l_133_0905-12 133rd General Assembly Regular Session . B. No. 2019-2020 A BILL To amend sections 3706.02, 3706.03, 4928.644, 1 4928.66, and 4928.6610, to enact sections 2 3706.40, 3706.42, 3706.44, 3706.45, 3706.46, 3 3706.47, 3706.471, 3706.48, 3706.481, 3706.482, 4 3706.49, 3706.50, 4905.311, 4928.46, 4928.47, 5 4928.471, 4928.647, and 4928.661, and to repeal 6 section 4928.6616 of the Revised Code to create 7 the Ohio Clean Air Program, to facilitate and 8 encourage electricity production and use from 9 clean air resources, to facilitate investment to 10 reduce the emissions from other generating 11 technologies that can be readily dispatched to 12 satisfy demand in real time, and proactively 13 engage the buying power of consumers in this 14 state for the purpose of improving air quality 15 in this state. 16 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: Section 1. That sections 3706.02, 3706.03, 4928.644, 4928.66, and 4928.6610 be amended and sections 3706.40, 3706.42, Ñhzih6booakrbnchr6piysz{Ó hzih6booakrbnchr6piysz 17 18 . B. No. l_133_0905-12 Page 2 3706.44, 3706.45, 3706.46, 3706.47, 3706.471, 3706.48, 3706.481, 19 3706.482, 3706.49, 3706.50, 4905.311, 4928.46, 4928.47, 20 4928.471, 4928.647, and 4928.661 of the Revised Code be enacted 21 to read as follows: 22 Sec. 3706.02. (A) There is hereby created the Ohio air 23 quality development authority. Such authority is a body both 24 corporate and politic in this state, and the carrying out of its 25 purposes and the exercise by it of the powers conferred by 26 Chapter 3706. of the Revised Code shall be held to be, and are 27 hereby determined to be, essential governmental functions and 28 public purposes of the state, but the authority shall not be 29 immune from liability by reason thereof. 30 (B) The authority shall consist of seven eleven members as follows: five (1) Five members appointed by the governor, with the 31 32 33 advice and consent of the senate, no more than three of whom 34 shall be members of the same political party, and the 35 (2) The director of environmental protection and the , who shall be a member ex officio without compensation; (3) The director of health, who shall be members a member ex officio without compensation; (4) Four legislative members, who shall be nonvoting 36 37 38 39 40 members ex officio without compensation. The speaker of the 41 house of representatives, the president of the senate, and the 42 minority leader of each house shall each appoint one of the 43 legislative members. The legislative members may not vote but 44 may otherwise participate fully in all the board's deliberations 45 and activities. Each 46 Each appointive member shall be a resident of the state, 47 . B. No. l_133_0905-12 Page 3 and a qualified elector therein. The members of the authority 48 first appointed shall continue in office for terms expiring on 49 June 30, 1971, June 30, 1973, June 30, 1975, June 30, 1977, and 50 June 30, 1978, respectively, the term of each member to be 51 designated by the governor. Appointed members' terms of office 52 shall be for eight years, commencing on the first day of July 53 and ending on the thirtieth day of June. Each appointed member 54 shall hold office from the date of his appointment until the end 55 of the term for which he was appointed. Any member appointed to 56 fill a vacancy occurring prior to the expiration of the term for 57 which his the member's predecessor was appointed shall hold 58 office for the remainder of such term. Any appointed member 59 shall continue in office subsequent to the expiration date of 60 his the member's term until his the member's successor takes 61 office, or until a period of sixty days has elapsed, whichever 62 occurs first. A member of the authority is eligible for 63 reappointment. Each appointed member of the authority, before 64 entering upon his official duties, shall take an oath as 65 provided by Section 7 of Article XV, Ohio Constitution. The 66 governor may at any time remove any member of the authority for 67 misfeasance, nonfeasance, or malfeasance in office. The 68 authority shall elect one of its appointed members as chairman 69 chairperson and another as vice-chairman vice-chairperson, and 70 shall appoint a secretary-treasurer who need not be a member of 71 the authority. Four members of the authority shall constitute a 72 quorum, and the affirmative vote of four members shall be 73 necessary for any action taken by vote of the authority. No 74 vacancy in the membership of the authority shall impair the 75 rights of a quorum by such vote to exercise all the rights and 76 perform all the duties of the authority. 77 Before (C) Except as provided in division (D) of this 78 . B. No. l_133_0905-12 Page 4 section, before the issuance of any air quality revenue bonds 79 under Chapter 3706. of the Revised Code, each appointed member 80 of the authority shall give a surety bond to the state in the 81 penal sum of twenty-five thousand dollars and the secretary- 82 treasurer shall give such a bond in the penal sum of fifty 83 thousand dollars, each such surety bond to be conditioned upon 84 the faithful performance of the duties of the office, to be 85 executed by a surety company authorized to transact business in 86 this state, and to be approved by the governor and filed in the 87 office of the secretary of state. Each Except as provided in 88 division (B)(4) of this section, each appointed member of the 89 authority shall receive an annual salary of five thousand 90 dollars, payable in monthly installments. Each member shall be 91 reimbursed for his the actual expenses necessarily incurred in 92 the performance of his official duties. All expenses incurred in 93 carrying out Chapter 3706. of the Revised Code shall be payable 94 solely from funds provided under Chapter 3706. of the Revised 95 Code, appropriated for such purpose by the general assembly, or 96 provided by the controlling board. No liability or obligation 97 shall be incurred by the authority beyond the extent to which 98 moneys have been so provided or appropriated. 99 (D) The four legislative members appointed under division 100 (B)(4) of this section shall be exempt from the requirement 101 under division (C) of this section to give a surety bond. 102 Sec. 3706.03. (A) It is hereby declared to be the public 103 policy of the state through the operations of the Ohio air 104 quality development authority under this chapter to contribute 105 toward one or more of the following: to 106 (1) To provide for the conservation of air as a natural resource of the state, and to ; 107 108 . B. No. l_133_0905-12 Page 5 (2) To prevent or abate the pollution thereof, to ; 109 (3) To provide for the comfort, health, safety, and 110 general welfare of all employees, as well as all other 111 inhabitants of the state, to ; 112 (4) To assist in the financing of air quality facilities 113 for industry, commerce, distribution, and research, including 114 public utility companies, to ; 115 (5) To create or preserve jobs and employment 116 opportunities or improve the economic welfare of the people, or 117 assist and cooperate with governmental agencies in achieving 118 such purposes; 119 (6) To maintain operations of certified clean air 120 resources, as defined in section 3706.40 of the Revised Code, 121 that, through continued operation, are expected to provide the 122 greatest quantity of carbon-dioxide-free electric energy 123 generation, and to encourage the operation and development of 124 other clean air resources that provide carbon-dioxide-free 125 electric energy generation; 126 (7) To encourage reduced emissions resources, as defined 127 in section 3706.40 of the Revised Code, to reduce the resources' 128 emissions. 