To amend sections 717.25, 1710.061, 3706.25, 4905.31, 4928.01, 4928.143, 4928.20, 4928.61, 4928.65, 5501.311, and 5727.75; to amend section 4928.64 and to recodify it by subdividing it into sections 4928.641, 4928.642, 4928.643, 4928.644, 4928.645, 4928.646, 4928.647, 4928.648, and 4928.649; to amend section 4928.66 and to recodify it by subdividing it into sections 4928.661, 4928.662, 4928.665, 4928.666, 4928.667, 4928.668, 4928.6625, 4928.6626, 4928.6627, 4928.6650, 4928.6651, 4928.6655, 4928.6656, 4928.6657, and 4928.6658; to enact new section 4928.66 and sections 4928.6410, 4928.6610, 4928.6611, 4928.6612, 4928.6613, 4928.6615, 4928.6616, 4928.6617, 4928.6618, 4928.6619, 4928.6620, 4928.6621, 4928.6622, 4928.6623, 4928.6630, 4928.6631, 4928.6632, 4928.6633, 4928.6634, 4928.6635, 4928.6636, 4928.6640, 4928.6641, 4928.6642, 4928.6645, 4928.6646, 4928.6647, 4928.6659, and 4928.6660 of the Revised Code to modify the alternative energy resource, energy efficiency, and peak demand reduction law.

Section 1. That sections 717.25, 1710.061, 3706.25, 4905.31, 4928.01, 4928.143, 4928.20, 4928.61, 4928.65, 5501.311, and 5727.75 be amended; section 4928.64 be amended and recodified by subdividing it into sections 4928.641, 4928.642, 4928.643, 4928.644, 4928.645, 4928.646, 4928.647, 4928.648, and 4928.649; section 4928.66 be amended and recodified by subdividing it into sections 4928.661, 4928.662, 4928.665, 4928.666, 4928.667, 4928.668, 4928.6625, 4928.6626, 4928.6627, 4928.6650, 4928.6651, 4928.6655, 4928.6656, 4928.6657, and 4928.6658; that new section 4928.66 and sections 4928.6410, 4928.6610, 4928.6611, 4928.6612, 4928.6613, 4928.6615, 4928.6616, 4928.6617, 4928.6618, 4928.6619, 4928.6620, 4928.6621, 4928.6622, 4928.6623, 4928.6630, 4928.6631, 4928.6632, 4928.6633, 4928.6634, 4928.6635, 4928.6636, 4928.6640, 4928.6641, 4928.6642, 4928.6645, 4928.6646, 4928.6647, 4928.6659, and 4928.6660 of the Revised Code be enacted to read as follows:

Sec. 717.25. (A) As used in this section:

(1) "Customer-generated energy project" means a wind, biomass, or gasification facility for the generation of electricity that meets either of the following requirements:

(a) The facility is designed to have a generating capacity of two hundred fifty kilowatts of electricity or less.

(b) The facility is:

(i) Designed to have a generating capacity of more than two hundred fifty kilowatts of electricity;

(ii) Operated in parallel with electric transmission and distribution facilities serving the real property at the site of the customer-generated energy project;

(iii) Intended primarily to offset part or all of the facility owner's requirements for electricity at the site of the customer-generated energy project and is located on the facility owner's real property; and

(iv) Not producing energy for direct sale by the facility owner to the public.

(2) "Electric distribution utility" and "mercantile customer" have the same meanings as in section 4928.01 of the Revised Code.

(3) "Reduction in demand" has the same meaning as in section 1710.01 of the Revised Code.

(B) The legislative authority of a municipal corporation may establish a low-cost alternative energy revolving loan program to assist owners of real property within the municipal corporation with installing and implementing either of the following on their real property:

(1) Alternative energy technologies limited to solar photovoltaic projects, solar thermal energy projects, geothermal energy projects, and customer-generated energy projects;

(2) Energy efficiency technologies, products, and activities that reduce or support the reduction of energy consumption, allow for the reduction in demand, or support the production of clean, renewable energy.

