Ohio Advances Major Energy Legislation: H.B. 15 and S.B. 2 Clear Key Hurdles and Await Final Approval

Significant energy legislation in both chambers of the Ohio General Assembly recently passed important procedural milestones. On March 26, 2025, the Ohio House passed House Bill 15 (Klopfenstein) by a vote of 90 to 3. The Ohio Senate previously passed Senate Bill 2 (Reineke) unanimously on Wednesday, March 13, 2025.

You can use our previous summaries of H.B. 15 and S.B. 2 to follow the full evolution of these bills.

The bills contain many similarities, such as the elimination of electric security plans (ESPs), mandatory rate cases for Ohio’s electric distribution utilities (EDUs), repeal of subsidies enacted as part of H.B. 6 (2019), and quicker timelines on procedures and applications at both the Public Utilities Commission (PUCO) and Ohio Power Siting Board (OPSB).

This post summarizes some of the major provisions of the bills and highlights some remaining key differences.

Procedurally, the House and Senate must come to an agreement before the legislation is sent to Governor DeWine for his signature.

I. Electric Security Plans.

Both bills repeal ESPs. Critics have long contended that ESPs allowed utilities to avoid full rate cases and get approval for costly riders. Both H.B. 15 and S.B. 2 repeal the ESP statute.

II. Mandatory Rate Cases.

With the repeal of ESPs, Ohio’s utilities must return to routine filing of rate cases. H.B. 15 and S.B. 2 require EDUs to file mandatory rate cases by December 31, 2029, and at least every three years thereafter.

III. Customer Refunds.

In a move long sought by consumer advocates, both bills create a mechanism for customer refunds. In Keco Industries v. Cincinnati Suburban Bell Tel. Co. (1957), 166 Ohio St. 254, 2 O.O.2d 85, 141 N.E.2d 465, the Ohio Supreme Court held that where the PUCO issued an order, a court’s later reversal of that order did not support a customer refund under current Ohio law and could only apply to future charges. Both H.B. 15 and S.B. 2 authorize customer refunds for rates or riders found to be unreasonable, unlawful, imprudent, or otherwise improper by the Ohio Supreme Court from the date of the Court’s decision until the PUCO makes changes to the rate or rider.

IV. OVEC Subsidy Repeal.

Both bills repeal the subsidies to the Ohio Valley Electric Company (OVEC). Originally enacted by H.B. 6 (2019), the rider has cost Ohio ratepayers nearly $500 million since the scandal-tainted legislation passed. An attempt to amend H.B. 15 to allow cost recovery to continue until December 31, 2026, failed in the House Energy Committee. As a result, both bills end the subsidies upon the effective date of the legislation.

V. Solar Energy Subsidies.

Both bills also repeal the limited solar subsidies created by H.B. 6 (2019). S.B. 2 repeals the subsidies and redirects funds collected but not yet remitted to qualifying solar projects to a new fund called the School Energy Performance Contracting Loan Fund. This new fund, to be administered by the Ohio Facilities Construction Commission, provides loans to pay for energy conservation, measure installment contracts, and energy-saving measure contracts. This includes installation of solar panels.

H.B. 15 requires unspent funds to be refunded to ratepayers.

VI. Priority Investment Areas.

Both bills create Priority Investment Areas (PIA). Local governments petition the Ohio Department of Development to designate a brownfield or former coal mine as a PIA. PIA designation brings favorable tax treatment under the tangible personal property (TPP) tax. In PIA’s, TPP used to transport or transmit electricity or natural gas is exempted from the TPP tax for 5 years after being placed into service. Last, projects in a PIA receive expedited review by the Ohio Power Siting Board (OPSB) through a 45-day siting process.

One difference in PIAs is H.B. 15 makes PIA projects eligible to receive a Brownfield Remediation Program grant of up to $10 million. The Brownfield Remediation Program provides grants to assist in the remediation of hazardous substances or petroleum at an industrial, commercial, or institutional property

VII. Behind-the-Meter Generation.

Both bills contain numerous provisions designed to enhance customers’ ability to utilize behind-the-meter (BTM) generation. Current law in Ohio supports BTM projects when located on the customer’s premises. Both bills expand the ability to utilize BTM generation by allowing for the generation project to be located on property owned or controlled by the mercantile customer or the entity that owns or controls the generation system. Both bills also contemplate BTM generation systems that serve multiple mercantile customers.

S.B. 2, however, imposes a limitation of a one-mile distance between the BTM generation system and the mercantile customer(s). H.B. 15 contains no such limitation.

VIII. Utility Owned Behind the Meter Generation.

Both bills prohibit utility ownership of generation, but current Ohio law contains some ability for the electric distribution utilities (EDU) to own, operate, or contract for BTM generation for mercantile customers. To address this, both bills prohibit future utility ownership or operation of BTM generation systems, but do so slightly differently. H.B. 15 grandfathers existing projects where an existing agreement is on file with the Public Utilities Commission (PUCO) prior to the effective date of the bill. S.B. 2 grandfathers utility owned/operated BTM generation in operation prior to the effective date of the bill.

IX. Tangible Personal Property Tax.

In an effort to spur more investment, both bills make considerable changes to Ohio’s tangible personal property (TPP) tax as it applies to electric companies (companies that generate, transmit, or distribute electricity), rural electric companies (electric cooperatives), energy companies (companies that generate, transmit, or distribute electricity from a facility with a nameplate capacity of more than 250 kilowatts from specified types of generation technology), and pipeline companies.

