How a Koch-linked group stalled a bipartisan Ohio energy efficiency bill at the last minute

A bipartisan energy efficiency bill was indefinitely delayed last fall amid a clash between a major conservative lobbying group and one of the state’s most prominent Republican lawmakers, according to previously unreported emails obtained by the Energy News Network. 

Just before an expected vote to let Ohio utilities offer voluntary energy saving programs to customers, the Ohio chapter of Americans for Prosperity issued a “key vote alert” on Oct. 9, encouraging state House leadership to pull the bill and urging members to vote “no” if it came to the floor.

“[T]he last thing Ohioans need is another mandatory program being foisted upon them,” said the alert. But the programs allowed by the bill would be voluntary, and in addition to that mischaracterization, the group claimed they could cost consumers five times more than what the bill would let utilities charge. 

House Majority Floor Leader Bill Seitz, a Cincinnati Republican and major critic of the state’s former energy efficiency standard, is a co-sponsor of the bipartisan bill, House Bill 79. He pounced on the obvious math error in his reply.

“For this egregious error alone, their entire screed should be disregarded,” Seitz wrote in a response shared with House Republican caucus members. “They have not even passed the third grade guarantee!”

The exchange, which Seitz recently shared with the Energy News Network, offers a glimpse at the continued, prominent role of conservative lobbying groups in shaping Ohio energy policy.

Rulings by the Public Utilities Commission of Ohio have blocked utilities from offering programs to help customers save energy after the state’s previous energy efficiency targets were gutted by the scandal-tainted House Bill 6 in 2019. 

HB 79 would let regulated utilities voluntarily reintroduce such programs, subject to lower targets, cost caps and requirements for the programs to save money. The bill would also require utilities offering energy efficiency programs to provide ratepayers with opportunities to opt out.

The bipartisan bill was reported out from the House Public Utilities Committee last June, clearing the way for a full vote in the House. The legislation’s future is unclear, but supporters, including its Democratic co-sponsor, Rep. Bride Rose Sweeney of Westlake, hope it can find traction again this year. 

House Speaker Jason Stephens did not respond to the Energy News Network’s questions about when he plans to bring the bill to the floor for a full House vote.

Americans for Prosperity is a political advocacy group founded by David and Charles Koch. The Center for Media and Democracy, a progressive watchdog group, classifies it as an “astroturf,” or pseudo grassroots organization, which represents the interests of Koch Industries.

“AFP would have you do nothing to combat soaring prices” for energy, Seitz wrote to his fellow Republican caucus members. “That’s not ‘Americans for Prosperity.’ That’s ‘Americans for Power Brownouts.’”

Seitz serves on the board of directors for the American Legislative Exchange Council, another conservative group with ties to the Koch family. Seitz fought for years against Ohio’s former clean energy standard and played a key role in shaping relevant parts of HB 6 that gutted it.

Last-minute timing

Seitz noted that AFP Ohio did not testify at any committee hearings, provide written comments or otherwise contact him as a primary co-sponsor before urging a general “no” vote. He also objected to claims that the bill mirrors language from the federal Inflation Reduction Act, noting that programs under that law are not eligible under HB 79.

Donovan O’Neil, state director for AFP Ohio, defended the group’s timing in emailed comments to the Energy News Network. 

“We reserved our comments and engagement on HB 79 for a time and place we felt it would have the greatest impact on accomplishing our end goal — which is killing this costly harmful legislation threatening Ohio ratepayers,” O’Neil said, adding that the group’s primary focus before last June was on tax and education issues.

Asked for his response to Seitz’s substantive criticisms, O’Neil stuck by his characterization of HB 79 as an example of legislation to “empower cronyists through big government mandates over free market principles.”

“I think that their arguments were misleading,” Sweeney said. Significantly, the bill requires utilities to show that programs will save more money than the costs of the electricity waste they’ll avoid. So, customers as a whole will not have their bills go up. “That’s what’s lost oftentimes” in debates about energy efficiency, she said.

The clash between two conservative parties — Seitz and AFP Ohio — is fascinating, said Dave Anderson, policy and communications manager for the Energy and Policy Institute.

“It just seems like renewable energy and energy efficiency are always at the losing end of these legislative fights and fossil fuels are at the winning end,” Anderson said, “because of where the political influence and spending are coming from.”

Although AFP Ohio testified against HB 6 in 2019, its comments focused on that law’s bailouts for FirstEnergy’s former nuclear plants, and expressly stated its opposition to the then-existing clean energy standards. “So clearly they haven’t changed their stand on that,” Anderson said.

HB 79 had broad support during committee hearings from a wide range of groups, although it wasn’t unanimous. The Office of the Ohio Consumers’ Counsel and the Northwest Ohio Aggregation Council opposed the bill due to concerns about accountability, charges for so-called lost revenues, and the sufficiency of opt-out provisions. The Ohio Manufacturers’ Association expressed concerns about those issues, as well as bill language that could be read to let utilities shut down renewable resources without the owners’ consent.

Sweeney said some of the concerns were addressed by requiring two opportunities for residential customers to opt out.

“The fact that customers can opt out at all is more than fair in terms of these programs,” said attorney Rob Kelter with the Environmental Law & Policy Center. Consumers don’t get any choice to opt out of other utility bill riders. And the substitute version of HB 79 reported out of committee gives residential customers two chances to say no, he said.

In Kelter’s view, AFP Ohio’s last-minute objection to HB 79 was “a shame, because it seems like the facts just don’t matter.”

“It’s cheaper to run these programs than it is to purchase the added energy the customers would use absent the programs,” Kelter explained. That benefits both participating and non-participating customers, he noted, because it reduces the need to buy more expensive peak power. 

Also, while consumers could make energy efficiency choices on their own, such as buying more efficient appliances, many people on tight budgets won’t make those investments without a utility rebate or other incentive to speed up their payback, Kelter said. 

“I remain optimistic that we will have a floor vote on this important legislation at some point” this year, Seitz said.

Yet “it’s a complicated bill,” Sweeney said, so she sees some work ahead for her and other supporters to explain its nuances and consumer protections to other lawmakers. “Compared to HB 6, this is a really good step in the right direction,” she said.