(C) If the legislative authority decides to establish such a program, the legislative authority shall adopt an ordinance that provides for the following:

(1) Creation in the municipal treasury of an alternative energy revolving loan fund;

(2) A source of money, such as gifts, bond issues, real property assessments, or federal subsidies, to seed the alternative energy revolving loan fund;

(3) Facilities for making loans from the alternative energy revolving loan fund, including an explanation of how owners of real property within the municipal corporation may qualify for loans from the fund, a description of the alternative energy and energy efficiency technologies and related equipment for which a loan can be made from the fund, authorization of a municipal agency to process applications for loans and otherwise to administer the low-cost alternative energy revolving loan program, a procedure whereby loans can be applied for, criteria for reviewing and accepting or denying applications for loans, criteria for determining the appropriate amount of a loan, the interest rate to be charged, the repayment schedule, and other terms and conditions of a loan, and procedures for collecting loans that are not repaid according to the repayment schedule;

(4) A specification that repayments of loans from the alternative energy revolving loan fund may be made in installments and, at the option of the real property owner repaying the loan, the installments may be paid and collected as if they were special assessments paid and collected in the manner specified in Chapter 727. of the Revised Code and as specified in the ordinance;

(5) A specification that repayments of loans from the alternative energy revolving loan fund are to be credited to the fund, that the money in the fund is to be invested pending its being lent out, and that investment earnings on the money in the fund are to be credited to the fund; and

(6) Other matters necessary and proper for efficient operation of the low-cost alternative energy revolving loan program as a means of encouraging use of alternative energy and energy efficiency technologies.

The interest rate charged on a loan from the alternative energy revolving loan fund shall be below prevailing market rates. The legislative authority may specify the interest rate in the ordinance or may, after establishing a standard in the ordinance whereby the interest rate can be specified, delegate authority to specify the interest rate to the administrator of loans from the alternative energy revolving loan fund.

The alternative energy revolving loan fund shall be seeded with sufficient money to enable loans to be made until the fund accumulates sufficient reserves through investment and repayment of loans for revolving operation.

(D) Except as provided in division (E) of this section, an electric distribution utility may count toward its compliance with the energy efficiency and peak demand reduction requirements of section sections 4928.66 to 4928.6660 of the Revised Code any energy efficiency savings or any reduction in demand that is produced by projects utilizing alternative energy technologies or energy efficiency technologies, products, and activities that are located in its certified territory and for which a loan has been made under this section.

(E) A mercantile customer that realizes energy efficiency savings or reduction in demand produced by alternative energy technologies or energy efficiency technologies, products, or activities that it owns and for which a loan has been made under this section may elect to commit the savings or reduction to the electric distribution utility in exchange for an exemption from an energy efficiency cost recovery mechanism permitted under section sections 4928.66 to 4928.6660 of the Revised Code, approved by the public utilities commission.

(F) The legislative authority shall submit a quarterly report to the electric distribution utility that includes, but is not limited to, both of the following:

(1) The number and a description of each new and ongoing project utilizing alternative energy technologies or energy efficiency technologies, products, or activities located in the utility's certified territory that produces energy efficiency savings or reduction in demand and for which a loan has been made under this section;

(2) Any additional information that the electric distribution utility needs in order to obtain credit under section sections 4928.66 to 4928.6660 of the Revised Code for energy efficiency savings or reduction in demand from such projects.

Sec. 1710.061.  (A) Except as provided in division (B) of this section, an electric distribution utility may count toward its compliance with the energy efficiency and peak demand reduction requirements of section sections 4928.66 to 4928.6660 of the Revised Code any efficiency savings or reduction in demand produced by a special energy improvement project located in its certified territory.

(B) A mercantile customer that realizes energy efficiency savings or reduction in demand produced by a special energy improvement project that it owns may elect to commit the savings or reduction to the electric distribution utility in exchange for an exemption from an energy efficiency cost recovery mechanism permitted under section sections 4928.66 to 4928.6660 of the Revised Code, approved by the public utilities commission.

