Senate Energy Committee adopts substitute as working document for SB2; bill would change rate-making, taxes and siting

The Senate Energy Committee on the third hearing adopted a substitute for Senate Bill 2 as the committee's working document and heard opposition and interested-party testimony about sweeping changes to utility rate-making, tax treatment of new generation and project siting rules. Senator Reineke moved to adopt the substitute; the motion was accepted without objection and the substitute will be posted as the working document.

The substitute would remove certain consumer price-billing provisions, authorize nontraditional billing models and flexible payment schedules, and shorten review timelines at the Ohio Power Siting Board for projects where a utility owns the right-of-way. It reduces the tangible personal property (TPP) tax to 25% on new transmission, distribution and pipeline infrastructure and requires electric distribution utilities to file for a base rate case with the Public Utilities Commission of Ohio (PUCO) every five years. The bill also creates a mechanism to reimburse solar generation fund dollars and sets aside $16,000,000 for solar companies, with any remaining funds to be returned to ratepayers by 2030 if unused.

Utility witnesses broadly supported some modernization measures but warned the bill's removal of electric security plans (ESPs) and repeal of the legacy generation resource (LGR) rider would undermine existing tools utilities use to fund and audit investments. Mark Ryder, president and COO of AEP Ohio, said ESP-era riders require preapproval and annual prudence audits and provide a mechanism for timely grid investments; he added, "We will share our every dollar of our investment plan." Ryder warned that eliminating these tools without a reliable replacement could limit utilities' ability to finance reliability work and long-term projects. AES Ohio and Duke Energy Ohio also opposed retroactive refund authority in the bill, arguing it would create legal and financial uncertainty.

Supporters of the tax changes, including Ohio electric cooperatives, said the TPP cut could incentivize new generation in the state but urged clarifications to avoid cost shifts onto co-op members from expanded behind-the-meter or self-generation definitions. Craig Grooms of Buckeye Power told the committee he was concerned large customers could net off-system generation in a way that transfers transmission and other system costs to other consumers.

Environmental and community advocates urged caution. Kathy Becker of Save Ohio Parks said the bill would repeal both the LGR and the solar generation fund and asked the legislature to refund previously collected funds or ensure the solar dollars are spent to build in-state solar. She also criticized shorter siting timelines and what she described as insufficient public input and environmental review.

The committee concluded the hearing with the substitute as the working document and posted written testimony for members to review. With no formal roll-call votes at the hearing, committee direction on amendments and final floor timing remains pending.