On Tuesday, February 11, 2025, Senate President Pro Tempore Bill Reineke (R-Tiffin) unveiled the Senate’s energy legislation, S.B. 2. As expected, there are similarities to H.B. 15, introduced by Rep. Roy Klopfenstein (R-Haviland). However, S.B. 2 goes much further by addressing additional topics like behind-the-meter generation and customer refunds.
Similar to H.B. 15, S.B. 2 repeals the H.B. 6 (2019) subsidies for OVEC and select utility-scale solar projects, forbids electric distribution utilities from owning generation or bidding into the wholesale market, requires the EDU’s standard service officer (SSO) only as a market-rate offer (MRO), repeals the electric security plan (ESP) statute, and creates a consumer choice billing program with consolidated billing.
Below is a summary of S.B. 2 focused primarily on the differences from H.B. 15. Here is our previous summary of H.B. 15.
For developers, S.B. 2 contains several provisions of interest that stand out from H.B. 15.
Like H.B. 15, S.B. 2 transfers the Tangible Personal Property Tax (TPP) from generation facilities to transmission and distribution systems, however, S.B. 2 only applies the change to generation facilities placed into service after the bill takes effect.
S.B. 2 authorizes counties, municipalities, or townships to petition the Director of Development to designate a brownfield or former coal mine site as a “priority investment area” (PIA). In a PIA, TPP dedicated to transporting or transmitting electricity or natural gas is exempt from TPP taxation for five years. PIA designation also creates an accelerated review of electric generation or transmission projects and gas pipeline projects by the Ohio Power Siting Board (OPSB) (more on the expedited process below).
S.B. 2 expands Ohio law’s traditional support of self-generation with provisions regarding self-generation and self-power systems. First, the definition of “self-generator” is modified to include an entity that owns or hosts an electric generation facility on property the entity controls. Current law limits the definition to an entity that owns or hosts generation on its premises. The proposed change expands the geographic reach for behind-the-meter generation exponentially.
S.B. 2 also creates “mercantile self-power systems that can provide generation service to one or more mercantile customers. The system must meet the following requirements:
- Produce electricity primarily for consumption of a mercantile customer or a group of mercantile customers.
- Connects directly to the mercantile customer’s side of the electric meter.
- Delivers electricity to the mercantile customer’s side of the electric meter without utilizing an EDU distribution or transmission system.
- Located on property owned or controlled by a mercantile customer or the entity that owns or operates the self-power system.
As it relates to utility ratemaking and the Public Utilities Commission of Ohio (PUCO), S.B. 2 proposes multiple changes that modify current practices at the PUCO.
Most notably, S.B. 2 allows for refunds to customers for any charges paid to a public utility that is later found to be unreasonable, unlawful, imprudent, or otherwise improper by either the PUCO or the Ohio Supreme Court. In Keco Industries v. Cincinnati Suburban Bell Tel. Co. (1957), 166 Ohio St. 254, 2 O.O.2d 85, 141 N.E.2d 465, the Ohio Supreme Court held that where the PUCO issued an order, a court’s later reversal of that order did not support a customer refund under current Ohio law and could only apply to future charges. Critics have long contended that the lengthy timeline for appeals of PUCO orders results in consumers paying charges that are eventually found unlawful for almost an entire billing cycle and present very little relief for consumers.
Like H.B. 15, S.B. 2 eliminates the electric security plan statute. S.B. 2 goes further by requiring each EDU to file a rate case by December 31, 2029. In addition, S.B. 2 permits EDUs to file “mini rate cases” limited solely to collecting capital expenditures of the EDU for economic development purposes not included in an approved application for a full rate case.
Last, S.B. 2 introduces strict timelines for issuing decisions. Some are referring to these provisions as a “shot clock.”
For the OPSB, a decision on an application for a certificate of environmental compatibility and public need is due no later than 120 days after the application filing. Failure by the OPSB to render a decision within the time period results in the application being deemed approved by operation of law, and a certificate must be issued. The OPSB also must hold a public hearing on a certificate application not less than 45 or more than 60 days after receiving the application (current law requires a hearing between 60 and 90 days after receiving the application).
As mentioned above, projects located in PIAs receive expedited processes at the OPSB. Applications for a certificate from a PIA are due no later than 45 days after receiving an application.
For rate applications, the PUCO must issue a decision on a rate case application after 275 days. If the PUCO fails to issue a decision, the rate case application is deemed approved by operation of law. Under current law, EDUs may place rates into effect 275 days after filing a bond with the PUCO that is payable to the state and used for issuing refunds after the PUCO’s final order. If the PUCO fails to act within 545 days, the EDU has no obligation to issue refunds for amounts collected after the 545th day.
In a rate case, S.B. 2 also prohibits the PUCO from allowing new discovery after 215 days after the application is filed.
Both the House and Senate legislative committees have already begun the important work of hearing testimony and deliberating on potential amendments. Expect S.B. 2 and H.B. 15 to undergo additional changes before the legislature agrees on a final version to send to Governor DeWine for his signature.
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