Constitutional Offices Section
Office 614-466-2872
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August 12, 2019
Via E-mail
Mr. Brandon Lynaugh
lynaugh@battlegroundstrategy.com
Re:

Submitted Petition for Referendum on Am. Sub. H.B. 6

Dear Mr. Lynaugh,
On July 29, 2019, in accordance with the provisions of the Ohio Revised Code (“ORC”) Section
3519.01(B), I received a written petition containing (1) a copy of a referendum to repeal Am.
Sub. H.B. 6 of the 133rd General Assembly, and (2) a summary of the same measure.
It is my statutory duty to determine whether the submitted summary is a “fair and truthful
statement of the measure to be referred.” ORC Section 3519.01(B)(3). If I conclude that the
summary is fair and truthful, I am to certify it as such within ten business days of receipt of the
petition. In this instance, the tenth business day falls on Monday, August 12, 2019.
The Ohio Supreme Court has defined “summary” relative to an initiated petition as “a short,
concise summing up,” which properly advises potential signers of a proposed measure’s
character “without the necessity of perusing [it] at length.” State ex rel. Hubbell v. Bettman, 124
Ohio St. 24 (1931). After reviewing the submission, I have concluded that I am unable to certify
its summary as a fair and truthful summing up of the measure to be referred.
I have identified numerous instances where the Summary is either inaccurate or contains material
omissions of the statutory language. For ease of reference, I have numbered the bullet points of
the Summary, which was submitted to my office unnumbered.
•

The first bullet point of the Summary inaccurately states that newly enacted R.C.
3706.40 defines “electric distribution utility” as being “an electric utility that provides
at least residential service.” (Emphasis added.) This is inaccurate. R.C. 3706.40
incorporates the definition of “electric distribution utility” that already exists in R.C.
4928.01(A)(6). R.C. 4928.01(A)(6) defines “electric distribution utility” as “an
electric utility that supplies at least retail electric distribution service[,]” which is not
the same as saying “at least residential service” as set forth in the Summary.

•

The second bullet point of the Summary addresses R.C. 3706.41, which sets forth the
required content of an application for renewable energy credits. Among other things,
a qualified renewable or nuclear resource must include “the cost of operational and
market risks that would be avoided by ceasing operation of the resource [.]” The term
“operational risks” is a defined term. The Summary states that “operational

 Mr. Brandon Lynaugh
Re: Submitted Petition for Referendum on Am. Sub. H.B. 6

August 12, 2019
p 2

risks…include the risk that operational costs could be higher because of future
regulatory burdens and requirements[.]” But this language is not complete in that
operational risk includes the risk that operating costs will be higher than anticipated
because of “equipment failures and the risk that per-megawatt- hour costs will be
higher than anticipated because of a lower than expected capacity factor.” The
omitted language establishes other considerations as to why an application for credits
could be approved and is therefore material.
•

The third bullet point of the Summary states, in part, “(iii) that an application for
renewable credits shall be approved if the resource meets the renewable resource
definition[.]” This excludes language in R.C. 3706.43(A), which provides: “The
resource meets the definition of a qualifying nuclear resource or qualifying
renewable resource[.]” (Emphasis added.) The Act provides only two resources that
can qualify for credits, and failing to identify in the Summary one that could be
approved is material.

•

The third bullet point of the Summary also states “that an application for nuclear
credits shall be approved…if the owner or operator of the qualifying resource
maintains a principal place of business in Ohio and a substantial business presence in
Ohio.” (Emphasis added.) This is inaccurate. R.C. 3706.43(B)(2) actually provides
that an application shall be approved if “[t]he resource’s operator maintains both a
principal place of business in this state and a substantial presence in this state…”
(Emphasis added.) An owner’s principal place of business/business presence in Ohio
is not considered in the approval process.

•

The fifth bullet point of the Summary states that “ORC § 3706.45 requires qualifying
nuclear and renewable resources to report their megawatt hours generated on a
quarterly basis to the Authority, for which it shall issue one credit for each megawatt
hour reported[.]” In contrast, R.C. 3706.45(B) of the Bill actually provides that “The
authority shall issue one renewable energy credit to a qualifying renewable resource
for each megawatt hour of electricity that is both reported under division (A) of this
section and approved by the authority.” Omitting language regarding approval of
credits by the Authority is misleading.

