Chapter 4901:1-40 | Alternative Energy Portfolio Standard

Rule 4901:1-40-01 | Definitions.

• Effective: June 15, 2023
• Promulgated Under: 111.15

(A) "Advanced energy fund" has the meaning set forth in section 4928.61 of the Revised Code.

(B) "Biologically derived methane gas" means landfill methane gas; or gas from the anaerobic digestion of organic materials, including animal waste, municipal wastewater, institutional and industrial organic waste, food waste, yard waste, and agricultural crops and residues.

(C) "Biomass energy" means energy produced from organic material derived from plants or animals and available on a renewable basis, including but not limited to: agricultural crops, tree crops, crop by-products and residues; wood and paper manufacturing waste, including nontreated by-products of the wood manufacturing or pulping process, such as bark, wood chips, sawdust, and lignin in spent pulping liquors; forestry waste and residues; other vegetation waste, including landscape or right-of-way trimmings; algae; food waste; animal wastes and by-products (including fats, oils, greases and manure); biodegradable solid waste; and biologically derived methane gas.

(D) "Co-firing" means simultaneously using multiple fuels in the generation of electricity. In the event of co-firing, the proportion of energy input comprised of a renewable energy resource dictates the proportion of electricity output from the facility that can be considered a renewable energy resource.

(E) "Commission" means the public utilities commission of Ohio.

(F) "Deliverable into this state" means that the electricity or qualifying biologically derived methane gas originates from a facility within a state contiguous to Ohio. It may also include electricity originating from other locations, pending a demonstration that the electricity is physically deliverable to the state.

(G) "Demand response" has the meaning set forth in rule 4901:1-39-01 of the Administrative Code.

(H) "Distributed generation" means electricity production that is on-site and is connected to the electricity grid.

(I) "Double-counting" means utilizing renewable energy or, renewable energy credits, or energy efficiency savings to do any of the following:

(1) Satisfy multiple Ohio state renewable energy requirements or such requirements for more than one state.

(2) Support multiple voluntary product offerings.

(3) Substantiate multiple marketing or public relations claims.

(4) Some combination of these.

(J) "Electric generating facility" means a power plant or other facility where electricity is produced.

(K) "Electric services company" has the meaning set forth in division (A)(9) of section 4928.01 of the Revised Code.

(L) "Electric utility" has the meaning set forth in division (A)(11) of section 4928.01 of the Revised Code.

(M) "Energy storage" means a facility or technology that permits the storage of energy for future use as electricity.

(N) "Fuel cell" means a device that uses an electrochemical energy conversion process to produce electricity.

(O) "Geothermal energy" means hot water or steam extracted from geothermal reservoirs in the earth's crust and used for electricity generation.

(P) "Hydroelectric energy" means electricity generated by a hydroelectric facility as defined in division (A)(37) of section 4928.01 of the Revised Code.

(Q) "Hydroelectric facility" has the meaning set forth in division (A)(37) of section 4928.01 of the Revised Code.

(R) "Mercantile customer" has the meaning set forth in division (A)(19) of section 4928.01 of the Revised Code.

(S) "Ohio run-of-the-river hydroelectric facility" means a run-of-the-river hydroelectric facility placed in service on or after January 1, 1980, that is located within this state, relies upon the Ohio river, and operates, or is rated to operate, at an aggregate capacity of forty or more megawatts.

(T) "Person" has the meaning set forth in section 1.59 of the Revised Code.

(U) "PJM" means "PJM Interconnection, LLC" or any successor regional transmission organization.

(V) "Placed-in-service" means when a facility or technology becomes operational.

(W) "Renewable energy credit" or "REC" means the environmental attributes associated with one megawatt-hour of electricity generated by a non-solar renewable energy resource or its non-electric equivalent.

(X) "Renewable energy resource" has the meaning set forth in division (A)(37) of section 4928.01 of the Revised Code.

(Y) "Small hydroelectric facility" means a hydroelectric facility that operates, or is rated to operate, at an aggregate capacity of less than six megawatts.

(Z) "Solar energy resources" means solar photovoltaic and/or solar thermal resources.

(AA) "Solar photovoltaic" means energy from devices which generate electricity directly from sunlight through the movement of electrons.

(BB) "Solar renewable energy credit" or "S-REC" means the environmental attributes associated with one megawatt-hour of electricity generated by a solar energy resource.

