COLUMBUS, Ohio – Natural gas companies could soon charge Ohio customers tens of millions of dollars more per year to build pipelines to potential megaproject sites under legislation signed into law by Gov. Mike DeWine on Thursday.
DeWine’s signature on House Bill 201 marks an about-face from earlier this year, when he used his line-item veto authority to strip out a similar proposal from the state’s massive two-year budget plan.
HB201, a Republican-sponsored bill that passed the legislature in near party-line votes, was originally written to prohibit the Ohio Environmental Protection Agency or local governments in the state from restricting the sale of gasoline-powered cars in order to promote the use of electric vehicles.
But under language added by lawmakers roughly 36 hours before HB201 passed both the House and Senate, gas companies can charge Ohio’s 3.7 million gas customers up to $1.50 per month for as long as five years to extend gas lines to sites that could potentially be used for megaprojects, even if no buyer has been lined up yet. Sites or projects would only be eligible for the fee if they are supported by JobsOhio (the state’s economic development non-profit), regional affiliates of JobsOhio, or the Ohio Department of Development.
The non-partisan Legislative Service Commission previously estimated that a similar version of the measure would cost Ohio’s 3.7 million natural-gas customers a total of about $67 million per year, though that calculation was based on a $3 monthly charge instead of $1.50.
Natural gas utilities say the new law will give them the money they need to help prepare sites that attract companies like Intel, which is building a $20 billion computer-chip manufacturing complex near Columbus. Their lobbyists told lawmakers that economic development is cutthroat between states, and large industrial buyers want “shovel ready” sites that are already hooked up to water, gas, electric and sewer.
Gas companies have already been allowed under Ohio law to impose such a monthly charge for “prudently incurred” costs. HB201 expands when gas utilities can charge the fee to include helping to develop potential megaproject sites.
Earlier this month, DeWine told reporters that while Ohio – particularly around Columbus — has been “on a roll” when it comes to attracting large development projects, more rural areas of the state suffer because they don’t have the infrastructure in place to support megaprojects.
“So the ability for utilities to invest and provide the gas, provide whatever, to those sites is very important,” the governor said.
He didn’t include any statement in announcing the bill signing Thursday.
Opponents of the bill, including a number of mostly Democratic lawmakers, the Ohio Manufacturers Association, and environmental groups, argued that it would allow utilities to make customers pay to assist private corporations and upgrade almost any part of their system in the name of economic development.
“The problem with speculative, Field of Dreams, ‘If you build it, they will come,’ is if they don’t come, we and all ratepayers are left holding the bag,” said Kim Bojko, a lobbyist with the Ohio Manufacturers Association.
She said regulators currently use a standard of ensuring new infrastructure is “used and useful” before allowing utilities to pass its costs on to customers. The legislation, she said, runs a risk of regional economic development officials putting customers on the hook to pay to build out a megasite hoping to lure a buyer who might choose another part of the state instead.