make our grid more resilient. The Solar For Schools Program will help, giving schools more reliable, affordable power.
• Protect Solar For Schools: The Solar For Schools Program will help public schools have more reliable, affordable power.

2. Stay Informed and Engaged:

• The OEC Action Fund is tracking these bills and working to advocate for policies that protect consumers, promote transparency, and ensure Ohio’s transition to a clean energy economy.