(CC) "Solar thermal" means the concentration of the sun's energy, typically through the use of lenses or mirrors, to drive a generator or engine to produce electricity.

(DD) "Solid wastes" has the meaning set forth in section 3734.01 of the Revised Code.

(EE) "Staff" means the commission staff or its authorized representative.

(FF) "Standard service offer" means an electric utility offer to provide consumers, on a comparable and nondiscriminatory basis within its certified territory, all competitive retail electric services necessary to maintain essential electric service to consumers, including a firm supply of electric generation service.

(GG) "Waste energy recovery system" has the meaning set forth in division (A)(38) of section 4928.01 of the Revised Code.

(HH) "Wind energy" means electricity generated from wind turbines, windmills, or other technology that converts wind into electricity.

Last updated June 16, 2023 at 9:13 AM

Supplemental Information

Authorized By: 4901.13, 4905.04, 4905.06, 4928.01, 4928.02, 4928.64, and 4928.65
Amplifies: 4928.64, and 4928.65
Five Year Review Date: 3/26/2025

Rule 4901:1-40-02 | Purpose and scope.

• Effective: June 15, 2023
• Promulgated Under: 111.15

(A) This chapter addresses the implementation of the renewable portfolio standard, including the incorporation of renewable energy credits, as detailed in sections 4928.64 and 4928.645 of the Revised Code respectively. Parties affected by these renewable portfolio standard rules include all Ohio electric utilities and all electric services companies serving retail electric customers in Ohio.

(B) The commission may, upon an application or a motion filed by a party, waive any requirement of this chapter, other than a requirement mandated by statute, for good cause shown.

Last updated June 16, 2023 at 9:13 AM

Supplemental Information

Authorized By: 4901.13, 4905.04, 4905.06, 4928.02, and 4928.64
Amplifies: 4928.64
Five Year Review Date: 3/26/2025

Rule 4901:1-40-03 | Requirements.

• Effective: June 15, 2023
• Promulgated Under: 111.15

(A) All electric utilities and affected electric services companies will ensure the benchmarks set forth in division (B)(2) of section 4928.64 of the Revised Code are met. Non-electric sources as permitted by law and certified by the commission may be used to satisfy renewable energy resource requirements.

(B) The baseline for compliance with the qualified renewable energy resource requirements of section 4928.64 of the Revised Code shall be determined as follows:

(1) For electric utilities, the baseline shall be computed using one of the following methodologies:

(a) The average of total kilowatt hours sold by the utility in the preceding three calendar years to any and all retail electric customers whose electric load centers are served by that electric utility and are located within the electric utility's certified territory.

(b) The total kilowatt hours sold to any and all retail electric consumers whose electric load centers are served by that utility and are located within the utility's certified territory in the applicable compliance year. An electric utility that opts to use this methodology may in subsequent compliance years switch to the methodology described in paragraph (B)(1)(a) of this rule, but in so doing, the electric utility shall be required to use the methodology described in paragraph (B)(1)(a) of this rule for at least three consecutive compliance years.

(c) The annual sales used to compute the baseline under methodologies listed in paragraph (B)(1)(a) or (B)(1)(b) of this rule shall be based upon the annual sales as reported in the electric utility's forecast reports or reporting forms.

(2) For electric services companies, the baseline shall be computed using one of the following methodologies:

(a) The average of total kilowatt hours sold annually by the company in the preceding three calendar years to any and all retail electric consumers served by the company in the state. If an electric services company has not been continuously supplying Ohio retail electric customers during the preceding three calendar years, the baseline shall be computed as an average of annual sales data for all calendar years during the preceding three years in which the electric services company was serving retail customers.

(b) The total number of kilowatt hours sold to any and all retail electric customers who are served by the company and are located within this state during the compliance year. An electric services company that opts to use this methodology may in subsequent compliance years switch to the methodology described in paragraph (B)(2)(a) of this rule, but in so doing, the electric services company shall be required to use the methodology described in paragraph (B)(2)(a) of this rule for at least three consecutive compliance years.

(c) The annual sales used to compute the baseline under methodologies in paragraphs (B)(2)(a) and (B)(2)(b) of this rule shall be based upon the annual sales as reported in the electric services company's "Annual Reports for Fiscal Assessment" or as otherwise directed by the commission.