129 (B) In furtherance of such public policy the Ohio air 130 quality development authority may initiate do any of the 131 following: 132 (1) Initiate, acquire, construct, maintain, repair, and 133 operate air quality projects or cause the same to be operated 134 pursuant to a lease, sublease, or agreement with any person or 135 governmental agency; may make 136 . B. No. l_133_0905-12 (2) Make loans and grants to governmental agencies for the Page 6 137 acquisition or construction of air quality facilities by such 138 governmental agencies; may make 139 (3) Make loans to persons for the acquisition or 140 construction of air quality facilities by such persons; may 141 enter 142 (4) Enter into commodity contracts with, or make loans for 143 the purpose of entering into commodity contracts to, any person, 144 governmental agency, or entity located within or without the 145 state in connection with the acquisition or construction of air 146 quality facilities; and may issue 147 (5) Issue air quality revenue bonds of this state payable 148 solely from revenues, to pay the cost of such projects, 149 including any related commodity contracts. 150 (C) Any air quality project shall be determined by the 151 authority to be not inconsistent with any applicable air quality 152 standards duly established and then required to be met pursuant 153 to the "Clean Air Act," 84 Stat. 1679 (1970), 42 U.S.C.A. 1857, 154 as amended. Any resolution of the authority providing for 155 acquiring or constructing such projects or for making a loan or 156 grant for such projects shall include a finding by the authority 157 that such determination has been made. Determinations by 158 resolution of the authority that a project is an air quality 159 facility under this chapter and is consistent with the purposes 160 of section 13 of Article VIII, Ohio Constitution, and this 161 chapter, shall be conclusive as to the validity and 162 enforceability of the air quality revenue bonds issued to 163 finance such project and of the resolutions, trust agreements or 164 indentures, leases, subleases, sale agreements, loan agreements, 165 and other agreements made in connection therewith, all in 166 . B. No. l_133_0905-12 accordance with their terms. Sec. 3706.40. As used in sections 3706.40 to 3706.50 of the Revised Code: Page 7 167 168 169 (A) "Clean air resource" means an electric generating 170 facility that produces electricity from the utilization or 171 consumption of any form of primary energy that emits zero carbon 172 dioxide and that satisfies all of the following criteria: 173 (1) The facility is not wholly or partially owned by a 174 municipal or cooperative corporation or a group, association, or 175 consortium of those corporations. 176 (2) The facility is not used to supply customers of a 177 wholly owned municipal or cooperative corporation or a group, 178 association, or consortium of those corporations. 179 (3) Either of the following: 180 (a) The facility has made a significant historical 181 contribution to the air quality of the state by minimizing 182 emissions that result from electricity generated in this state. 183 (b) The facility will make a significant contribution 184 toward minimizing emissions that result from electric generation 185 in this state. 186 (4) If the facility is designed for, or capable of, 187 operation at an aggregate capacity of twenty or more megawatts, 188 the facility is interconnected with PJM interconnection, L.L.C., 189 or its successor organization. 190 (5) Regardless of the location of the meter, the facility is any of the following: (a) A major utility facility in this state as defined in 191 192 193 . B. No. l_133_0905-12 section 4906.01 of the Revised Code; (b) An economically significant wind farm in this state as defined in section 4906.13 of the Revised Code; (c) A small wind farm in this state as defined in section 303.213 of the Revised Code. (B) "Reduced emissions resource" means an electric Page 8 194 195 196 197 198 199 generating facility that emits a reduced amount of carbon 200 dioxide in the production of electricity from the utilization or 201 consumption of any form of primary energy that satisfies all of 202 the following criteria: 203 (1) The facility is not wholly or partially owned by a 204 municipal or cooperative corporation or a group, association, or 205 consortium of those corporations. 206 (2) The facility is not used to supply customers of a 207 wholly owned municipal or cooperative corporation or a group, 208 association, or consortium of those corporations. 209 (3) The facility will make a significant contribution 210 toward minimizing emissions that result from electric generation 211 in this state. 212 (4) The facility is interconnected with PJM interconnection, L.L.C., or its successor organization. (5) The facility is a major utility facility in this state as defined in section 4906.01 of the Revised Code. (C) "Program year" means the twelve-month period beginning 213 214 215 216 217 the first day of June of a given year of the Ohio clean air 218 program and ending the thirty-first day of May of the following 219 year. 220 . B. No. l_133_0905-12 (D) "Electric distribution utility" and "renewable energy Page 9 221 resource" have the same meanings as in section 4928.01 of the 222 Revised Code. 223 (E) "Annual capacity factor" means the actual energy 224 produced in a year divided by the energy that would have been 225 produced if the facility was operating continuously at the 226 maximum rating. 227 (F) "Clean air credit" means a credit that represents the 228 clean air attributes of one megawatt hour of electric energy 229 produced from a certified clean air resource. 230 Sec. 3706.42. (A)(1) There is hereby created the Ohio clean air program. (2)(a) In 2029, the Ohio air quality development authority 231 232 233 shall conduct an inquiry to determine whether it is in the 234 public interest to continue the Ohio clean air program after 235 2030. 