Mid-Biennium budget will include energy policy changes

The Governor has, in recent months, signaled his intent to roll out a legislative package sometime this spring to offer midstream course correction on items contained in the two-year budget passed last June.¬†Budget Director, Tim Keen, has indicated that the mid-biennium “review” (MBR) will not include a lot of new spending. but instead will give agencies the opportunity to adjust their statutory mission, including the elimination of mandates.

Expected to emerge soon after legislators return from their spring vacation the week of March 13, the MBR remains a mystery to most budget watchers. Rumors include the possibility of three separate bills, each focused on a cluster of state agencies.

Today, the first concrete information emerged about the bill’s contents, thanks to our loose-lipped Governor. Speaking at a gathering of Northeast Ohio business leaders, Kasich revealed that the MBR will contain “a variety of energy policy moves,” but refused to elaborate.

Perhaps offering a hint of what’s in store for budget writers, the Governor’s policy advisors then followed with an overview of the elements of the administration’s energy policy.¬†According to the Plain Dealer, these measures include:

  • shale gas: new rules on well construction, disclosure of fracking chemicals and payments to local governments
  • electrical generation and power transmission: the administration promises to “pilot new sources of power and connect them to customers in new ‘smart grids,’” ensure adequate power for shale gas processing facilities and fix transmission line inadequacies
  • Co-generation: generation of power from the waste heat given off in industrial facilities, such as the blast furnaces in steel mills, has recently been the subject of debate, with renewable energy companies warning that adding this as an eligible component of Ohio’s renewable energy portfolio will reduce demand for solar, wind and other truly green technologies.
  • Natural gas: likely in a sop to the natural gas drillers interested in Ohio’s shale resources, Kasich is promising a number of policies aimed at increasing the use of compressed natural gas in vehicles, including vehicles in the state fleet.

Will the budget, then, be the vehicle for Kasich’s long-promised refinements to Ohio’s oil and gas laws to ensure that “yahoos” and “foreigners” don’t despoil Ohio and extract its mineral wealth, taking it back to their Texas and Oklahoma headquarters? It remains to be seen. What is clear, thanks to the cogeneration talk, is that the renewable energy industry, just getting off the ground in Ohio, may have good reason to be nervous in a Kasich administration. While he’s still not talking about eliminating the renewable portfolio standard, allowing industrial heat to be classified as a “renewable” energy source, he may be cutting off the wind and solar industries at the knees, eliminating a market for their product just as it is coming online.

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