(3) An electric utility or electric services company may request a reduced baseline to reflect new economic growth in its service territory or service area. A company requesting a reduced baseline shall file an application with the commission seeking approval for such reduction.

Last updated June 16, 2023 at 9:14 AM

Supplemental Information

Authorized By: 4901.13, 4905.04, 4905.06, 4928.02, and 4928.64
Amplifies: 4928.64
Five Year Review Date: 3/26/2025
Prior Effective Dates: 3/26/2020

Rule 4901:1-40-04 | Qualified resources.

• Effective: June 15, 2023
• Promulgated Under: 111.15

(A) The following resources or technologies, if they have a placed-in-service date of January 1, 1998, or after, are qualified resources for meeting the qualified renewable energy resource benchmarks:

(1) Solar photovoltaic or solar thermal energy.

(2) Wind energy.

(3) Hydroelectric energy.

(4) Geothermal energy.

(5) Solid waste energy derived from fractionalization, biological decomposition, or other process that does not principally involve combustion.

(6) Biomass energy.

(7) Energy from a fuel cell.

(8) A storage facility, if it promotes the better utilization of a renewable energy resource. The amount of energy that may qualify from a storage facility is the amount of electricity discharged from the storage facility.

(9) Abandoned coal mine methane energy.

(10) Waste energy recovery system placed into service or retrofitted on or after September 10, 2012, as defined in division (A)(38)(a) of section 4928.01 of the Revised Code. The portion of the electricity production that is generated from recovered waste energy shall be recognized as renewable.

(11) A waste energy recovery system defined in division (A)(38)(b) of section 4928.01 of the Revised Code, provided that it was placed into service between January 1, 2002, and December 31, 2004.

(12) A renewable energy resource created on or after January 1, 1998, by the modification or retrofit of any facility placed in service prior to January 1, 1998.

(13) Ohio run-of-the-river hydroelectric facility.

(14) Small hydroelectric facility, regardless of placed in-service date.

(15) Biologically-derived methane gas resources, including biologically derived methane gas resources that are not converted to electricity, excluding biologically-derived methane gas resources used solely for the purpose of flaring. This includes heat captured from a generator of electricity, boiler, or heat exchanger fueled by biologically derived methane gas; and compressed natural gas produced from biologically derived methane gas.

(a) The producer of the biologically derived methane gas must adequately demonstrate measurement, verification, and quantity of biologically derived methane gas produced on a continuing basis. The method used for measuring and calculating the biologically derived methane gas produced must be approved in advance by the commission as part of the facility certification process.

(b) The energy derived from biologically derived methane gas shall be measured and verified in accordance with applicable tracking system requirements. For the purposes of converting the quantity of energy derived from biologically derived methane gas to an electricity equivalent, one megawatt hour equals 3,412,142 British thermal units. The producer must demonstrate adequate energy content, in British thermal units, and metering accuracy. Biologically derived methane gas shall be reported in megawatt hours.

(16) Distributed generation system used by a customer to generate electricity from one of the resources or technologies listed in paragraphs (A)(1) to (A)(15) of this rule.

(B) The following new or existing mercantile customer-sited resources may be qualified resources for meeting electric utilities' annual renewable energy resource benchmarks, as applicable, provided that it uses a renewable energy resource and that the mercantile customer commits the resource for integration into the electric utility's demand-response, energy efficiency, or peak-demand reduction programs pursuant to rule 4901:1-39-07 of the Administrative Code and division (A)(2)(c) of section 4928.66 of the Revised Code:

(1) Electric generation equipment that uses a renewable energy resource and is owned or controlled by a mercantile customer.

(2) A resource that improves the relationship between real and reactive power.

(3) A mercantile customer-owned or controlled resource that makes efficient use of waste heat or other thermal capabilities.

(4) Storage technology that allows a mercantile customer more flexibility to modify its demand or load and usage characteristics.

(5) Electric generation equipment owned or controlled by a mercantile customer that uses a renewable energy resource.

(C) An electric utility or electric services company may use RECs and S-RECs, as applicable, to satisfy all or part its qualifying renewable energy resource benchmarks.

(1) To be eligible for use towards satisfying a benchmark, a REC or S-REC must originate from a facility that has been certified by the commission under paragraph (D) of this rule.