236 (b) After the inquiry is complete, the authority shall submit a report of its findings to the general assembly. (B) Any person owning or controlling an electric 237 238 239 generating facility that meets the definition of a clean air 240 resource or reduced emissions resource in section 3706.40 of the 241 Revised Code may submit a written application with the Ohio air 242 quality development authority for certification as a clean air 243 resource or reduced emissions resource to be eligible to 244 participate in the Ohio clean air program. Applications shall be 245 submitted by the first day of February for any program year 246 beginning the first day of June of the same calendar year. 247 (C) Applications shall include all of the following information: 248 249 . B. No. l_133_0905-12 (1) The in-service date and estimated remaining useful life of the resource; Page 10 250 251 (2) For an existing resource, the quantity of megawatt 252 hours generated by the resource annually during each of the 253 previous five calendar years during which the resource was 254 generating, and the annual capacity factor for each of those 255 calendar years; 256 (3) A forecast estimate of the annual quantity of megawatt 257 hours to be generated by the resource and the projected annual 258 capacity factor over the remaining useful life of the resource; 259 (4) For a clean air resource, a forecast estimate of the 260 emissions that would occur in this state during the remaining 261 useful life of the resource if the resource discontinued 262 operations prior to the end of the resource's useful life; 263 (5) Verified documentation demonstrating all of the following: (a) That certification as a clean air resource or reduced 264 265 266 emissions resource and participation in the Ohio clean air 267 program will permit the resource to reduce future emissions per 268 unit of electrical energy generated in this state; 269 (b) That without certification as a clean air resource or 270 reduced emissions resource, the positive contributions to the 271 air quality of this state that the resource has made and is 272 capable of making in the future may be diminished or eliminated; 273 (c) That the clean air resource or reduced emissions 274 resource meets the definition of a clean air resource or reduced 275 emissions resource, as applicable, in section 3706.40 of the 276 Revised Code; 277 . B. No. l_133_0905-12 (d) That the person seeking certification owns or controls the resource. Page 11 278 279 (6) The resource's nameplate capacity; 280 (7) For a reduced emissions resource, the level of funding 281 requested from the Ohio clean air program; 282 (8) Any other data or information that the authority 283 requests and determines is necessary to evaluate an application 284 for certification as a clean air resource or reduced emissions 285 resource or to demonstrate that certification would be in the 286 public interest. 287 (D) The authority shall post on the authority's web site 288 all applications and nonconfidential supporting materials 289 submitted under this section. 290 (E) Interested persons may file comments not later than 291 twenty days after the date that an application is posted on the 292 authority's web site. All comments shall be posted on the 293 authority's web site. An applicant may respond to those comments 294 not later than ten days thereafter. 295 Sec. 3706.44. (A)(1) On or before the thirty-first day of 296 March, the Ohio air quality development authority shall review 297 all applications timely submitted under section 3706.42 of the 298 Revised Code and issue an order certifying a clean air resource 299 or reduced emissions resource that meets the definition of a 300 clean air resource or reduced emissions resource, as applicable, 301 in section 3706.40 of the Revised Code. 302 (2)(a) A clean air resource shall remain certified as a 303 clean air resource as long as the resource continues to meet the 304 definition of a clean air resource in section 3706.40 of the 305 Revised Code. 306 . B. No. l_133_0905-12 (b) A reduced emissions resource may be certified for one Page 12 307 or more program years. A reduced emissions resource shall be 308 eligible to remain certified as a reduced emissions resource, 309 provided that the resource continues to meet the definition of a 310 reduced emissions resource in section 3706.40 of the Revised 311 Code and any additional requirements set by the authority. 312 (B) In the event the authority does not issue an order 313 under division (A) of this section by the thirty-first day of 314 March, each electric generating facility included in a timely 315 and properly filed application shall be deemed a clean air 316 resource or reduced emissions resource, as applicable, that is 317 eligible for participation in the Ohio clean air program. 318 (C)(1) The authority may decertify a clean air resource or 319 reduced emissions resource at any time if it determines that 320 certification is not in the public interest. 321 (2) Before decertifying a clean air resource or reduced 322 emissions resource, the authority shall hold a public hearing 323 and allow for public comment. 324 Sec. 3706.45. (A) During the last year in which 325 certification as a reduced emissions resource is effective under 326 section 3706.44 of the Revised Code, the Ohio air quality 327 development authority shall reevaluate the eligibility of the 328 reduced emissions resource for participation in the Ohio clean 329 air program. At the time of reevaluation, if the reduced 330 emissions resource still meets the definition of a reduced 331 emissions resource in section 3706.40 of the Revised Code and 332 any additional requirements that were imposed by the authority 333 when the resource was last certified, the authority shall 334 recertify the resource for one or more program years. 335 . B. No. l_133_0905-12 Page 13 (B)(1) If the authority recertifies the reduced emissions 336 resource under division (A) of this section, the authority may 337 impose requirements on the reduced emissions resource that are 338 in addition to any requirements that were imposed when the 339 resource was last certified. If additional requirements are 340 imposed at the time of recertification, the resource shall 341 comply with both the old requirements and the new requirements. 342 (2) The authority shall adopt rules in accordance with 343 Chapter 119. of the Revised Code to determine the amount of time 344 during which a reduced emissions resource must come into 345 compliance with the new requirements. 346 Sec. 3706.46. (A) For the purpose of funding benefits 347 provided by the Ohio clean air program, there is hereby created 348 the Ohio clean air program fund. The fund shall be in the 349 custody of the state treasurer but shall not be part of the 350 state treasury. The fund shall consist of the charges under 351 section 3706.47 of the Revised Code. All interest generated by 352 the fund shall be retained in the fund and used for the purpose 353 of funding the Ohio clean air program. 354 (B) The treasurer shall distribute the moneys in the Ohio 355 clean air program fund in accordance with the directions 356 provided by the Ohio air quality development authority. 