Carbon Tax meeting

Panelists Eddie Smith (executive director of SOPEC), Athens Mayor Steve Patterson and City Council President Chris Knisley serve on a panel at the carbon fee town meeting at the Athens Community Center last Wednesday. Photo by Dennis E. Powell.

The SOPEC carbon fee that will go before voters on the ballot May 8 has generated a fair amount of confusion since it was first brought before Athens City Council earlier this year.

Last Wednesday night, the League of Women Voters of Athens County sponsored a town hall meeting dedicated entirely to answering questions regarding the issue. Serving as panelists were Athens Mayor Steve Patterson, City Council President Chris Knisely and Southeast Ohio Public Energy Council (SOPEC) Executive Director Eddie Smith.

Before taking questions, Smith gave a brief description of the proposed 2 mill carbon fee, which would only affect those enrolled in SOPEC’s Opt-Out Electric Aggregation program. The fee, he explained, is intended to account for some of the “full cost” of carbon emissions.

A fact sheet published by SOPEC and distributed at the event states that every ton of carbon emitted causes $36 in economic damages, and every Megawatt hour of electricity generated in Ohio from coal- and gas-fired power plants produces 1,510 pounds of carbon emissions, resulting in $27 in unaccounted for damages.

SOPEC’s proposed carbon fee, which would cost the average household $1.60 to $1.80 per month, would factor in some of these environmental and economic damages, but would be less than one-10th of a full carbon fee, Smith said at the meeting. 

If the proposed fee “were a full carbon fee,” Mayor Patterson added, “that would be $21 to $24” per household per month.

Customers can “completely offset that fee” by reducing at least 2 percent of their monthly carbon consumption, Smith said. “You can avoid 2 percent of your monthly consumption in a lot of very easy ways.”

Some ways to conserve and “offset” the fee, according to the SOPEC fact sheet, include:

• Turning the water heater down to 120 degrees. “The higher the temperature, the more energy will be needed to maintain that heat until you need it,” the fact sheet states.

• Wash clothes in cold water: “Up to 90 percent of the energy consumed in washing clothes is used to heat the water.”

• Install LED light bulbs or LED strip lights in the areas where the most lighting is used.

• Turn off the lights when you leave a room and unplug appliances that are not in use. 

Turn the thermostat 1 degree closer to the outside temperature compared to where it normally would be set. This 1 degree change will “completely offset the carbon fee for the average residential customer,” the fact sheet states.

Patterson reminded the town hall attendees that the fee “is not a tax… it is an opt-out program.”

Some might ask why the measure has to go to the ballot at all if it’s not a tax.

Although the public entity “has the authority” to implement the fee without the consent of voters, Smith said, “that’s not how we work… We are asking the voters what they would like to do.” Smith said even if the “advisory ballot measure” doesn’t pass, “SOPEC’s not going to do anything” without voter approval.

The carbon fee is calculated based on the amount of carbon emitted in Ohio (as determined by the U.S. Energy Information Administration, which publishes “statewide profiles” of carbon emissions for each state in the U.S.); and the cost of carbon emissions, which is valued by the federal Environmental Protection Agency in terms of negative impacts “like creating droughts, creating food insecurity,” and other issues, Smith explained. Take those numbers, multiply them, and that equals “2.7 cents per kilowatt hour” of energy consumed, or the cost of a “full carbon fee” Smith said.

SOPEC participation in the aggregation program is about “70 or 80 percent” in the city of Athens, according to Smith, though the exact amount varies. In other words, the fee would affect the majority of city residents. 

Money gleaned from the fee would go toward a “community solar program” that would install solar panels on public buildings. Smith said the specifics of those projects will be defined with community input in the future, should the measure pass.

After residents vote on the issue on May 8, SOPEC will hold two public hearings, “and we’ll use input from those hearings for the procedural operations of this program,” Smith said. “That can include specifics” on which buildings would receive panels, or any other details concerning implementation of the solar program. “Specific details like that are not anything we can include in a ballot measure,” Smith said.

