Clean Power Plan a Year Later: Where Does Ohio Go from Here?

This week marks the one-year anniversary of the announcement of President Obama’s historic Clean Power Plan, our nation's first-ever limits on carbon pollution from the electric power sector—the single biggest source of climate change-fueling CO2 in America. While there are limits on dangerous emissions like sulfur and mercury from power plants, there had previously been no such limits on carbon.

The Clean Power Plan changed that. It also built momentum for the U.S. to join 189 other countries last December in adopting the Paris climate accord, the most ambitious worldwide climate change pact in history.

One year on, that momentum continues to build.

Indeed, the electric sector has embarked on an unstoppable shift from its high-pollution, fossil-fueled past to a safer, cleaner-powered future. Nationally, more renewables were brought online last year than any traditional resource. One of the reasons for this is wind and solar energy is becoming even cheaper to produce, and people are demanding it. Conversely, the coal industry has continued its decades-long decline, falling headlong off the cliff with the bankruptcy announcement of industry titan Peabody Coal.

Ohio is Ground Zero for the Clean Energy Shift

Nowhere is this shift—and industry attempts to thwart progress—more on display than in Ohio.

Today Ohio’s coal and nuclear plants are finding themselves unable to compete with cheaper-by-the day natural gas, wind, solar, and efficiency, ushering in a new era where cleaner burning fuels are dominating competitive electric markets. This dynamic prompted FirstEnergy’s decision just last week to shutter 720 megawatts of its Ohio-based coal generation. In the midst of all of this, Ohio is rounding its final six months on a two-year freeze on energy efficiency and renewable energy standards that—when they were allowed to flourish—reaped billions of dollars of savings for Ohioans and launched a clean energy industry that continues to hold on despite policy roadblocks.

Indeed, just as it is a bellwether for politics, Ohio has emerged as ground zero for a whole host of existential questions facing the electric industry:

….wholesale energy markets vs. regulated utility-owned generation;

….supporting clean energy policies vs. rolling them back;

….embracing the clean energy jobs of today vs. clinging to industries that are increasingly on the decline.

With all the debate in Ohio right now on what energy future the state should embrace, and how, the Clean Power Plan is one overarching policy that can help the state come out ahead.

It’s a game-changer for Ohio—a state that uses nearly 70% coal-fired electricity. It's an incredible opportunity to step out from the past, modernize the electric grid and ensure we have an ongoing supply of clean, affordable, and reliable power needed to grow our economy and protect our health and the health of our children.

Clean Power Plan: Smart for Ohio, and on Firm Legal Footing

You may be asking yourself at this point: Wait, didn’t Ohio join the lawsuit challenging the rule? And wasn’t the Clean Power Plan stayed by the Supreme Court last February?

Yes, both of these things are true, but neither diminish the critical nature of the Clean Power Plan for Ohio, nor the legal fortitude of the rule.

First, Ohio is well-positioned to affordably and reliably cut carbon emissions under the Clean Power Plan through the state-level clean energy standards already at its disposal (though they're presently frozen). And the state has the potential to develop its economy in the process.

And while Ohio is participating in a multi-state lawsuit against the rules, state agencies tasked with implementing the rule have also been heading down a second, more constructive path to develop a state plan that capitalizes on Ohio's potential for significant clean energy investment. Ohio EPA has made clear that energy efficiency and renewable energy “may be key to a low-cost strategy” to reduce carbon emissions and ultimately meet the Clean Power Plan.

Second, the rule is on firm legal footing. The Clean Power Plan sets achievable limits on carbon pollution based on proven, cost-effective approaches that the power sector has been using for years to reduce emissions of harmful air pollution—and it provides Ohio and its utilities with extraordinary flexibility in deciding how to meet these targets.

The Supreme Court’s decision in February to grant an industry request to stay the rules was not a ruling on the merits of the case. Rather, it’s a temporary pause until the litigation process concludes.

In the meantime, hosts of major businesses, members of Congress, public health organizations, faith leaders, power companies, attorneys general, environmental organizations, and mayors all filed court briefs in support of these lifesaving standards, reflecting the broad support among Americans for the Clean Power Plan. This builds on the hundreds of business and investment leaders who signed onto a letter last year urging movement on the Plan.

And U.S. EPA is heeding the call of over a dozen states that want to move forward on cutting carbon and get clarity on certain key provisions during the stay period. Last month, U.S. EPA further refined its “Clean Energy Incentive Program,” a companion to the Clean Power Plan that offers opportunities for low-income communities to participate in cutting carbon emissions through energy efficiency and rooftop solar.

Ohio Must Move Forward, Or Be Left Behind

This broad support is a critical point, one that Ohio should pay close attention to. The state would be smart to take cues from its neighbors and industry leaders, and start to craft its own common-sense carbon reduction plan.

Rather than sitting back and waiting, 20 states across the country—states both challenging the Clean Power Plan as well as states strongly supportive—have weighed in constructively following last February’s stay. This includes Pennsylvania, which is similar to Ohio in its large manufacturing base, historic fleet of coal-fired power, and strong labor presence.

Power companies across Ohio and the Midwest are following suit; AEP (one of Ohio's, and the nation's, large electric utilities), Exelon, Indiana Michigan Power, and DTE Energy are pursuing pollution reductions because it makes sense for their business and their customers, and it’s the right thing to do for the public health and environment. This utility industry shift toward cleaner generation will continue even post-stay. The trade association Edison Electric Institute put it best: “We're still reducing CO2 . . . You don't simply put the genie back in the bottle when it comes to major strategic investments that the captains of industry are making.”

The Road Ahead

So what does this all add up to? It amounts to a pretty sharp message to Ohio to seize the opportunity that the Clean Power Plan presents, leverage its strengths in manufacturing and position itself as a player in this new economy.

A good start would be for Ohio's agencies to get back to work on developing a carbon emissions plan that works for the state's own unique circumstances and energy mix. To up the chances of meeting the Clean Power Plan cost-effectively, Ohio should also focus on removing the roadblocks to progress that have been thrown up over the last few years. This includes fixing the anti-business wind energy setback requirements enacted two years ago, and reinstating the state's wildly successful clean energy standards. Each of these steps would clear the way to reduce carbon emissions and finally set Ohio on the path toward addressing climate change at home.

Thankfully, the Clean Power Plan presents a golden opportunity to set things right.