357 Sec. 3706.47. (A) Beginning January 1, 2020, each retail 358 electric customer of an electric distribution utility in this 359 state shall pay a per-account monthly charge, which shall be 360 billed and collected by each electric distribution utility and 361 remitted to the state treasurer for deposit into the Ohio clean 362 air program fund, created under section 3706.46 of the Revised 363 Code. 364 . B. No. l_133_0905-12 (B) The monthly charges established under division (A) of this section shall be: (1) For customers classified by the utility as residential: Page 14 365 366 367 368 (a) For the year 2020, fifty cents; 369 (b) For the year 2021 and each year thereafter, two 370 dollars and fifty cents. (2) For customers classified by the utility as commercial, except as provided in division (B)(4) of this section: 371 372 373 (a) For the year 2020, fifteen dollars; 374 (b) For the year 2021 and each year thereafter, twenty 375 dollars. (3) For customers classified by the utility as industrial, 376 377 two hundred fifty dollars, except as provided in division (B)(4) 378 of this section; 379 (4) For customers classified by the utility as commercial 380 or industrial that exceeded forty-five million kilowatt hours of 381 electricity at a single location in the preceding year, two 382 thousand five hundred dollars. 383 (C) For purposes of division (B) of this section, the 384 classification of residential, commercial, and industrial 385 customers shall be consistent with the utility's reporting under 386 its approved rate schedules. 387 (D) A customer required to pay the monthly charge under 388 divisions (A) and (B) of this section shall be exempt from 389 paying costs associated with the requirements under section 390 4928.64 of the Revised Code, unless the customer opts, in 391 . B. No. l_133_0905-12 Page 15 accordance with section 3706.471 of the Revised Code, to pay 392 those costs in addition to the charge imposed under this 393 section. 394 (E) An electric distribution utility may submit an 395 application to the Ohio air quality development authority for 396 reimbursement, from the Ohio clean air program fund, of the 397 following costs to comply with the requirements under section 398 4928.64 of the Revised Code: 399 (1) Costs prudently incurred for contractual obligations 400 that existed prior to the effective date of this section by an 401 electric distribution utility in reliance on the requirements 402 under section 4928.64 of the Revised Code; 403 (2) Costs prudently incurred by an electric distribution 404 utility associated with programs approved by the public 405 utilities commission under section 4928.64 of the Revised Code 406 that are modified or eliminated as a result of H.B. 6 of the 407 133rd general assembly, including any costs to discontinue those 408 programs. 409 (F) Upon receipt of an application made under division (E) 410 of this section and upon verification of the prudently incurred 411 costs in the application, the authority shall direct the 412 treasurer of state to remit money from the Ohio clean air 413 program fund to the electric distribution utility as 414 reimbursement for those costs. 415 Sec. 3706.471. Any customer opting to pay costs associated 416 with the requirements under section 4928.64 of the Revised Code 417 shall do so by providing a written notice of intent to opt in to 418 pay those costs to the electric distribution utility from which 419 it receives service. The customer shall submit a complete copy 420 . B. No. l_133_0905-12 Page 16 of the opt-in notice to the secretary of the public utilities 421 commission. The notice shall include all of the following: 422 (A) A statement indicating that the customer has elected to opt in; 423 424 (B) The effective date of the election to opt in; 425 (C) The account number for each customer account to which 426 the opt in shall apply; 427 (D) The physical location of the customer's load center. 428 Sec. 3706.48. Each owner of a certified clean air resource 429 or certified reduced emissions resource shall report to the Ohio 430 air quality development authority, not later than seven days 431 after the close of each month during a program year, the number 432 of megawatt hours the resource produced in the previous month. 433 Sec. 3706.481. A certified clean air resource shall earn a 434 clean air credit for each megawatt hour of electricity it 435 produces. 436 Sec. 3706.482. (A)(1) Not later than fourteen days after 437 the close of each month during a program year, the Ohio air 438 quality development authority shall direct the treasurer of 439 state to remit money from the Ohio clean air program fund, as 440 long as there is sufficient money in the fund, to each owner of 441 a certified clean air resource in the amount equivalent to the 442 number of credits earned by the resource during the previous 443 month multiplied by the credit price. 444 (2) If the money in the Ohio clean air program fund is 445 insufficient to pay for all the credits earned by a resource, 446 the unpaid credits shall be paid first in the next monthly 447 payment period. 448 . B. No. l_133_0905-12 (B)(1) The price for each clean air credit in the first program year shall be nine dollars. (2) In subsequent program years, the price may be adjusted Page 17 449 450 451 for inflation using the gross domestic product implicit price 452 deflator as published by the United States department of 453 commerce, bureau of economic analysis. 454 Sec. 3706.49. (A) To facilitate air quality development 455 related capital formation and investment by or in a certified 456 clean air resource or certified reduced emissions resource, the 457 Ohio air quality development authority may pledge a portion of 458 moneys that may, in the future, be accumulated in the Ohio clean 459 air program fund for the benefit of any certified clean air 460 resource or certified reduced emissions resource, provided the 461 resource agrees to be bound by the conditions the authority may 462 attach to the pledge. 463 (B) The authority shall not be required to direct 464 distribution of moneys in the Ohio clean air program fund unless 465 or until there are adequate moneys available in the Ohio clean 466 air program fund. Nothing herein shall cause any such pledge to 467 be construed or applied to create, directly or indirectly, a 468 general obligation of or for this state. 469 Sec. 3706.50. (A) The Ohio air quality development 470 authority shall conduct an annual audit of the Ohio clean air 471 program. 472 (B) Not later than ninety days after the effective date of 473 this section, the authority shall adopt rules under Chapter 119. 