(C) The board of directors of a special improvement district shall submit a quarterly report to the electric distribution utility that includes, but is not limited to, both of the following:

(1) The total number and a description of each new and ongoing special energy improvement project located within the special improvement district that produces energy efficiency savings or reduction in demand;

(2) Any additional information that the electric distribution utility needs in order to obtain credit under section sections 4928.66 to 4928.6660 of the Revised Code for energy efficiency savings or reduction in demand from such projects.

Sec. 3706.25. As used in sections 3706.25 to 3706.30 of the Revised Code:

(A) "Advanced energy project" means any technologies, products, activities, or management practices or strategies that facilitate the generation or use of electricity or any type of energy and that reduce or support the reduction of energy consumption or support the production of clean, renewable energy for industrial, distribution, commercial, institutional, governmental, research, not-for-profit, or residential energy users including, but not limited to, advanced energy resources and renewable energy resources. "Advanced energy project" includes any project described in division (A), (B), or (C) of section 4928.621 of the Revised Code.

(B) "Advanced energy resource" means any of the following:

(1) Any method or any modification or replacement of any property, process, device, structure, or equipment that increases the generation output of an electric generating facility to the extent such efficiency is achieved without additional carbon dioxide emissions by that facility;

(2) Any distributed generation system consisting of customer cogeneration technology, primarily to meet the energy needs of the customer's facilities;

(3) Advanced nuclear energy technology consisting of generation III technology as defined by the nuclear regulatory commission; other, later technology; or significant improvements to existing facilities;

(4) Any fuel cell used in the generation of electricity, including, but not limited to, a proton exchange membrane fuel cell, phosphoric acid fuel cell, molten carbonate fuel cell, or solid oxide fuel cell;

(5) Advanced solid waste or construction and demolition debris conversion technology, including, but not limited to, advanced stoker technology, and advanced fluidized bed gasification technology, that results in measurable greenhouse gas emissions reductions as calculated pursuant to the United States environmental protection agency's waste reduction model (WARM).

(C) "Air contaminant source" has the same meaning as in section 3704.01 of the Revised Code.

(D) "Cogeneration technology" means technology that produces electricity and useful thermal output simultaneously.

(E) "Renewable energy resource" means solar photovoltaic or solar thermal energy, regardless of whether electricity is produced, wind energy, power produced by a hydroelectric facility, geothermal energy, regardless of whether electricity is produced, fuel derived from solid wastes, as defined in section 3734.01 of the Revised Code, through fractionation, biological decomposition, or other process that does not principally involve combustion, biomass energy, energy produced by cogeneration technology that is placed into service on or before December 31, 2015, and for which more than ninety per cent of the total annual energy input is from combustion of a waste or byproduct gas from an air contaminant source in this state, which source has been in operation since on or before January 1, 1985, provided that the cogeneration technology is a part of a facility located in a county having a population of more than three hundred sixty-five thousand but less than three hundred seventy thousand according to the most recent federal decennial census, biologically derived methane gas, or energy derived from nontreated by-products of the pulping process or wood manufacturing process, including bark, wood chips, sawdust, and lignin in spent pulping liquors. "Renewable energy resource" includes, but is not limited to, any energy derived from a fuel cell used in the generation of electricity, including, but not limited to, a proton exchange membrane fuel cell, phosphoric acid fuel cell, molten carbonate fuel cell, or solid oxide fuel cell; wind turbine located in the state's territorial waters of Lake Erie; methane gas emitted from an abandoned coal mine; storage facility that will promote the better utilization of a renewable energy resource that primarily generates off peak; or distributed generation system used by a customer to generate electricity from any such energy. As used in this division, "hydroelectric facility" means a hydroelectric generating facility that is located at a dam on a river, or on any water discharged to a river or lake, that is within or bordering this state or, within or bordering an adjoining state, or within the Canadian provinces of Ontario or Quebec, and meets all of the following standards:

(1) The facility provides for river flows that are not detrimental for fish, wildlife, and water quality, including seasonal flow fluctuations as defined by the applicable licensing agency for the facility.

