Tuesday, January 08, 2008

Investing to Re-Energize Ohio

By Amanda Woodrum

There is a gaping hole in Ohio’s economy. At current energy prices, we are sending nearly $20 billion every year out of Ohio and out of our country in order to purchase two-thirds of our coal, 89 percent of our natural gas, and 98 percent of the oil and petroleum products we use.

We currently rank fourth among states for industrial energy use and sixth for total energy consumption. To make our economy more energy independent and reduce our need to purchase expensive and polluting fuels, we should expand Ohio’s clean energy fund. This will allow us to become more energy efficient and to replace some of our polluting energy sources with renewable energy resources such as wind, solar, and biomass, which can be produced domestically.

Eighteen states and District of Columbia are together spending nearly $2 billion for clean energy to help break down existing market barriers to energy efficiency and renewable energy products and services. Why? Because each dollar invested in renewable energy and energy efficiency creates more manufacturing, construction, retail, and service jobs than an equivalent dollar spent on conventional energy. And every public dollar spent for clean energy leverages an additional $3 in related business and consumer investment, according to the American Council for an Energy Efficient Economy.

These clean energy funds, including Ohio’s Advanced Energy Fund, are used to reduce equipment costs for clean energy products through consumer rebates, grants, and low-interest loans; to conduct statewide public-awareness campaigns; to provide incentives for industrial production of clean energy products; and to train workers for the green economy.

Clean energy funds, across the 18 states, range from $2.3 million to $440 million per year. Ohio is near the bottom of that pack. Other industrial states collect more money than Ohio annually in order to jumpstart their economies, Michigan over $66 million, New York $175 million, and Wisconsin over $82 million. Pennsylvania’s governor proposed an $850 million Energy Independence Fund.

The state of Ohio currently collects $5 million each year, through a nine cent surcharge on Ohio electric utility bills, to spend on clean energy projects and services. Compared to the $20 billion we spend on conventional energy purchased from other states and other countries, $5 million seems almost trivial.

The public benefits funds we have spent thus far on clean energy in Ohio indicate the potential for much more far-reaching gains. A little over $5 million in public fund expenditures from Advanced Energy Funds leveraged an additional $21 million in outside investment. Ohio consumers are eagerly using clean energy funds to invest in energy efficiency, solar power, wind power, and biomass equipment. Recently, $5 million in grant funding was also allocated to aid in the creation of two large-scale wind farms to help provide electricity to 45,000 Ohioans.

Ohio’s Advanced Energy Fund should be expanded, made permanent, and used to encourage both the supply of and demand in Ohio for energy efficiency improvements and renewable energy systems. A $0.003 per kilowatt-hour surcharge on energy use, or three-tenths of a cent for every 1000 watts consumed for an hour, would generate an annual fund of over $465 million. To the average residential consumer this would mean a $2.80 increase in their monthly electric utility bill.

A greatly expanded clean energy fund in Ohio could be used to implement a statewide outreach campaign to educate the public on their energy efficiency and renewable energy options, and to provide free energy audits to Ohioans and simple customer rebates for green products such as solar panels. We can also expand Ohio’s clean energy supply chain by providing financial support to potential suppliers of green energy products and services to retool their infrastructure and retrain their workers. We could create a Green Jobs Corps program to provide green employment services and weave together vocational skills training programs, union apprenticeship programs, and recognized pre-apprenticeship programs that create pathways out of poverty.

It’s time for Ohio to get serious about investing in a clean energy economy by creating a strong Advanced Energy Fund.
Woodrum is the Policy Liaison at Policy Matters Ohio, a non-partisan policy research institute. Her recent report on Ohio’s Advanced Energy Fund is on the web at www.policymattersohio.org.

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