•

The seventh bullet point of the Summary provides that the measure “creates the
nuclear generation fund and the renewable generation fund, into which the revenue
from the monthly customer charges shall be deposited and shall gain interest in the
custody of the state treasurer[.]” But the Summary does not mention the provision in
R.C. 3706.49(A) which provides “Each fund shall be in the custody of the treasurer of
state but shall not be part of the state treasury.” (Emphasis added.) Likewise, the
Summary does not disclose that “The interest generated by each fund shall be
retained by each respective fund and used for the purposes set forth in [the cited
statutory provisions][,]” as set out in R.C. 3706.49(A). The omission of language
establishing that each fund, and its interest, does not become part of the state treasury
is material.
30 E. Broad Street, 16th Floor, Columbus, Ohio 43215
www.OhioAttorneyGeneral.gov

 Mr. Brandon Lynaugh
Re: Submitted Petition for Referendum on Am. Sub. H.B. 6

August 12, 2019
p 3

•

The eighth bullet point of the Summary incorrectly describes the Commission’s
responsibility for paying qualifying resources for credits. It states that “ORC §
3706.53 apportions the revenue collected through the utility charges…subject to
reduction or suspension by the Commission[.]” R.C. 3706.53 cites R.C. 3706.61 as
providing the manner in which the revenue is apportioned, reduced and suspended.
But the relevant sub-section, R.C. 3706.61(D), does not give the Commission any
authority to apportion, reduce, or cease payment of anything. Instead, R.C.
3706.61(D) provides that the Authority, in consultation with the Commission, may
cease or reduce payments of nuclear resource credits. Simply put, contrary to what
the eighth bullet point represents, credits are not subject to reduction or suspension by
the Commission.

•

The ninth bullet point of the Summary incorrectly states the calculation for
distributing money from the funds. The Summary states that the Ohio air quality
development authority is “(i) to distribute money from the generation funds between
April 2021 and January 2028 to qualifying resources in amounts equal to the credits
earned in the same quarter of the prior year, provided there is sufficient money in the
relevant funds[.]” But the Act states that in order to distribute money from the funds
the Authority must take “the number of credits earned by the resources during the
quarter…multiplied by the credit price[.]” R.C. 3706.55(A)(1). Failing to include the
correct calculation for distributing money under the Act is material.

•

The ninth bullet point of the Summary also incorrectly states the procedure for
refunding money to customers from the funds. It states: “ORC § 3706.55 requires
the Authority to…(ii) refund to customers any amount remaining in the funds as of
December 31, 2027, after distributions have been made through January 21, 2028.”
But the Act does not provide that remaining funds are automatically refunded to
customers. Instead, R.C. 3706.55(B) provides that “any amounts remaining in the
nuclear generation fund and the renewable generation fund…shall be refunded to
customers in a manner that shall be determined by the authority in consultation with
the public utilities commission.” Omitting this language from the Summary is
material.

•

Sub-point three of the eleventh bullet of the Summary incorrectly states that the
Authority is responsible for determining the amount of payments that will be made
into the nuclear generation fund, as set forth in R.C. 3706.61(E)(1). It states “[the
measure] permits the Authority to reduce or cease revenue requirements, collection of
charges from customers, and credit prices accordingly[.]” (Emphasis added.) This is
incorrect. The Act provides that “the commission shall do all of the following…[i]f
the authority determines it necessary to make reductions under division (D) of this
section[.]” (Emphasis added.) R.C. 3706.61(E)(1). Simply put, the Summary
incorrectly states that the Authority reduces or adjusts the amount being put into the
funds, when the Act gives the Commission that power.

30 E. Broad Street, 16th Floor, Columbus, Ohio 43215
www.OhioAttorneyGeneral.gov

 Mr. Brandon Lynaugh
Re: Submitted Petition for Referendum on Am. Sub. H.B. 6

August 12, 2019
p 4

•

The eleventh bullet point also incorrectly states that the Authority may cease or
reduce payments to the nuclear generation fund if, among other reasons, a resource
“decommissions.” But the Act provides that the Authority may cease or reduce
payments to the nuclear generation fund if, among other reasons, “the resource’s
owner or operator applies, before May 1, 2027, to decommission the resource.” R.C.
3706.61(D)(3). The distinction between applying to decommission a nuclear resource
(which could take years) and actually decommissioning a nuclear resource is a big
one, and the mischaracterization of the language in the Act is material.

•

Sub-point three of the eleventh bullet point of the Summary also incorrectly states
when the Authority may act to reduce or cease payments for nuclear resource credits.
It states that the Authority may act if “market price index exceeds the strike price.”
But this statement does not reflect the temporal limitation that is actually set out in
the Act. R.C. 3706.61(D)(4) allows the Authority to reduce or cease payments for
resource credits when “the market price index exceeds the strike price on the first day
of June in the year in which the report is submitted[.]” (Emphasis added.) Thus,
reduction or cessation of payments is not authorized whenever the market price
exceeds the strike price, such authority is tied to a specific date for that determination.