(2) The facility demonstrates that it complies with the water quality standards of this state, which compliance may consist of certification under Section 401 of the "Clean Water Act of 1977," 91 Stat. 1598, 1599, 33 U.S.C. 1341, and demonstrates that it has not contributed to a finding by this state that the river has impaired water quality under Section 303(d) of the "Clean Water Act of 1977," 114 Stat. 870, 33 U.S.C. 1313.

(3) The facility complies with mandatory prescriptions regarding fish passage as required by the federal energy regulatory commission license issued for the project, regarding fish protection for riverine, anadromous, and catadromous fish.

(4) The facility complies with the recommendations of the Ohio environmental protection agency and with the terms of its federal energy regulatory commission license regarding watershed protection, mitigation, or enhancement, to the extent of each agency's respective jurisdiction over the facility.

(5) The facility complies with provisions of the "Endangered Species Act of 1973," 87 Stat. 884, 16 U.S.C. 1531 to 1544, as amended.

(6) The facility does not harm cultural resources of the area. This can be shown through compliance with the terms of its federal energy regulatory commission license or, if the facility is not regulated by that commission, through development of a plan approved by the Ohio historic preservation office, to the extent it has jurisdiction over the facility.

(7) The facility complies with the terms of its federal energy regulatory commission license or exemption that are related to recreational access, accommodation, and facilities or, if the facility is not regulated by that commission, the facility complies with similar requirements as are recommended by resource agencies, to the extent they have jurisdiction over the facility; and the facility provides access to water to the public without fee or charge.

(8) The facility is not recommended for removal by any federal agency or agency of any state, to the extent the particular agency has jurisdiction over the facility.

Sec. 4905.31.  Chapters 4901., 4903., 4905., 4907., 4909., 4921., 4923., 4927., 4928., and 4929. of the Revised Code do not prohibit a public utility from filing a schedule or establishing or entering into any reasonable arrangement with another public utility or with one or more of its customers, consumers, or employees, and do not prohibit a mercantile customer of an electric distribution utility as those terms are defined in section 4928.01 of the Revised Code or a group of those customers from establishing a reasonable arrangement with that utility or another public utility electric light company, providing for any of the following:

(A) The division or distribution of its surplus profits;

(B) A sliding scale of charges, including variations in rates based upon stipulated variations in cost as provided in the schedule or arrangement.

(C) A minimum charge for service to be rendered unless such minimum charge is made or prohibited by the terms of the franchise, grant, or ordinance under which such public utility is operated;

(D) A classification of service based upon the quantity used, the time when used, the purpose for which used, the duration of use, and any other reasonable consideration;

(E) Any other financial device that may be practicable or advantageous to the parties interested. In the case of a schedule or arrangement concerning a public utility electric light company, such other financial device may include a device to recover costs incurred in conjunction with any economic development and job retention program of the utility within its certified territory, including recovery of revenue foregone as a result of any such program; any development and implementation of peak demand reduction and energy efficiency programs under section sections 4928.66 to 4928.6660 of the Revised Code; any acquisition and deployment of advanced metering, including the costs of any meters prematurely retired as a result of the advanced metering implementation; and compliance with any government mandate.

No such schedule or arrangement is lawful unless it is filed with and approved by the commission pursuant to an application that is submitted by the public utility or the mercantile customer or group of mercantile customers of an electric distribution utility and is posted on the commission's docketing information system and is accessible through the internet.

Every such public utility is required to conform its schedules of rates, tolls, and charges to such arrangement, sliding scale, classification, or other device, and where variable rates are provided for in any such schedule or arrangement, the cost data or factors upon which such rates are based and fixed shall be filed with the commission in such form and at such times as the commission directs.

Every such schedule or reasonable arrangement shall be under the supervision and regulation of the commission, and is subject to change, alteration, or modification by the commission.