474 of the Revised Code that are necessary to begin implementation 475 of the Ohio clean air program. The rules adopted under this 476 division shall include provisions for both of the following: 477 . B. No. l_133_0905-12 Page 18 (1) Tracking the number of clean air credits earned by 478 each certified clean air resource during each month of a program 479 year, based on the information reported under section 3706.48 of 480 the Revised Code; 481 (2) The annual audit required under division (A) of this section. 482 483 (C) Not later than two hundred seventy-five days after the 484 effective date of this section, the authority shall adopt rules 485 under Chapter 119. of the Revised Code that are necessary for 486 the further implementation and administration of the Ohio clean 487 air program. 488 Sec. 4905.311. In order to promote job growth and 489 retention in this state, the public utilities commission, when 490 ruling on a reasonable arrangement application under section 491 4905.31 of the Revised Code, shall attempt to minimize electric 492 rates to the maximum amount possible on trade-exposed industrial 493 manufacturers. 494 Sec. 4928.46. (A) In the event that the federal energy 495 regulatory commission authorizes a program by which this state 496 may take action to satisfy any portion of the capacity resource 497 obligation associated with the organized wholesale market that 498 functions to meet the capacity, energy services, and ancillary 499 services needs of consumers in this state, the public utilities 500 commission shall promptly review the program and submit a report 501 of its findings to the general assembly. 502 (B) The report shall include any recommendations for 503 legislation that may be necessary to permit this state to 504 beneficially participate in any such program. 505 (C) The report shall incorporate the policy of 506 . B. No. l_133_0905-12 Page 19 facilitating the state's effectiveness in the global economy by 507 minimizing any adverse impact on trade-exposed industrial 508 manufacturers. 509 Sec. 4928.47. (A) As used in this section, "clean air resource" means any of the following: (1) A clean air resource as defined in section 3706.40 of the Revised Code; 510 511 512 513 (2) A customer-sited renewable energy resource; 514 (3) A renewable energy resource that is a self-generator. 515 (B)(1) Through its general supervision, ratemaking, cost 516 assignment, allocation, rate schedule approval, and rulemaking 517 authority, as well as its authority under section 4905.31 of the 518 Revised Code, the public utilities commission shall facilitate 519 and encourage the establishment of retail purchased power 520 agreements having a term of three years or more through which 521 consumers commit to satisfy a material portion of their 522 electricity requirements from the output of a clean air 523 resource. 524 (2) The commission's application and administration of 525 this section shall be the same for all clean air resources 526 regardless of whether the resource is certified or eligible for 527 certification under the Ohio clean air program created under 528 section 3706.42 of the Revised Code. 529 (3) In addition to any other benefits that may be 530 available as a result of the commission's application of its 531 authority under this section, on the effective date of a retail 532 purchased power agreement, the commission may exempt such 533 purchasing consumer from all of the following, provided the 534 customer agrees to forgo the benefits from compliance with the 535 . B. No. l_133_0905-12 Page 20 programs established in sections 3706.42, 4928.64, and 4928.66 536 of the Revised Code: 537 (a) The Ohio clean air program charge established in section 3706.47 of the Revised Code; (b) The renewable energy charge for compliance with section 4928.64 of the Revised Code; (c) The energy efficiency and peak demand reduction charge for compliance with section 4928.66 of the Revised Code. (C)(1) Not later than ninety days after the effective date 538 539 540 541 542 543 544 of this section, the commission shall promulgate rules under 545 Chapter 119. of the Revised Code as necessary to begin the 546 implementation of this section. 547 (2) Not later than two hundred seventy-five days after the 548 effective date of this section, the commission shall promulgate 549 rules for further implementation and administration of this 550 section. 551 Sec. 4928.471. (A) Except as provided in division (D) of 552 this section, not earlier than thirty days after the effective 553 date of this section, an electric distribution utility may file 554 an application to implement a decoupling mechanism for the 2019 555 calendar year and each calendar year thereafter. For an electric 556 distribution utility that applies for a decoupling mechanism 557 under this section, the base distribution rates for residential 558 and commercial customers shall be decoupled to the base 559 distribution revenue and revenue resulting from implementation 560 of section 4928.66 of the Revised Code and recovered pursuant to 561 an approved electric security plan under section 4928.143 of the 562 Revised Code, as of the twelve-month period ending on December 563 31, 2018. An application under this division shall not be 564 . B. No. l_133_0905-12 Page 21 considered an application under section 4909.18 of the Revised 565 Code. 566 (B) The commission shall issue an order approving an 567 application for a decoupling mechanism filed under division (A) 568 of this section not later than sixty days after the application 569 is filed. Before approving the application, the commission shall 570 verify that the rate schedule or schedules are designed to 571 recover the electric distribution utility's 2018 annual revenues 572 as described in division (A) of this section and that the 573 decoupling rate design is aligned with the rate design of the 574 electric distribution utility's existing base distribution 575 rates. The decoupling mechanism shall recover an amount equal to 576 the base distribution revenue and revenue resulting from 577 implementation of section 4928.66 of the Revised Code and 578 recovered pursuant to an approved electric security plan under 579 section 4928.143 of the Revised Code, as of the twelve-month 580 period ending on December 31, 2018. The decoupling mechanism 581 shall be adjusted annually thereafter to reconcile any over 582 recovery or under recovery from the prior year and to enable an 583 electric distribution utility to recover the same level of 584 revenues described in division (A) of this section in each year. 585 (C) The commission's approval of a decoupling mechanism 586 under this section shall not affect any other rates, riders, 587 charges, schedules, classifications, or services previously 588 approved by the commission. The decoupling mechanism shall 589 remain in effect until the next time that the electric 590 distribution utility applies for and the commission approves 591 base distribution rates for the utility under section 4909.18 of 592 the Revised Code. 593 (D) Divisions (A), (B), and (C) of this section shall not 594 . B. No. l_133_0905-12 Page 22 apply to an electric distribution utility that has base 595 distribution rates that became effective between December 31, 596 2018, and the effective date of this section pursuant to an 597 application for an increase in base distribution rates filed 598 under section 4909.18 of the Revised Code. 599 Sec. 4928.644. (A) The public utilities commission may 600 reduce either baseline described in section 4928.643 of the 601 Revised Code to adjust for new economic growth in the electric 602 distribution utility's certified territory or in the electric 603 services company's service area in this state. 