Ohio legislators close the year with a final gift to natural gas corporations
House Bill 201, which would prevent Ohio from implementing emissions standards stricter than those required by the federal government, is one of several bills awaiting Governor DeWine’s signature – likely among the last legislative actions of 2023. The bill was originally introduced to prohibit any state agency from adopting California’s motor vehicle emissions standards and prohibits local governments from placing restrictions on the use or sale of a motor vehicle based on its fuel source.
Although the bill initially received limited interest, HB 201 passed the House and Senate with a last-minute, pro-utility amendment. The original version of the bill – which remained unchanged from when it was introduced until one day before it cleared the legislature – contained 19 lines of text. The bill passed by the Senate, however, contained 242. Although a large majority of the language has no relevance to motor vehicle restrictions or emissions standards, lawmakers – and the public – had less than 48 hours to review the changes before HB 201 was finalized for DeWine’s signature. If Governor DeWine does not veto the bill by December 29, then HB 201 will become law with or without his signature.
Corrupt energy policies and state preemption against local progress are not new in Ohio. These trends are perfectly exemplified by HB 201 and its questionable timeline:
Proponents’ arguments in favor of the original language, as introduced and passed in the House, are centered on protecting free markets and consumer choice. According to the bill’s supporters during its hearings in the House, electric vehicle mandates would harm Ohio’s auto manufacturing industry, driving up costs for auto manufacturers and consumers. Ironically, the amendment included in the legislation passed by the House and Senate enables natural gas companies to shift costs of potential infrastructure development projects onto customers – a change that directly contradicts those arguments.
Amended HB 201, now on the Governor’s desk, adjusts the current infrastructure development rider (IDR) law, which allows natural gas companies to recover costs of infrastructure improvements for economic development projects from their customers. The IDR’s current monthly cap of $1.50 per customer would remain, but natural gas companies could use the IDR to recover more costs under the expanded definition of “infrastructure development.”
The expanded definition of infrastructure development equips natural gas companies with more power to upgrade or build new gas pipelines, with assurance that those expenses can be shifted onto ratepayers without adequate oversight or accountability mechanisms in place. This lowers investment risks for gas companies and raises utility bills for ratepayers, or any Ohioan with a gas bill. If any infrastructure development costs would lead to an IDR exceeding the $1.50 cap, then gas companies could defer those costs, meaning ratepayers could be responsible for their investments for an indeterminate length of time – gas companies can recover deferred costs for up to five years after PUCO’s approval, but they have up to six years to apply for that approval.
Proponents of this amendment (i.e., natural gas companies) claim Ohio doesn’t have enough “shovel-ready” sites to attract developers for large-scale economic development projects. Amended HB 201 facilitates the construction of natural gas pipelines at potential project sites, even without a designated project developer or end-user in mind. The new IDR includes infrastructure expenses incurred before an economic development project is approved – the project just has to have preliminary support from JobsOhio, any of JobsOhio’s partners, or the Department of Development – so the intended projects at these sites may never materialize, but customers would still have to pay their natural gas provider for their infrastructure investments.
It's unclear why an IDR expansion is necessary, especially considering other funding and cost-shifting mechanisms in place to accommodate site-ready economic development projects. For example, Ohio’s 2024-25 operating budget established the All Ohio Future Fund to provide $750 million in interest-free loans for that very reason. Moreover, natural gas companies can already recover expenses for infrastructure upgrades through the existing IDR and other capital investment riders approved by the Public Utilities Commission. Ultimately, this amendment makes it easier for gas companies to push higher costs onto everyday Ohioans – protecting natural gas companies, not consumers.
Several legislators who voted against HB 201 were wary about the last-minute amendment – a change this drastic should warrant its own separate bill, allowing time for meaningful consideration, testimony and input from non-utility groups. Private utility companies have historically exerted undue influence over Ohio’s legislature, as seen when the FirstEnergy bribery scandal was exposed, but only after House Bill 6 subsidized dying coal plants at ratepayers’ expense. The quick turnaround from the first mention of the amendment to its inclusion in the final version of HB 201 indicates the natural gas industry’s continued power behind the scenes of the Statehouse.
Notably, during the December 12 hearing when this amendment was first discussed, the only proponents prepared to testify on the IDR changes included natural gas companies and one economic development organization. HB 201 is yet another example of utilities’ shameless effort to secure larger returns on investments through last-minute amendments added to unrelated pieces of legislation. After the fallout of infamous HB 6, Ohio’s lawmakers should be more cautious about utility companies’ encroachment in the legislative process.
As long as the priorities of fossil fuel-reliant utility companies outweigh the importance of our communities’ health and economic wellbeing, Ohio’s efforts to address climate change will be ineffective. We deserve lawmakers who listen and respond to our needs, not the private interests of the fossil fuel industry.
Governor DeWine has until December 29 to veto this unvetted giveaway.