Sec. 4928.01.  (A) As used in this chapter:

(1) "Ancillary service" means any function necessary to the provision of electric transmission or distribution service to a retail customer and includes, but is not limited to, scheduling, system control, and dispatch services; reactive supply from generation resources and voltage control service; reactive supply from transmission resources service; regulation service; frequency response service; energy imbalance service; operating reserve-spinning reserve service; operating reserve-supplemental reserve service; load following; back-up supply service; real-power loss replacement service; dynamic scheduling; system black start capability; and network stability service.

(2) "Billing and collection agent" means a fully independent agent, not affiliated with or otherwise controlled by an electric utility, electric services company, electric cooperative, or governmental aggregator subject to certification under section 4928.08 of the Revised Code, to the extent that the agent is under contract with such utility, company, cooperative, or aggregator solely to provide billing and collection for retail electric service on behalf of the utility company, cooperative, or aggregator.

(3) "Certified territory" means the certified territory established for an electric supplier under sections 4933.81 to 4933.90 of the Revised Code.

(4) "Competitive retail electric service" means a component of retail electric service that is competitive as provided under division (B) of this section.

(5) "Electric cooperative" means a not-for-profit electric light company that both is or has been financed in whole or in part under the "Rural Electrification Act of 1936," 49 Stat. 1363, 7 U.S.C. 901, and owns or operates facilities in this state to generate, transmit, or distribute electricity, or a not-for-profit successor of such company.

(6) "Electric distribution utility" means an electric utility that supplies at least retail electric distribution service.

(7) "Electric light company" has the same meaning as in section 4905.03 of the Revised Code and includes an electric services company, but excludes any self-generator to the extent that it consumes electricity it so produces, sells that electricity for resale, or obtains electricity from a generating facility it hosts on its premises.

(8) "Electric load center" has the same meaning as in section 4933.81 of the Revised Code.

(9) "Electric services company" means an electric light company that is engaged on a for-profit or not-for-profit basis in the business of supplying or arranging for the supply of only a competitive retail electric service in this state. "Electric services company" includes a power marketer, power broker, aggregator, or independent power producer but excludes an electric cooperative, municipal electric utility, governmental aggregator, or billing and collection agent.

(10) "Electric supplier" has the same meaning as in section 4933.81 of the Revised Code.

(11) "Electric utility" means an electric light company that has a certified territory and is engaged on a for-profit basis either in the business of supplying a noncompetitive retail electric service in this state or in the businesses of supplying both a noncompetitive and a competitive retail electric service in this state. "Electric utility" excludes a municipal electric utility or a billing and collection agent.

(12) "Firm electric service" means electric service other than nonfirm electric service.

(13) "Governmental aggregator" means a legislative authority of a municipal corporation, a board of township trustees, or a board of county commissioners acting as an aggregator for the provision of a competitive retail electric service under authority conferred under section 4928.20 of the Revised Code.

(14) A person acts "knowingly," regardless of the person's purpose, when the person is aware that the person's conduct will probably cause a certain result or will probably be of a certain nature. A person has knowledge of circumstances when the person is aware that such circumstances probably exist.

(15) "Level of funding for low-income customer energy efficiency programs provided through electric utility rates" means the level of funds specifically included in an electric utility's rates on October 5, 1999, pursuant to an order of the public utilities commission issued under Chapter 4905. or 4909. of the Revised Code and in effect on October 4, 1999, for the purpose of improving the energy efficiency of housing for the utility's low-income customers. The term excludes the level of any such funds committed to a specific nonprofit organization or organizations pursuant to a stipulation or contract.

(16) "Low-income customer assistance programs" means the percentage of income payment plan program, the home energy assistance program, the home weatherization assistance program, and the targeted energy efficiency and weatherization program.

(17) "Market development period" for an electric utility means the period of time beginning on the starting date of competitive retail electric service and ending on the applicable date for that utility as specified in section 4928.40 of the Revised Code, irrespective of whether the utility applies to receive transition revenues under this chapter.

