Gov. Kasich abandons $2.5 billion in wind energy projects by signing Ohio budget with punitive setback rule and no due process

Gov. John Kasich and the Legislature today abandoned $2.5 billion in current wind energy projects, which now face cancellation along with jobs, leases, payments to local governments, and orders for factories, over a needlessly restrictive setback requirement that Kasich signed into law today.

Kasich this afternoon signed the state’s budget, House Bill 483, without vetoing a last-minute insertion that requires wind turbines to be at least 1,300 feet from the nearest property line instead of the nearest house. Just last Friday, Ohio became the first state to slow down its clean energy progress with Kasich’s signing of Senate Bill 310, which freezes the state’s renewable electricity standard for two years.

“Gov. Kasich has walked away from his commitment to renewable energy. He and the Legislature are creating an unfriendly business environment in Ohio,” said Tom Kiernan, CEO of the American Wind Energy Association. “Legislators rammed through restrictive rules without due process, and millions of dollars already invested based on the previous set of rules may now be lost without any public debate. This will force clean energy developers and manufacturers to move to neighboring states with similar resources and friendlier business climates.”

The American wind industry has generated major economic benefits for Ohio, which ranks first in the nation for the number of wind energy manufacturing facilities with more than 60 in the state. Yet there was no opportunity for the regulators at the Ohio Power Siting Board, nor a single wind company operating or developing in Ohio, to comment or provide testimony on this matter during its short one-week consideration in the General Assembly.

Ohio had already required that wind turbines be located at least 1,300 feet from the nearest inhabited residence, among the most restrictive policies in America. The change to the nearest property line was added to the state budget bill only after all public debate had already ended. Developers say it will make it impossible to proceed with $2.5 billion worth of projects currently under development, and billions of dollars more that were in the planning stages until today. If fully developed, the current projects could have provided approximately $220 million in local tax payments and $180 million worth of leases to landowners over the projects' lifetimes. With stable policies, those numbers could have steadily grown in the coming years.

This new requirement “appears designed to make the construction of utility-scale wind farms commercially unviable,” as Gabriel Alonso, CEO of EDP Renewables North America, wrote in a June 4 letter to Gov. Kasich. He said his company’s Timber Road project represents a $200 million investment in Paulding County and has “tremendous local support,” and that EDP planned another $800 million of investment in Ohio, “all of which would be devastated by this provision.”

According to Mark Goodwin, President of Apex Clean Energy, “This is an Ohio job killer, pure and simple.” In a letter to Gov. Kasich last Thursday, June 12, he wrote that his company has more wind energy development projects in the state than any other company, and “in our portfolio alone, we estimate that this bill will kill over $3 billion of investment in the state,” hundreds of high-quality, local Ohio jobs, and $525 million in landowner lease payments and local tax payments. With the setback requirement, he wrote, Apex “will have no choice but to take its investment and its business elsewhere. Given the need to find new carbon-free sources of electricity in Ohio, we cannot imagine a worse time to send wind energy companies packing.” 

Kiernan added, “If the Governor and the Legislature had intended the ‘pause and study’ intentions of SB 310 to be taken seriously, they would have never allowed this punitive setback provision into the budget to threaten all wind energy development in Ohio. His failure to use his line item veto today restricts future renewable electricity standard compliance options for utilities, and options for complying with the new EPA carbon pollution standards, with no public discussion of the issue.

“This isn’t right, and it isn’t fair to Ohio taxpayers and companies that now stand to lose millions of dollars they have already invested into trying to do business in Ohio.”