The chart below shows current TPP tax rates and the proposed changes in H.B. 15 and S.B. 2 (please note the PIA TPP tax rates already mentioned above are not included in the chart):

Company Type	Current TPP tax assessment percentage	H.B. 15 TPP tax assessment percentage	S.B. 2 TPP tax assessment percentage
Electric company	Transmission/distribution TPP: 85% Energy conversion TPP: 85% Other TPP: 24%	New transmission/distribution TPP: 25% Existing transmission/distribution TPP: 85% New energy conversion TPP: 7% Existing energy conversion TPP: 85% New generation TPP and repowered or converted existing generation TPP: 7% Other existing generation TPP and other TPP: 24%	New TPP used to generate electricity or convert energy if first used in 2026 or a future year is exempted from TPP tax. New TPP used to transmit or distribute electricity first subject to tax in 2027 or after: 25% Existing TPP used to transmit or distribute electricity before 2027: 85% Other energy conversion TPP: 50% Other generation TPP: 24%
Rural electric company	Transmission/distribution TPP: 50% Energy conversion TPP: 50% Other TPP (includes generation): 25%	New transmission/distribution TPP: 25% Existing transmission/distribution TPP: 50% New energy conversion TPP: 7% Existing energy conversion TPP: 50% New generation TPP and repowered or converted existing generation TPP: 7% Other existing generation TPP and other TPP: 25%	New TPP used to generate electricity or convert energy if first used in 2026 or a future year is exempted from TPP tax. New TPP used to transmit or distribute electricity first subject to tax in 2027 or after: 25% Existing TPP used to transmit or distribute electricity before 2027: 50% Other energy conversion TPP: 50% Other generation TPP: 25%
Energy company	Generation TPP: 24% Other TPP: 85%	New transmission/distribution TPP: 25% Existing transmission/distribution TPP: 85% New energy conversion TPP: 7% Existing energy conversion TPP: 85% New generation TPP and repowered or converted existing generation TPP: 7% Other existing generation TPP and other TPP: 24%	New TPP used to generate electricity or convert energy if first used in 2026 or a future year is exempted from TPP tax. New TPP used to transmit or distribute electricity first subject to tax in 2027 or after: 25% Existing TPP used to transmit or distribute electricity before 2027: 85% Other energy conversion TPP: 85% Other generation TPP: 24%
Pipeline company	88%	New TPP: 25% Existing TPP: 88%	New TPP first subject to tax in 2027 or thereafter: 25% Existing TPP: 88%

Both bills make clear that existing laws authorizing real and TPP tax exemptions for certain renewable energy projects, including any payments in lieu of taxes (PILOTs), continue to apply despite modifications from the legislation.

X. Provisions Unique to Each Bill.

In addition to the substantive differences outlined above where the bills are similar, both bills also contain unique provisions.

1. Unique Provisions of S.B. 2:

• Applicability of County and Township Zoning to Generation: A previous General Assembly enacted provision making it clear that solar generation projects under 50 MW could not utilize a common law exemption from local zoning for public utility facilities. S.B. 2 further applies local zoning to all types of generation under 50 MW. Generation facilities above 50 MW are regulated by the OPSB and not subject to local zoning.
• Demand Response Programs: S.B. 2 allows an EDU to create a voluntary demand response program (DPR). In a DPR, an EDU enters into an agreement with a residential customer or small commercial customer permitting the EDU to reduce the customer’s load during peak times. An example could be lowering a thermostat to reduce energy consumption. A customer can override the load decrease.

     B. Unique Provisions of H.B. 15:

• Advanced Transmission Technologies: Contains definitions of “advanced transmission technologies” and “advanced conductor” and provisions designed to both study and promote the utilization of grid-enhancing technologies.
• Community Energy Systems: Establishes the Community Energy Pilot Program and authorizes the construction and development of community energy systems. This provision is similar to legislation from previous General Assemblies creating a community solar pilot program, but in H.B. 15, the community energy system is generation-neutral.
• Heat Maps: H.B. 15 requires entities that own or control electric transmission facilities in Ohio, that are not a regional transmission organization, to create a “heat map.” Heat maps show locations with available capacity in the transmission grid.
• Electric Transmission Line/Major Utility Facility Classification: H.B. 15 adjusts the definition of “major utility facility” to include an electric transmission line, and related facilities, with a design capacity threshold of 60kV. Current law is 100kV. In addition, the replacement or rebuilding of an existing transmission line of one mile or more in length constitutes the construction of a major utility facility and requires an application to the OPSB.
• OPSB Technical or Legal Staffing: The legislation authorizes the PUCO Chair to hire additional technical or legal staff for the OPSB, funded through application fees or additional fee assessments.
• Repowering Wind Projects: H.B. 15 clarifies that a wind project that applies for an OPSB certificate modification to repower turbines (installing newer, more efficient equipment) is subject to the setbacks in law at the time the project was granted a certificate and that the application for a modified certificate is subject to S.B. 52 (2021).

XI. Next Steps.

Negotiators from the House and Senate will convene to combine the two bills into one final package. Both chambers will need to pass the compromise version. For example, the House could amend and pass S.B. 2 with the agreed-upon changes. The Senate then needs to vote to concur in the House amendments. The legislation approved by both chambers goes to Governor DeWine for his signature. After the Governor signs the legislation, the bill takes effect 90 days later.

Given that the General Assembly is also working on the state operating budget (H.B. 96), and they are quickly approaching a planned spring break (both chambers currently have no sessions scheduled between April 10, 2025 and April 30, 2025), it’s possible a final bill could be agreed upon and sent to Governor DeWine very soon. If not, expect additional action in late-April or early-May.