To enact section 4905.88 of the Revised Code to establish an annual renewable energy requirement for electric utilities and electric services companies that provide retail electric generation service in Ohio and to authorize the Public Utilities Commission to establish a system of renewable energy credits.

Section 1. That section 4905.88 of the Revised Code be enacted to read as follows:

Sec. 4905.88. (A) As used in this section:

(1) "Biomass" means any organic matter, including either of the following:

(a) Any organic material from a plant that is grown exclusively to be used in the production of electricity, on land that was in crop production on the effective date of this section; or on land that is protected under the federal conservation reserve program, provided the planting does not adversely affect the water quality protection, soil erosion prevention, or wildlife habitat enhancement purposes of that program;

(b) Any solid, nonhazardous, cellulosic waste that is derived from waste pallets, crates, dunnage, or landscape or right-of-way tree trimmings, from agricultural sources including orchard tree crops, vineyards, grains, legumes, or sugar, or from any crop byproducts or residues.

"Biomass" excludes forestry resources; agricultural resource waste necessary for maintaining soil fertility or for preventing erosion; municipal or unsegregated waste or garbage; or paper that is commonly recycled.

(2) "Electric services company," "electric utility," and "net metering system" have the same meanings as in section 4928.01 of the Revised Code.

(3) "Renewable energy" means energy from biomass that is available on a renewable basis; geothermal energy; energy produced by a photovoltaic technology system; wind energy; or energy from a hydroelectric facility that produces less than twenty megawatts of electricity and is certified on or after two years following the effective date of this section as a low-impact hydropower facility by the low-impact hydropower institute. "Renewable energy" excludes nuclear energy and energy produced from coal, natural gas, oil, propane, or any other fossil fuel.

(4) "Renewable energy system" means any of the following:

(a) A photovoltaic technology system;

(b) A facility or energy system that uses renewable energy to generate electricity and transmits or distributes that electricity through either of the following:

(i) A power line that is dedicated to the transmission or distribution of electricity generated from renewable energy only and is connected to a facility or system owned, operated, or controlled by an electric light company;

(ii) A power line that is shared with not more than one facility or energy system generating electricity from nonrenewable energy and is connected to a facility or system owned, operated, or controlled by an electric light company.

(c) A net metering system that has renewable energy as its primary energy source.

(B)(1) Any electric utility that provides retail electric generation service in this state and any electric services company that provides such service shall derive at least a portion of its electricity supply from renewable energy sources as provided in divisions (B)(2) and (3) of this section.

(2) The utility or company shall comply with division (B)(1) of this section by doing one or more of the following:

(a) Acquiring its electricity supply from one or more renewable energy systems located in this state;

(b) Reducing the energy consumption of any retail electric customer in this state by subsidizing all or part of the acquisition or installation of one or more photovoltaic technology systems in any residence of the customer that is located in this state. In any such instance, the utility or company may count toward its compliance in each pertinent calendar year specified in division (B)(3) of this section any reduction in the number of kilowatt hours of electricity that it sells the customer in that calendar year, compared to the number of kilowatt hours it sold the customer in the calendar year prior to installation.

(c) Connecting to any net metering system located in this state that has renewable energy as its primary energy source. In any such instance, the utility or company may count toward its compliance all of the electricity generated in the pertinent calendar year by the net metering system.

(d) Using one or more, or a portion of any, renewable energy credits that it has purchased at a negotiated price or has earned or otherwise acquired, to the extent such credits are available pursuant to division (C) of this section.

(3)(a) The minimum amount of its electricity supply that a utility or company shall derive from renewable energy sources pursuant to division (B)(1) of this section shall be the following calendar year percentages of the utility's or company's total retail electric sales in this state:

(b) For the purpose of division (B)(3)(a) of this section, a utility's or company's total retail electric sales for a calendar year shall be determined by calculating, in kilowatt hours, the average of its retail electric sales in this state during each of the immediately preceding three calendar years.

(c) For calendar year 2009, all of the calendar year percentage specified in division (B)(3)(a) of this section shall be derived from one or more new sources specified in division (B)(2) of this section. For subsequent calendar years through calendar year 2023, at minimum the entire calendar year's percentage increase from the prior calendar year shall be derived from one or more such new sources. For the purpose of division (B)(3)(c) of this section, a renewable energy system under division (B)(2)(a) or net metering system under division (B)(2)(c) of this section is a new source if the system is first connected in the calendar year to a facility or system owned, operated, or controlled by an electric utility; a subsidy under division (B)(2)(b) of this section is a new source if it is paid out by the electric utility or electric services company in that year; and a renewable energy credit under division (B)(2)(d) of this section is a new source if it is acquired by the electric utility or electric services company in that year.

(C) The public utilities commission may establish by rule a system of renewable energy credits in accordance with this section. Any such rules shall specify the amount and allowable uses of a credit and may specify the requirements and procedures for the sale of a credit.

(D) The commission shall adopt rules requiring the filing of an annual report by each electric utility and electric services company that is subject to division (B) of this section, and may adopt such other rules as it considers necessary to promote renewable energy usage in this state by defining the duty established in that division with regard to available technologies or to ensure compliance with that division, including rules requiring the filing of additional reports. The annual report shall contain such information as the commission shall require relating to the utility's or company's compliance with division (B) of this section, and shall be in such form and filed at such time after the applicable calendar year as the commission shall prescribe. The rules may authorize the annual report to be included within the annual report filed pursuant to division (F) of section 4928.06 of the Revised Code.

(E) The commission has jurisdiction under section 4905.26 of the Revised Code, upon complaint of any person or upon complaint or initiative of the commission, to determine whether an electric utility or electric services company has failed to comply with any provision of division (B) of this section as to the amount of renewable energy required to be provided or the source of energy provided. As an exclusive remedy for such noncompliance notwithstanding any provision of law to the contrary, the commission, after reasonable notice and opportunity for hearing under section 4905.26 of the Revised Code, and upon a finding by the commission that the utility or company has failed to so comply, may assess a forfeiture against the utility or company. The forfeiture shall be in an amount that the commission considers just and reasonable to ensure the utility's or company's compliance with division (B) of this section, considering also the gravity of the noncompliance that is the subject of the proceeding, the utility's or company's prior history of noncompliance, and its good faith efforts to comply, including, as applicable, to verify the source of its supply.