(2) To become certified under paragraph (D) of this rule, an electric generating facility or a qualifying non-electric source, must demonstrate that it satisfies the following:

(a) The definition of a renewable energy resource, including solar energy resources;

(b) The applicable placed in-service date;

(c) The deliverability requirement;

(d) It is registered with, or commits to become registered with, an attribute tracking system recognized by the commission;

(e) The facility's electrical output is measured by a utility-grade meter in compliance with paragraph (B) of rule 4901:1-10-05 of the Administrative Code, for facilities with generating capacity of more than six kilowatts. Gas meters for measuring qualifying gas resources shall comply with the accuracy requirements in section 4933.09 of the Revised Code; and

(f) All other requirements as delineated in the certification application.

(3) To demonstrate compliance with a renewable energy resource benchmark, an electric utility or electric services company must retire the RECs and S-RECs with any of the following attribute tracking systems:

(a) The PJM EIS generation attributes tracking system (GATS);

(b) The midwest renewable energy tracking system (M-RETS); or

(c) Another credible tracking system approved for use by the commission.

(4) A REC or S-REC may be used for compliance any time in the five calendar years following the date of its initial purchase or acquisition.

(5) Double counting is prohibited.

(6) The RECs and S-RECs must be associated with electricity that was generated no earlier than July 31, 2008 for resources or technologies included in the definition of "renewable energy resources" by Amended Substitute Senate Bill 221 (127th General Assembly). For resources or technologies added to the definition of "renewable energy resources" by Amended Substitute Senate Bill 315 (129th General Assembly), the RECs must be associated with electricity that was generated no earlier than September 10, 2012. For resources or technologies added to the definition of "renewable energy resources" by Substitute Senate Bill 310 (130th General Assembly), the RECs must be associated with electricity that was generated, or a qualifying non-electric source that was produced, no earlier than September 12, 2014.

(7) The RECs and S-RECs must be associated with electricity, or a qualifying non-electric source, that was generated no later than the end of the compliance year.

(D) An entity seeking facility qualification shall file an application for certification of its electric generating facility, or qualifying non-electric source, upon such forms as may be prescribed by the commission. The application shall include a determination of deliverability to the state in accordance with paragraph (F) of rule 4901:1-40-01 of the Administrative Code.

(1) Any interested person may file a motion to intervene and file comments and objections to any application filed under this rule within twenty days of the date of the filing of the application.

(2) An application is deemed automatically approved within thirty days after the application is filed, unless suspended by order of the commission.

(3) If the commission suspends the application, the applicant will be notified of the reasons for such suspension and may be directed to furnish additional information.

(4) Upon commission approval, the applicant will receive notification of approval and a numbered certificate where applicable. The commission will provide this certificate number to the appropriate attribute tracking system.

(5) If an applicant withdraws an application prior to commission approval, then the case will be closed without further action from the commission.

(6) Representatives of certified facilities must notify the commission within thirty days of any material changes in information previously submitted to the commission during the certification process. Failure to do so may result in revocation of certification status.

(7) The commission may revoke a certificate due to changes that negate the facility's certification eligibility. In the event a certificate is revoked, the commission may recognize as viable compliance resources the RECs or S-RECs generated during the time of certification unless specifically stated otherwise by the commission.

(8) Certification of a resource or technology does not predetermine compliance with annual benchmarks, and does not constitute any commission position regarding cost recovery.

(E) At its discretion, the commission may classify any new technology as a qualifying renewable energy resource. Any interested person may request a hearing on such classification.

Last updated June 16, 2023 at 9:14 AM

Supplemental Information

Authorized By: 4901.13, 4905.04, 4905.06, 4928.01, 4928.02, 4928.64, and 4928.65
Amplifies: 4928.64 and 4928.65
Five Year Review Date: 3/26/2025
Prior Effective Dates: 12/10/2009, 3/26/2020

Rule 4901:1-40-05 | Annual status reports and compliance reviews.

• Effective: June 15, 2023
• Promulgated Under: 111.15

(A) Unless otherwise ordered by the commission, each electric utility and electric services company shall file by April fifteenth of each year, on such forms as may be published by the commission, an annual renewable energy portfolio status report analyzing all activities undertaken in the previous calendar year to demonstrate how the applicable renewable energy portfolio benchmarks have been met.