•

The fourteenth bullet point explains that the term “net metering system” is amended
in the Act to apply to “a facility located on a customer’s premises…” This
mischaracterizes the amendment. In the Act, R.C. 4928.01(A)(31)(d) amends the
“net metering system” definition only with respect to “an industrial customergenerator with a net metering system” and sets forth capacity requirements for such
industrial customer-generators.

•

Sub-point two of the fourteenth bullet point attempts to summarize the definition of
“prudently incurred costs related to a legacy generation resource” as amended in R.C.
4928.01(A)(42). These are costs that the Commission may allow electric distribution
utilities to recover through an existing bypassable charge from customers. The
definition in the Summary fails to mention that the formula for calculating such costs
provides “that where the net revenues exceed net costs, those excess revenues shall be
credited to customers.” R.C. 4928.01(A)(42). It thus fails to disclose a credit that
customers might receive.

•

The fifteenth bullet point of the Summary discusses R.C. 4928.148, but entirely omits
newly enacted R.C. 4928.148(B), which requires “[a]n electric distribution
utility…shall bid all output from a legacy generation resource into the wholesale
market and shall not use the output in supplying its standard service offer provided
under section 4928.142 or 4928.143 of the Revised Code.”

•

The seventeenth bullet point of the Summary discusses R.C. 4928.471, but omits that
“an electric distribution utility may file an application to implement a decoupling
mechanism for the 2019 calendar year and each calendar year thereafter.”
Decoupling is a process through which the PUCO approves a utility rate set in a
manner so that profits are less seasonal for the utility company. The significance of
30 E. Broad Street, 16th Floor, Columbus, Ohio 43215
www.OhioAttorneyGeneral.gov

 Mr. Brandon Lynaugh
Re: Submitted Petition for Referendum on Am. Sub. H.B. 6

August 12, 2019
p 5

this omission is that consumer groups, such as the Ohio Consumers’ Counsel, object
to decoupling as not benefitting all consumers. Environmental groups also object to
decoupling.
•

The twenty-first bullet point of the Summary incorrectly states that “self-assessing
purchasers” is “a defined term.” The Act does not actually define “self-assessing
purchaser” anywhere.

•

The twenty-fifth bullet point of the Summary incorrectly states that the Act “amends”
R.C. 4928.75. But the Act “enacts” this entirely new section of law.

•

The twenty-eighth bullet point misstates the threshold size of energy projects that are
eligible for property tax exemption. Specifically, the Summary states that the Act
“amends ORC § 5727.75: to permit energy projects of up to 20 megawatts, instead of
5 megawatts, to be exempted from property taxation without the formal approval of a
county commissioners board[.]” R.C. 5727.75(B)(1)(c) actually provides: “For a
qualified energy project with a nameplate capacity of twenty megawatts or greater, a
board of county commissioners of a county in which property of the project is located
has adopted a resolution under division (E)(1)(b) or (c) of this section to approve the
application submitted under division (E) of this section to exempt the property located
in that county from taxation.”

•

The twenty-eighth bullet point also incorrectly states that the Act “amends ORC §
5727.75…to permit energy projects of up to 20 megawatts, instead of 2 megawatts, to
be exempt from the prerequisite of career training[.]” In fact, this exemption applies
to “energy projects with a nameplate capacity of twenty megawatts or greater[.]”
R.C. 5727.75(F)(4).

•

This twenty-eighth bullet point also misstates the requirement for an energy project to
provide training and equipment to first responders as set out in the Act. The
Summary states that the Act “amends ORC § 5727.75: to permit energy projects….to
be exempt from other prerequisites for tax exemptions, including repair of affected
public infrastructure and training and equipping emergency responders.” (Emphasis
added.) In fact, R.C. 5727.75(F)(5) provides that the owner or a lessee of a qualified
energy project shall “Provide or facilitate training for fire and emergency responders
for response to emergency situations related to the energy project[.]” The Act does
reference an exemption from taxation for training fire and emergency responders, as
stated in the Summary.

30 E. Broad Street, 16th Floor, Columbus, Ohio 43215
www.OhioAttorneyGeneral.gov

 Mr. Brandon Lynaugh
Re: Submitted Petition for Referendum on Am. Sub. H.B. 6

August 12, 2019
p 6

For these reasons, I am unable to certify the Summary as a fair and truthful statement of the
measure to be referred. However, I must caution that this is not intended to be an exhaustive list
of all defects in the submitted summary.
Very respectfully yours,

Dave Yost
Ohio Attorney General
Cc: Mr. David Langdon, Counsel for Petitioners (by email)

30 E. Broad Street, 16th Floor, Columbus, Ohio 43215
www.OhioAttorneyGeneral.gov