Round two: community solar legislation introduced again in the Ohio General Assembly with notable differences

On Monday, June 6, 2023, State Representatives James Hoops (R-Napoleon) and Sharon Ray (R-Wadsworth) introduced legislation, House Bill 197, which establishes a community solar pilot program and an Appalachian-focused solar development program. While similar to legislation introduced in the previous General Assembly (H.B. 450), this proposal has some notable differences.

Community Solar Pilot Program

Under current law, community solar is not available in electric distribution utility (EDU) territories. H.B. 197 proposes permitting such projects, provided the facility:

1. Is located in Ohio and connected to an EDU’s distribution system;
2. There are at least three subscribers to the facility;
3. The facility is located on one parcel of land, or there are no contiguous parcels developed, owned, or operated by the same entity unless:
   1. The parcel or parcels are located at a distressed site, and all of the community solar facilities do not exceed 20megawatts; or
   2. All of the following:

i. The facility is located on a parcel or parcels that were created prior to the effective date of the legislation;

ii. Total capacity does not exceed 10 megawatts;

iii. Each facility has its own distinct point of interconnection with the serving EDU, including separate and distinct metering;

iv. The generation components for each facility are completely separate (including separate fencing); and

v. The facilities only share non-operational infrastructure, such as access roads.

4. No subscriber holds more than 40% proportional interest in the output of the system;
5. Not less than 60% of the facility’s capacity is subscribed by subscriptions of 40 kilowatts or less average annual demand;
6. The facility’s nameplate capacity is 10 megawatts or less, or 20 megawatts or less at a distressed site;
7. The facility is not under the control of an EDU, but may be under the control of a competitive affiliate of an EDU; and
8. The facility provides retail electric service only to subscribers within the same EDU territory.

Similar to the previous legislation, and as noted above, facilities located at “distressed sites” can have an increased capacity up to 20 megawatts. The legislation defines a distressed site as:

1. A brownfield, as defined by Ohio Revised Code Section 122.65.
2. A parcel located within an area eligible for a new market tax credit.
3. A solid waste facility.
4. An energy community under 26 U.S. Code 45(b)(11)(B)(iii) that is within a census tract, or adjoining census tract, with a closed coal mine or retired coal-fired power plant.
5. Land owned by a metropolitan housing authority.
6. Land owned by a county land reutilization corporation.

Subscriber is also a defined term in H.B. 197 and means any retail electric customer who meets all of the following:

1. Customer has a single unique tax identification number.
2. Has an electric meter on their property.
3. Resides within the certified territory of an EDU.
4. Purchases a subscription to the community solar facility’s output.

Overall the community solar pilot program is limited to 1,500 megawatts. The Public Utilities Commission of Ohio (PUCO) is directed to annually certify 250 megawatts until 1,000 megawatts are certified. The certified megawatts are to be allocated proportionally according to the size of each EDU’s retail electric sales. Uncertified megawatts can carry over until the program is fully certified. Applications for certification are certified in the order that the applications are received.

The remaining 500 megawatts in the community solar pilot program are to be reserved for facilities constructed exclusively on distressed sites. A community solar organization that develops a brownfield site is also eligible to receive a brownfield remediation grant awarded by the Ohio Department of Development under section 122.6551 of the Ohio Revised Code.

Appalachian Solar Development Program

The legislation also creates a solar development program comprising of 250 megawatts developed in the state’s Appalachian region. H.B. 197 defines the Appalachian region using the definition found in existing ORC Section 107.21. Subscribers to a project in this program receive a credit for distressed site bill credit under the community solar pilot program. Appalachian sites can have co-located projects on the same parcel of land or on contiguous parcels.

Required Rulemaking and Stakeholder Working Group

The legislation requires the PUCO promulgate rules to administer the program, which is common in legislation establishing new programs. H.B. 197 prescribes specific topics to be addressed. This includes the transferability or portability of subscriptions, require EDUs to efficiently connect community solar facilities to electrical distribution grids, allow EDUs to recover reasonable costs associated with administering community solar, prohibit cross-subsidization of costs between customer classes, and consumer protections for subscribers.

H.B. 197 also proposes a stakeholder working group to assist the PUCO staff with promulgating rules for the program. The working group includes EDUs, consumer advocates, representatives of the community solar industry, and any other interested parties.

Similar rules are required for both the community solar pilot and the Appalachian solar development programs.

Program Review

Finally, H.B. 197 requires, 48 months after each program’s rules have been promulgated, that the PUCO conduct a review and submit a report to the General Assembly. The report will include details on the number of sites and their locations, the number of subscribers, and information about the customer classes that subscribed.

Conclusion

H.B. 197 now begins the legislative process. As the legislation evolves through deliberations and amendments, the Bricker Graydon team is monitoring and can keep you abreast of any and all changes to the legislation.