by Richard T. Stuebi
This proposed project had been a source of controversy since it was first unveiled in April 2009. At that time, special favorable treatment was being offered by the state of Ohio to the proposed project, wherein First Energy was to have received additional renewable energy credits (RECs) for agreeing to burn woody biomass instead of coal at the Burger plant. This granting of so-called “bonus RECs” was accomplished by tucking a line-item into a completely unrelated bill, which was passed by the Ohio Assembly and signed into law by Governor Ted Strickland as part of a brokered deal with First Energy and local officials and labor leaders seeking to preserve employment at the beleaguered plant in depressed southeastern Ohio.
Alas, to many observers, the deal smelled a lot more like manure than burning wood: a recent analysis by Bloomberg New Energy Finance hinted that the bonus REC provisions associated with the planned Burger biomass repowering could have potentially “obliterated” the Ohio renewable energy markets — a market that had only been created the prior year with the passage of SB 221 including the creation of a renewable portfolio standard (RPS) requirement for Ohio utilities. The glut of extra RECs associated with the Burger biomass repowering would likely have fulfilled First Energy’s RPS requirements for years to come, thereby kneecapping the development of other worthy renewable energy projects in Ohio — which was, after all, the intent of the SB 221 RPS.
Assessing the aftermath of the Burger debacle: Ohio lawmakers have created an unfortunate precedent for making exceptions to the RPS bill for politically-preferred projects. First Energy spent a reported $15 million on engineering work for a project that has now died — and I’m guessing that First Energy’s customers will likely foot the bill for work that turns out to be irrelevant. Lastly, plant employees find out that the grand pronouncements of the past year turned out to be hollow, and the economic promises were in vain.
All in all, a story with no real winners and lots of losers.