Fuel Cell Manufacturer Moves to Ohio; Legislature Considers Renewable Energy Options

Gongwer News Service - November 7, 2005

Gongwer News Service

A major manufacturer of fuel cell components announced Monday it would move its corporate headquarters from Wilmington, Delaware to Parma in what Ohio policymakers hope is just the latest development in the area of alternative fuel technology.

The deal with GrafTech International Ltd is contingent on the approval of a package of incentives offered by the governor’s
administration. Several other alternative fuel initiatives, including incentives for their use and development, are underway both in the administration and the Legislature.

“GrafTech’s move is a testament to the workers of Northeast Ohio and proof that Ohio continues to be a leader in cutting edge technology,” Lt. Governor Bruce Johnson said in announcing the move at an event in Parma.

A $100 million Ohio Fuel Cell Initiative is already in place as part of the governor’s “Third Frontier” program for high-tech development. On Tuesday, Ohio voters will be asked to endorse a $2 billion bond package that includes another $500 million in debt for research initiatives.

GrafTech International Ltd., which already operates a research and development facility in the Cleveland suburb, manufactures electronic products including a part currently used on 85% of all fuel cell vehicles, according to the company. It reports total sales of nearly $1 billion in 80 countries.

The administration expects the move to create at least 25 new jobs averaging more than $75 an hour.

Department of Development spokesman Bill Teets said the company’s relocation was dependent on state approval of several incentives: $1 million in job creation tax credits; $200,000 in job training grants; and $350,000 in business development grants for purchasing machinery. The incentives are likely to be approved by the Controlling Board and Tax Credit Authority, he said.

The company’s CEO Craig S. Shular said that Ohio’s favorable business climate was a major factor in the decision to relocate here. The company was recently awarded a $600,000 Third Frontier grant to help commercialize its fuel cell technology.

Policy Matters Ohio, which recently released a report showing renewable energy investments could create 22,000 jobs in Ohio, said the state should do more than just offer tax incentives to promote the new industry.

Amy Hanauer, PMO executive director, said the state should implement a renewable energy portfolio standard, which would require utility companies to generate a certain portion of their retail electric load using renewable resources. She said such a requirement would create the demand for renewable energy, which would ensure that the industry grows.

In answer to critics who say such mandates would scare companies away from the state, Ms. Hanauer said, “It’s not like imposing a requirement on some totally portable industry. (Electric companies) can’t sell electricity to Ohio consumers from Michigan.”

Legislative Action: The General Assembly is currently considering several bills aimed at increasing the state’s drive toward alternative energy use. Rep. Michael Skindell (D-Lakewood), for example, has introduced legislation to require a renewable energy portfolio standard.

Proposals included in legislation (HB 245) sponsored by Rep. Steve Reinhard (R-Bucyrus) that has already cleared the House would require 90% of new state vehicles purchased after July 1, 2006 to be capable of using alternative fuels such as ethanol or soybean-based biodiesel. It would also create tax credits and grants to increase the retail supply of ethanol and biodiesel fuels. According to Mr. Reinhard, the measure could save $37.5 million annually in tax dollars.

The bill, which is currently being considered in the Senate along with Sen. Larry Mumper’s (R-Marion) companion measure (SB 156), has prompted questions as to how to pay for grants and tax credits, how much they would cost, and how biofuel users would sell credits to one another.

Mr. Skindell’s bill (HB 247) would require power companies to generate 3% of the supply mix using wind, biomass, geothermal, and solar energy by 2007, increasing to 20% by 2021.

The bill also provides for the Public Utilities Commission of Ohio to develop a “renewable energy credit” system similar to that of the Clean Air Act, which would allow for compliance flexibility, according to the sponsor.

Rep. Skindell also recently introduced a proposal (HB 398) to create a sustainable energy council with the task of monitoring and assisting the development of the fledgling industry in Ohio.

Democrats have introduced a handful of other proposals encouraging and requiring the use of renewable energy resources that have thus far stalled in the Republican-led legislature.

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