604 (B) For an electric distribution utility and an electric 605 services company, neither baseline shall include the load and 606 usage of a customer who is subject to the monthly charge 607 established under section 3706.47 of the Revised Code unless or 608 until the customer opts to pay the charge associated with 609 compliance with section 4928.64 of the Revised Code. 610 Sec. 4928.647. Subject to approval by the public utilities 611 commission and regardless of any limitations set forth in any 612 other section of Chapter 4928. of the Revised Code, an electric 613 distribution utility may offer a customer the opportunity to 614 purchase renewable energy services on a nondiscriminatory basis, 615 by doing either of the following: 616 (A)(1) An electric distribution utility may seek approval 617 from the commission to establish a schedule or schedules 618 applicable to residential, commercial, industrial, or other 619 customers and provide a customer the opportunity to purchase 620 renewable energy credits for any purpose the customer elects. 621 (2) The commission shall not approve any schedule unless 622 it determines both of the following: 623 . B. No. l_133_0905-12 (a) The proposed schedule or schedules do not create an Page 23 624 undue burden or unreasonable preference or disadvantage to 625 nonparticipating customers. 626 (b) The electric distribution utility seeking approval 627 commits to comply with any conditions the commission may impose 628 to ensure that the electric distribution utility and any 629 participating customers are solely responsible for the risks, 630 costs, and benefits of any schedule or schedules. 631 (B)(1) Consistent with section 4905.31 of the Revised 632 Code, an electric distribution utility, a customer, or a group 633 of customers may seek approval of a nondiscriminatory schedule 634 or reasonable arrangement involving the production and supply of 635 renewable energy, including long-term renewable energy purchase 636 agreements through which an electric distribution utility may 637 construct, lease, finance, or operate renewable energy resources 638 dedicated to that customer or customers. 639 (2) The commission shall not approve any schedule or arrangement unless it determines both of the following: 640 641 (a) The proposed schedule or arrangement does not create 642 an undue burden or unreasonable preference or disadvantage to 643 nonparticipating customers. 644 (b) The electric distribution utility seeking approval 645 commits to comply with any conditions the commission may impose 646 to ensure that the electric distribution utility and any 647 participating customers are solely responsible for the risks, 648 costs, and benefits of any schedule or reasonable arrangement. 649 Sec. 4928.66. (A)(1)(a) Beginning in 2009, an electric 650 distribution utility shall implement energy efficiency programs 651 that achieve energy savings equivalent to at least three-tenths 652 . B. No. l_133_0905-12 Page 24 of one per cent of the total, annual average, and normalized 653 kilowatt-hour sales of the electric distribution utility during 654 the preceding three calendar years to customers in this state. 655 An energy efficiency program may include a combined heat and 656 power system placed into service or retrofitted on or after the 657 effective date of the amendment of this section by S.B. 315 of 658 the 129th general assembly, September 10, 2012, or a waste 659 energy recovery system placed into service or retrofitted on or 660 after September 10, 2012, except that a waste energy recovery 661 system described in division (A)(38)(b) of section 4928.01 of 662 the Revised Code may be included only if it was placed into 663 service between January 1, 2002, and December 31, 2004. For a 664 waste energy recovery or combined heat and power system, the 665 savings shall be as estimated by the public utilities 666 commission. The savings requirement, using such a three-year 667 average, shall increase to an additional five-tenths of one per 668 cent in 2010, seven-tenths of one per cent in 2011, eight-tenths 669 of one per cent in 2012, nine-tenths of one per cent in 2013, 670 and one per cent in 2014. In 2015 and 2016, an electric 671 distribution utility shall achieve energy savings equal to the 672 result of subtracting the cumulative energy savings achieved 673 since 2009 from the product of multiplying the baseline for 674 energy savings, described in division (A)(2)(a) of this section, 675 by four and two-tenths of one per cent. If the result is zero or 676 less for the year for which the calculation is being made, the 677 utility shall not be required to achieve additional energy 678 savings for that year, but may achieve additional energy savings 679 for that year. Thereafter, the The annual savings requirements 680 shall be, for years 2017, 2018, 2019, and 2020, an additional 681 one per cent of the baseline, and two per cent each year 682 thereafter, achieving cumulative energy savings in excess of 683 twenty-two per cent by the end of 2027. For purposes of a waste 684 . B. No. l_133_0905-12 Page 25 energy recovery or combined heat and power system, an electric 685 distribution utility shall not apply more than the total annual 686 percentage of the electric distribution utility's industrial- 687 customer load, relative to the electric distribution utility's 688 total load, to the annual energy savings requirement. 689 (b) Beginning in 2009, an electric distribution utility 690 shall implement peak demand reduction programs designed to 691 achieve a one per cent reduction in peak demand in 2009 and an 692 additional seventy-five hundredths of one per cent reduction 693 each year through 2014. In 2015 and 2016, an electric 694 distribution utility shall achieve a reduction in peak demand 695 equal to the result of subtracting the cumulative peak demand 696 reductions achieved since 2009 from the product of multiplying 697 the baseline for peak demand reduction, described in division 698 (A)(2)(a) of this section, by four and seventy-five hundredths 699 of one per cent. If the result is zero or less for the year for 700 which the calculation is being made, the utility shall not be 701 required to achieve an additional reduction in peak demand for 702 that year, but may achieve an additional reduction in peak 703 demand for that year. In 2017 and each year thereafter through 704 2020, the utility shall achieve an additional seventy-five 705 hundredths of one per cent reduction in peak demand. 