Mayor Patterson said the city of Athens has 84 mercantile accounts in its name. “That is all of our (metered) electric accounts… and some of them are rather big energy consumers,” Patterson noted, using the wastewater and water-treatment plants as examples. 

The water-treatment plant, Patterson said, is actually part of a solar panel installation plan currently in the works. “With renovations at the water-treatment plant, we have opted to include in that a 227 kilowatt solar array, which is substantial,” Patterson said. “But it’s also an expensive solar array – it’s about $375,000.” The payback on the panels could take seven to 14 years, Patterson said.

Much of the energy generated from that “behind-the-meter” project would be “recaptured and put back into the water-treatment plant… helping us offset our electric costs,” Patterson explained.

That same behind-the-meter approach would be used for solar projects funded by the carbon fee. Unlike the water-treatment plant project, however, the city won’t have to pay down the initial cost of the panels through the community solar program projects. “With this program, with the amount of money that this would generate, we would be looking at possibly $80,000 to $90,000 annually that we’d be able to roll into solar projects on other municipal buildings,” Patterson said, listing buildings such as ARTS/West, the city garage and the Community Center as possible targets.

“We’re looking at a lot of different areas where we could be doing this,” he said.

Once a project is completed under the proposed program, “the city’s going to start seeing relief from our electric bill immediately,” Patterson said. “Which in turn allows us to... start thinking about what we can do with that otherwise budgeted electric bill and using tha

money in other ways, which I think is a very prudent, responsible way to do those things.”

 

ANOTHER BENEFIT OF THE proposed program would be the opportunity to produce local Renewable Energy Certificates (RECs), which represent the “legal title to the carbon-free benefits” of energy generated from renewable sources, such as solar energy, according to the fact sheet. These RECs are purchased and transferred seperately from the actual energy generated, Smith explained at the meeting.

“The renewable portfolio standards (which were established by former Ohio Gov. Ted Strickland in 2008) create a minimum threshold that utility companies… have to supply from renewable-energy sources each year out of their total portfolio,” Smith said. Companies that do not produce their own renewable energy can purchase RECs to meet their threshold, which increases each year.

As the minimum thresholds increase, Smith said, “utility companies have to purchase more RECs to legally title their energy,” which creates a cash flow back to the true source of that renewable energy. Under the proposed program, Athens would be producing more of its own RECs as opposed to buying them from elsewhere, which is what local utility companies do now.

Under Ohio law, governmental opt-out aggregation programs such as SOPEC’s are not allowed to enroll certain types of customers, Smith said, including “customers who are enrolled under the Ohio Development Services Agency, ODSA’s program called Percent of Income Payment Plus program (PIPP)… Customers enrolled in that program are low-income customers who can’t afford their utility bills each month and are able to pay either 10 percent of their monthly income or $10 each month, whichever is greater.” Those customers would not be affected by the proposed fee as they would not be eligible for the aggregation program to begin with.

Grid-tied solar-energy customers are also not eligible for the aggregation program, Smith said, and therefore would not be affected by the fee. “That creates some interesting incentives for customers who already have solar, or if you’re thinking about solar,” Smith said.

If approved, the only way to get out of paying the fee would be to opt out of the aggregation program altogether, “if you would like to keep consuming the exact same amount of energy each month,” Smith said. For some, the fee may not even matter much.

“We actually do have people on the low end of the spectrum who’re consuming 300 kilowatt hours a month, 400 kilowatt hours a month,” Smith said of Athens city residents. “For those customers, you’re really only talking about 60 cents a month or 80 cents a month” in fees.

Smith said, if the issue passes, “Every community member enrolled in the program” will receive a letter from SOPEC explaining the fee. “If you don’t want to enroll, you have 21 days to opt out,” Smith said. Those who would like to try participating with the new fee could be enrolled for a 21-day trial period, after which they could “opt out at any time,” at no extra cost, Smith explained.

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