The United States is experiencing a major shift in the ways we produce and consume energy. As this shift takes place, Ohio’s workers stand ready to benefit from new opportunities to manufacture, engineer, construct, and operate renewable energy facilities.
Ohio was a powerhouse of coal mining and coal-fired generation for decades. But as that infrastructure has aged, the cost of certain generation sources has declined significantly and demand for clean energy has grown. This is creating a new economic opportunity to carry on Ohio’s proud history of being an energy producing state.
But just as Ohio’s utility-scale solar industry takes off, with the potential to create more than 54,000 jobs, the Ohio legislature has introduced legislation that works to stop clean energy development — Senate Bill 52 and House Bill 118. The focus for anyone concerned about energy policy and economic growth in Ohio should be on what it takes to get these projects moving and get people to work. Policy proposals like these should be roundly rejected.
The International Brotherhood of Electrical Workers (IBEW) represents nearly 20,000 workers in Ohio and is the largest energy union in the world. Our local labor halls represent members responsible for keeping all generation sources running — fossil fuels and carbon neutral sources alike. IBEW locals in Ohio have been diligently training our workforce for the growing solar energy economy and stand ready to actively participate in the industry’s growth.
Just over a decade ago, Ohio’s Republican-controlled legislature created something called a Payment in Lieu of Taxes, also known as a “PILOT.” The IBEW was at the table with Ohio’s education leaders, local governments, industry and others helping to develop the legislation so it would protect our communities and create thousands of jobs.
When a PILOT is adopted for a renewable energy project, local taxing entities like schools, counties, and townships will receive guaranteed revenues that will hold stable for the life of the project. In most cases, this will be millions of dollars each year. For a 300 MW solar facility, it is expected to be upwards of $2.7 million each and every year of the project’s life.
In a typical development, assets depreciate over time and lose value, reducing the revenue to local governments and schools as the project ages. However, a PILOT guarantees a set amount of revenue for 30-40 years that is predictable and stable. This allows local government leaders to plan a long-term strategy on how resources can be used. Without the PILOT, local governments will lose money each year as equipment depreciates in value.
Typically, when there are increased revenues in a school district, the district will be penalized through the state-based formula — meaning less money from the state. However, the PILOT was created to shield schools from any loss in state revenue due to clean energy projects. Regardless of any new revenue from a solar project, it will not count against the state-based formula. Without the PILOT, when a renewable project is built, schools would lose a critical source of state revenue as a result of receiving increased revenue from the new project.
Michael Ruppert is the business manager of the International Brotherhood of Electrical Workers Local 32.