(1) The annual review will include compliance with the most recent applicable renewable energy resource benchmark.

(2) The annual compliance reviews shall consider any under-compliance an electric utility or electric services company asserts is outside its control, pursuant to division (C)(1) of section 4928.64 of the Revised Code.

(3) The renewable energy portfolio status reports filed by each electric utility and electric services company for the applicable compliance year shall include at least the following content that, with the exception of paragraph (A)(3)(d) of this rule, shall be made publicly available:

(a) The actual annual sales volumes used to compute the compliance baseline, including identification of the source of the sale volume figures.

(b) A quantification in megawatt-hours of all applicable renewable energy portfolio standard compliance requirements.

(c) An indication of the compliance status relative to each of the applicable renewable energy portfolio standard compliance requirements.

(d) Demonstration of status relative to the statutory three percent cost provision, for the compliance year addressed in the annual status report, pursuant to the calculation methodology described in rule 4901:1-40-07 of the Administrative Code.

(e) Identification of the attribute tracking system(s) used to demonstrate compliance.

(f) A discussion of any perceived impediments to achieving compliance with required benchmarks, as well as suggestions for addressing any such impediments.

(g) An electric services company may omit the contents required in paragraph (A)(3)(d) of this rule if the company affirms in its compliance status report that it will not seek compliance relief under division (C)(3) of section 4928.64 of the Revised Code for that year.

(B) Any person may file comments regarding an electric utility's or electric services company's renewable energy portfolio status report within thirty days of the filing of such report.

(C) Staff will review each electric utility's or electric services company's renewable energy portfolio status report and any timely filed comments, and file its findings and recommendations and any proposed modifications thereto.

(D) An annual compliance status report is deemed automatically approved unless suspended by the commission within sixty days of the filing date of staff's findings and recommendations. The commission may schedule a hearing on the renewable energy portfolio status report.

Last updated June 16, 2023 at 9:14 AM

Supplemental Information

Authorized By: 4901.13, 4905.04, 4905.06, 4928.01, 4928.02, 4928.64, and 4928.65
Amplifies: 4928.64 and 4928.65
Five Year Review Date: 3/26/2025

Rule 4901:1-40-06 | Force majeure.

• Effective: June 15, 2023
• Promulgated Under: 111.15

An electric utility or electric services company may seek a force majeure determination from the commission for all or part of a minimum renewable-energy benchmark.

(A) A decision on a request for a force majeure determination will be rendered within ninety days of an electric utility or electric services company filing a request for such determination.

(1) At the time of requesting such a determination from the commission, an electric utility or electric services company shall demonstrate that it pursued all reasonable compliance options including, but not limited to, renewable energy credit (REC) solicitations, REC banking, and long-term contracts.

(2) The request shall include an assessment of the availability of qualified resources within the service territories of any regional transmission organizations that manage transmission systems located in Ohio.

(B) If the commission determines that force majeure conditions exist, it may modify that compliance obligation of the electric utility or electric services company, as it considers appropriate to accommodate the finding.

(1) Such modification does not automatically reduce future-year obligations.

(2) The commission retains the right to increase a future year's compliance obligation by the amount of any under compliance in a previous year that is attributed to a force majeure determination.

Last updated June 16, 2023 at 9:14 AM

Supplemental Information

Authorized By: 4901.13, 4905.04, 4905.06, 4928.01, 4928.02, 4928.64, and 4928.65
Amplifies: 4928.64 and 4928.65
Five Year Review Date: 3/26/2025
Prior Effective Dates: 12/10/2009, 3/26/2020

Rule 4901:1-40-07 | Cost cap.

• Effective: June 15, 2023
• Promulgated Under: 111.15

(A) By no later than April fifteenth of each compliance year, electric utilities and electric services companies shall calculate their status relative to the statutory three per cent cost provision during the most recent compliance year. Alternatively, an electric utility or electric services company may file an application with the commission for review of its cost cap calculation prior to the date required in rule 4901:1-40-05 of the Administrative Code.

(1) A discretionary three per cent cost cap is applicable to the renewable energy benchmarks specified in division (B)(2) of section 4928.64 of the Revised Code.

(2) An electric utility or electric services company shall pursue all reasonable compliance options prior to requesting relief from compliance with the renewable energy resource requirements based on the three per cent cost cap.