706 (2) For the purposes of divisions (A)(1)(a) and (b) of this section: 707 708 (a) The baseline for energy savings under division (A)(1) 709 (a) of this section shall be the average of the total kilowatt 710 hours the electric distribution utility sold in the preceding 711 three calendar years. The baseline for a peak demand reduction 712 under division (A)(1)(b) of this section shall be the average 713 peak demand on the utility in the preceding three calendar 714 . B. No. l_133_0905-12 Page 26 years, except that the commission may reduce either baseline to 715 adjust for new economic growth in the utility's certified 716 territory. Neither baseline shall include the load and usage of 717 any of the following customers: 718 (i) Beginning January 1, 2017, a customer for which a 719 reasonable arrangement has been approved under section 4905.31 720 of the Revised Code; 721 (ii) A customer that has opted out of the utility's portfolio plan under section 4928.6611 of the Revised Code; 722 723 (iii) A customer that has opted out of the utility's 724 portfolio plan under Section 8 of S.B. 310 of the 130th general 725 assembly. 726 (b) The commission may amend the benchmarks set forth in 727 division (A)(1)(a) or (b) of this section if, after application 728 by the electric distribution utility, the commission determines 729 that the amendment is necessary because the utility cannot 730 reasonably achieve the benchmarks due to regulatory, economic, 731 or technological reasons beyond its reasonable control. 732 (c) Compliance with divisions (A)(1)(a) and (b) of this 733 section shall be measured by including the effects of all 734 demand-response programs for mercantile customers of the subject 735 electric distribution utility, all waste energy recovery systems 736 and all combined heat and power systems, and all such mercantile 737 customer-sited energy efficiency, including waste energy 738 recovery and combined heat and power, and peak demand reduction 739 programs, adjusted upward by the appropriate loss factors. Any 740 mechanism designed to recover the cost of energy efficiency, 741 including waste energy recovery and combined heat and power, and 742 peak demand reduction programs under divisions (A)(1)(a) and (b) 743 . B. No. l_133_0905-12 Page 27 of this section may exempt mercantile customers that commit 744 their demand-response or other customer-sited capabilities, 745 whether existing or new, for integration into the electric 746 distribution utility's demand-response, energy efficiency, 747 including waste energy recovery and combined heat and power, or 748 peak demand reduction programs, if the commission determines 749 that that exemption reasonably encourages such customers to 750 commit those capabilities to those programs. If a mercantile 751 customer makes such existing or new demand-response, energy 752 efficiency, including waste energy recovery and combined heat 753 and power, or peak demand reduction capability available to an 754 electric distribution utility pursuant to division (A)(2)(c) of 755 this section, the electric utility's baseline under division (A) 756 (2)(a) of this section shall be adjusted to exclude the effects 757 of all such demand-response, energy efficiency, including waste 758 energy recovery and combined heat and power, or peak demand 759 reduction programs that may have existed during the period used 760 to establish the baseline. The baseline also shall be normalized 761 for changes in numbers of customers, sales, weather, peak 762 demand, and other appropriate factors so that the compliance 763 measurement is not unduly influenced by factors outside the 764 control of the electric distribution utility. 765 (d)(i) Programs implemented by a utility may include the following: 766 767 (I) Demand-response programs; 768 (II) Smart grid investment programs, provided that such 769 programs are demonstrated to be cost-beneficial; (III) Customer-sited programs, including waste energy recovery and combined heat and power systems; 770 771 772 . B. No. l_133_0905-12 (IV) Transmission and distribution infrastructure improvements that reduce line losses; (V) Energy efficiency savings and peak demand reduction Page 28 773 774 775 that are achieved, in whole or in part, as a result of funding 776 provided from the universal service fund established by section 777 4928.51 of the Revised Code to benefit low-income customers 778 through programs that include, but are not limited to, energy 779 audits, the installation of energy efficiency insulation, 780 appliances, and windows, and other weatherization measures. 781 (ii) No energy efficiency or peak demand reduction 782 achieved under divisions (A)(2)(d)(i)(IV) and (V) of this 783 section shall qualify for shared savings. 784 (iii) Division (A)(2)(c) of this section shall be applied 785 to include facilitating efforts by a mercantile customer or 786 group of those customers to offer customer-sited demand- 787 response, energy efficiency, including waste energy recovery and 788 combined heat and power, or peak demand reduction capabilities 789 to the electric distribution utility as part of a reasonable 790 arrangement submitted to the commission pursuant to section 791 4905.31 of the Revised Code. 792 (e) No programs or improvements described in division (A) 793 (2)(d) of this section shall conflict with any statewide 794 building code adopted by the board of building standards. 795 (B) In accordance with rules it shall adopt, the public 796 utilities commission shall produce and docket at the commission 797 an annual report containing the results of its verification of 798 the annual levels of energy efficiency and of peak demand 799 reductions achieved by each electric distribution utility 800 pursuant to division (A) of this section. A copy of the report 801 . B. No. l_133_0905-12 shall be provided to the consumers' counsel. (C) If the commission determines, after notice and Page 29 802 803 opportunity for hearing and based upon its report under division 804 (B) of this section, that an electric distribution utility has 805 failed to comply with an energy efficiency or peak demand 806 reduction requirement of division (A) of this section, the 807 commission shall assess a forfeiture on the utility as provided 808 under sections 4905.55 to 4905.60 and 4905.64 of the Revised 809 Code, either in the amount, per day per undercompliance or 810 noncompliance, relative to the period of the report, equal to 811 that prescribed for noncompliances under section 4905.54 of the 812 Revised Code, or in an amount equal to the then existing market 813 value of one renewable energy credit per megawatt hour of 814 undercompliance or noncompliance. Revenue from any forfeiture 815 assessed under this division shall be deposited to the credit of 816 the advanced energy fund created under section 4928.61 of the 817 Revised Code. 818 (D) The commission may establish rules regarding the 819 content of an application by an electric distribution utility 820 for commission approval of a revenue decoupling mechanism under 821 this division. Such an application shall not be considered an 822 application to increase rates and may be included as part of a 823 proposal to establish, continue, or expand energy efficiency or 824 conservation programs. The commission by order may approve an 825 application under this division if it determines both that the 826 revenue decoupling mechanism provides for the recovery of 827 revenue that otherwise may be forgone by the utility as a result 828 of or in connection with the implementation by the electric 829 distribution utility of any energy efficiency or energy 830 conservation programs and reasonably aligns the interests of the 831 utility and of its customers in favor of those programs. 