McNamara: FirstEnergy lacks solar commitmentWritten by Joe McNamara | | email@example.com
Investment in solar energy equals jobs for Toledo. We have received national recognition as a hub for solar energy. Public institutions like the City of Toledo, the University of Toledo and the Toledo-Lucas County Port Authority are all working on economic development opportunities related to renewable energy. On the private side, companies like Xunlight and First Solar have attracted investment and created jobs.
Unfortunately, a very important missing partner in this growing opportunity is FirstEnergy and its wholly owned subsidiary Toledo Edison. What is most perplexing about FirstEnergy’s lack of investment in solar energy is the fact that it is legally obligated to participate in the industry.
In 2008, the General Assembly passed a set of new laws mandating increased use of renewable energies. This legislation is frequently referred to as SB 221. Among the various requirements of SB 221 are solar benchmarks that mandate certain percentages of the electricity distributed by an electric distribution company (like Toledo Edison) to be generated from solar. The solar percentage gradually increases each year until 2024.
An electric utility company need not actually generate the electrons itself, but can elect instead to buy what are called Solar Renewable Energy Credits or SRECs from other generators. Other generators can include small and large businesses, nonprofit institutions such as the Toledo Museum of Art, or homeowners. The creation of SRECs made a very flexible market for the electric distribution companies to meet the requirements of SB 221, but still promote the demand for more solar energy.
FirstEnergy has two other electric distribution subsidiaries in Ohio: the Ohio Edison Company and The Cleveland Electric Illuminating Company. All three subsidiaries failed to meet the solar benchmarks required by state law. For Toledo Edison, this is the second year in a row the company has failed to obtain the necessary SRECs. Last month the FirstEnergy subsidiaries filed a request with the Public Utilities Commission of Ohio to be excused from the 2010 solar requirements.
According to its application, the FirstEnergy subsidiaries issued Requests for Proposals to buy Ohio SRECs. Through this process they obtained 112 SRECs out of the 3206 SRECs it was legally obligated to obtain. FirstEnergy complains that the “Ohio SREC market is constrained,” but it did nothing to facilitate the growth of this market. Where other electric distribution companies entered into long-term power purchase agreements, which helped finance the construction of new solar arrays and the consequent production of new SRECs, FirstEnergy “considered long term contracts but could not negotiate a contract that would provide SRECs for the 2010 calendar year.”
In other words, FirstEnergy attempted to buy SRECs that were already on the market, but did nothing to create new solar projects and new 2010 SRECs. The entire point of SB 221 was to foster the market for solar by requiring electric distribution companies to invest resources in obtaining SRECs.
Compare FirstEnergy’s approach with that of American Electric Power (AEP). AEP entered into a long-term contract with a company who built a 10 megawatt solar field 90 minutes south of Toledo. The solar panels used to build the array were manufactured by First Solar. In other words, an electric company that does not even serve the Toledo area has done more to create jobs in the Toledo area than our very own Toledo Edison.
The 2010 solar benchmarks were met by other Ohio electric distribution companies. But unsurprisingly, all three of FirstEnergy’s subsidiaries failed to comply with the law.
Investing in solar power is particularly important to Toledo because of the opportunity to create jobs. In the past, FirstEnergy has helped Toledo with economic development and financial issues.
For example, in 2009, FirstEnergy Solutions contributed $3.2 million to reduce the city’s budget deficit in exchange for an electric aggregation contract extension. However, when it comes to solar energy, FirstEnergy just can’t see the light.
Representatives from Toledo Edison and FirstEnergy have made statements clearly indicating that the company does not support solar. For example, Trent Smith has stated that the economics of solar power are not viable in the Toledo area. FirstEnergy spokeswoman Ellen Raines stated that “[w]e don’t believe we have the expertise to be a solar developer.” How can a company that runs multiple nuclear power plants not be able to find the resources and expertise to develop legally mandated solar arrays?
While FirstEnergy may ultimately be fined by the Public Utilities Commission of Ohio for failing to invest in solar, the real loss are the Toledo jobs that would have been created had FirstEnergy complied with the law. I sincerely hope that FirstEnergy will reverse its intransigence toward SB 221 and begin to actively invest in Toledo solar jobs.
Joe McNamara is a Toledo City Councilman. E-mail him at firstname.lastname@example.org.