(3) In the case that the commission makes such a determination that an electric utility's or electric services company's compliance costs exceed the applicable three per cent cost cap, the electric utility or electric services company may not be required to fully comply with the renewable energy benchmarks specified in division (B)(2) of section 4928.64 of the Revised Code.

(B) The calculation of the company's status relative to the statutory three per cent cost provision shall follow the multi-step process as detailed in this rule. If full compliance with the applicable benchmark would prompt a company to exceed the three per cent cost provision, the company may seek relief from the commission for that incremental portion of its compliance obligation.

(1) Determine the compliance baseline in megawatt-hours for the compliance year consistent with the applicable section of paragraph (B) of rule 4901:1-40-03 of the Administrative Code.

(2) Calculate a reasonably expected dollar per megawatt-hour figure for the compliance year.

(a) For an electric utility, the dollar per megawatt-hour figure should be a weighted average of the reasonably expected cost of the SSO supply for delivery during the compliance year, net of distribution losses.

(b) For electric service companies, this dollar per megawatt-hour figure should be a weighted average of the reasonably expected cost of supply for delivery during the compliance year, net of distribution system losses.

(3) Calculate the total cost by multiplying the dollar per megawatt-hour figure in paragraph (B)(2) of this rule by the compliance baseline calculated in paragraph (B)(1) of this rule.

(4) Multiply the total cost in paragraph (B)(3) of this rule by three per cent.

Last updated June 16, 2023 at 9:14 AM

Supplemental Information

Authorized By: 4901.13, 4905.04, 4905.06, 4928.01, 4928.02, 4928.64, and 4928.65
Amplifies: 4928.64 and 4928.65
Five Year Review Date: 3/26/2025
Prior Effective Dates: 3/26/2020

Rule 4901:1-40-08 | Compliance payments.

• Effective: June 15, 2023
• Promulgated Under: 111.15

(A) Any electric utility or electric services company that does not achieve an annual renewable energy resource benchmark shall remit a compliance payment based on the amount of noncompliance rounded up to the next megawatt hour (MWh), unless the commission has identified the existence of force majeure conditions or the commission has granted relief under the three per cent cost-cap provision.

(1) The payment for noncompliance with any renewable energy resource benchmark shall be calculated by quantifying the level of noncompliance, rounded to the next MWh, and multiplying this figure by an amount determined by the commission.

(a) The per MWh payment for renewable energy resources for the year 2009 is forty-five dollars.

(b) Beginning in the year 2010, the per MWh payment for renewable energy resources will be adjusted annually to reflect the annual change to the consumer price index as defined in section 101.27 of the Revised Code. Such adjustment will be performed by staff no later than June first of each calendar year, and calculated using the following formula:

= ((CPIYR2/CPIYR1) * current per MWh payment)

(B) Any electric utility or electric services company found to be liable for a compliance payment is prohibited from passing compliance payments on to consumers. In the event that a compliance payment is required, an electric utility or electric services company shall file an attestation, signed by a company officer or designee, indicating that it will not seek to recover the specific compliance payment from consumers. Such attestation shall be filed within thirty days of the imposition of any compliance payment requirement.

Last updated June 16, 2023 at 9:15 AM

Supplemental Information

Authorized By: 4901.13, 4905.04, 4905.06, 4928.01, 4928.02, 4928.64, and 4928.65
Amplifies: 4928.64 and 4928.65
Five Year Review Date: 3/26/2025
Prior Effective Dates: 12/10/2009, 3/26/2020

Rule 4901:1-40-09 | Annual report.

• Effective: June 15, 2023
• Promulgated Under: 111.15

(A) Pursuant to division (D)(1) of section 4928.64 of the Revised Code, staff will conduct an annual review of the renewable energy resource market and submit its findings in a report to the general assembly.

(B) Prior to its submission to the general assembly, the report will be issued for public comment by interested persons for thirty days, unless otherwise ordered by the commission.

Last updated June 16, 2023 at 9:15 AM

Supplemental Information

Authorized By: 4901.13, 4905.04, 4905.06, 4928.01, 4928.02, 4928.64, and 4928.65
Amplifies: 4928.64 and 4928.65
Five Year Review Date: 3/26/2025
Prior Effective Dates: 12/10/2009, 3/26/2020