832 . B. No. l_133_0905-12 (E) The commission additionally shall adopt rules that Page 30 833 require an electric distribution utility to provide a customer 834 upon request with two years' consumption data in an accessible 835 form. 836 (F)(1) All the terms and conditions of an electric 837 distribution utility's portfolio plan in effect as of the 838 effective date of the amendments to this section by H.B. 6 of 839 the 133rd general assembly shall remain in place through 840 December 31, 2020, and terminate on that date. 841 (2) If a portfolio plan is extended beyond its commission- 842 approved term by division (F)(1) of this section, the existing 843 plan's budget shall be increased for the extended term to 844 include an amount equal to the annual average of the approved 845 budget for all years of the portfolio plan in effect as of the 846 effective date of the amendments to this section by H.B. 6 of 847 the 133rd general assembly. 848 (3) All other terms and conditions of a portfolio plan 849 extended beyond its commission-approved term by division (F)(1) 850 of this section shall remain the same unless changes are 851 authorized by the commission upon the electric distribution 852 utility's request. 853 (G) All requirements imposed and all programs implemented 854 under this section shall terminate on December 31, 2020, 855 provided an electric distribution utility recovers in the 856 following year all remaining program costs incurred or to be 857 incurred, including costs incurred for contractual obligations 858 and any costs to discontinue the portfolio plan programs through 859 applicable tariff schedules or riders in effect on the effective 860 date of the amendments to this section by H.B. 6 of the 133rd 861 general assembly. 862 . B. No. l_133_0905-12 Sec. 4928.661. (A) Not earlier than January 1, 2020, an Page 31 863 electric distribution utility may submit an application to the 864 public utilities commission for approval of programs to 865 encourage energy efficiency or peak demand reduction. The 866 application may include descriptions of the proposed programs 867 including all of the following: 868 (1) The size and scope of the programs; 869 (2) Applicability of the programs to specific customer 870 classes; 871 (3) Recovery of costs and incentives; 872 (4) Any other information determined by the electric 873 distribution utility to be appropriate for the commission's 874 review. 875 (B) The commission shall issue an order approving or 876 modifying and approving an application if it finds that the 877 proposed programs will be cost-effective, in the public 878 interest, and consistent with state policy as specified in 879 section 4928.02 of the Revised Code. 880 (C) Applications submitted and approved under this section shall not take effect earlier than January 1, 2021. Sec. 4928.6610. As used in sections 4928.6611 to 4928.6616 4928.6615 of the Revised Code: 881 882 883 884 (A) "Customer" means any either of the following: 885 (1) Effective January 1, 2020, a mercantile customer as 886 defined in section 4928.01 of the Revised Code; (2) Any customer of an electric distribution utility to which either of the following applies: 887 888 889 . B. No. l_133_0905-12 (1) (a) The customer receives service above the primary Page 32 890 voltage level as determined by the utility's tariff 891 classification. 892 (2) (b) The customer is a commercial or industrial customer to which both of the following apply: (a) (i) The customer receives electricity through a meter 893 894 895 of an end user or through more than one meter at a single 896 location in a quantity that exceeds forty-five million kilowatt 897 hours of electricity for the preceding calendar year. 898 (b) (ii) The customer has made a written request for 899 registration as a self-assessing purchaser pursuant to section 900 5727.81 of the Revised Code. 901 (B) "Energy intensity" means the amount of energy, from electricity, used or consumed per unit of production. 902 903 (C) "Portfolio plan" means either of the following: 904 (1) The comprehensive energy efficiency and peak-demand 905 reduction program portfolio plan required under rules adopted by 906 the public utilities commission and codified in Chapter 4901:1- 907 39 of the Administrative Code or hereafter recodified or 908 amended; 909 (2) A plan approved under section 4928.661 of the Revised Code or under rules adopted under that section. Section 2. That existing sections 3706.02, 3706.03, 910 911 912 4928.644, 4928.66, and 4928.6610 of the Revised Code are hereby 913 repealed. 914 Section 3. That section 4928.6616 of the Revised Code is hereby repealed. 915 916 . B. No. l_133_0905-12 Page 33 Section 4. (A) Not earlier than two years after the 917 effective date of this section, the Director of Environmental 918 Protection may apply to the Administrator of the United States 919 Environmental Protection Agency for an exemption from the 920 requirement to implement the decentralized motor vehicle 921 inspection and maintenance program established under section 922 3704.14 of the Revised Code. In making the application and for 923 purposes of complying with the "Federal Clean Air Act," the 924 Director shall request the Administrator to authorize the 925 implementation of the Ohio Clean Air Program established by this 926 act as an alternative to the decentralized program in those 927 areas of the state where the program is currently operating. 928 (B) As used in this section, "Federal Clean Air Act" has the same meaning as in section 3704.01 of the Revised Code. Section 5. If any provisions of a section as amended or 929 930 931 enacted by this act, or the application thereof to any person or 932 circumstance is held invalid, the invalidity does not affect 933 other provisions or applications of the section or related 934 sections that can be given effect without the invalid provision 935 or application, and to this end the provisions are severable. 936