(18) "Market power" means the ability to impose on customers a sustained price for a product or service above the price that would prevail in a competitive market.

(19) "Mercantile customer" means a commercial or industrial customer if the electricity consumed is for nonresidential use and the customer consumes more than seven hundred thousand kilowatt hours per year or is part of a national account involving multiple facilities in one or more states.

(20) "Municipal electric utility" means a municipal corporation that owns or operates facilities to generate, transmit, or distribute electricity.

(21) "Noncompetitive retail electric service" means a component of retail electric service that is noncompetitive as provided under division (B) of this section.

(22) "Nonfirm electric service" means electric service provided pursuant to a schedule filed under section 4905.30 of the Revised Code or pursuant to an arrangement under section 4905.31 of the Revised Code, which schedule or arrangement includes conditions that may require the customer to curtail or interrupt electric usage during nonemergency circumstances upon notification by an electric utility.

(23) "Percentage of income payment plan arrears" means funds eligible for collection through the percentage of income payment plan rider, but uncollected as of July 1, 2000.

(24) "Person" has the same meaning as in section 1.59 of the Revised Code.

(25) "Advanced energy project" means any technologies, products, activities, or management practices or strategies that facilitate the generation or use of electricity or any type of energy and that reduce or support the reduction of energy consumption or support the production of clean, renewable energy for industrial, distribution, commercial, institutional, governmental, research, not-for-profit, or residential energy users, including, but not limited to, advanced energy resources and renewable energy resources. "Advanced energy project" also includes any project described in division (A), (B), or (C) of section 4928.621 of the Revised Code.

(26) "Regulatory assets" means the unamortized net regulatory assets that are capitalized or deferred on the regulatory books of the electric utility, pursuant to an order or practice of the public utilities commission or pursuant to generally accepted accounting principles as a result of a prior commission rate-making decision, and that would otherwise have been charged to expense as incurred or would not have been capitalized or otherwise deferred for future regulatory consideration absent commission action. "Regulatory assets" includes, but is not limited to, all deferred demand-side management costs; all deferred percentage of income payment plan arrears; post-in-service capitalized charges and assets recognized in connection with statement of financial accounting standards no. 109 (receivables from customers for income taxes); future nuclear decommissioning costs and fuel disposal costs as those costs have been determined by the commission in the electric utility's most recent rate or accounting application proceeding addressing such costs; the undepreciated costs of safety and radiation control equipment on nuclear generating plants owned or leased by an electric utility; and fuel costs currently deferred pursuant to the terms of one or more settlement agreements approved by the commission.

(27) "Retail electric service" means any service involved in supplying or arranging for the supply of electricity to ultimate consumers in this state, from the point of generation to the point of consumption. For the purposes of this chapter, retail electric service includes one or more of the following "service components": generation service, aggregation service, power marketing service, power brokerage service, transmission service, distribution service, ancillary service, metering service, and billing and collection service.

(28) "Starting date of competitive retail electric service" means January 1, 2001.

(29) "Customer-generator" means a user of a net metering system.

(30) "Net metering" means measuring the difference in an applicable billing period between the electricity supplied by an electric service provider and the electricity generated by a customer-generator that is fed back to the electric service provider.

(31) "Net metering system" means a facility for the production of electrical energy that does all of the following:

(a) Uses as its fuel either solar, wind, biomass, landfill gas, or hydropower, or uses a microturbine or a fuel cell;

(b) Is located on a customer-generator's premises;

(c) Operates in parallel with the electric utility's transmission and distribution facilities;

(d) Is intended primarily to offset part or all of the customer-generator's requirements for electricity.

(32) "Self-generator" means an entity in this state that owns or hosts on its premises an electric generation facility that produces electricity primarily for the owner's consumption and that may provide any such excess electricity to another entity, whether the facility is installed or operated by the owner or by an agent under a contract.

(33) "Rate plan" means the standard service offer in effect on the effective date of the amendment of this section by S.B. 221 of the 127th general assembly, July 31, 2008.

(34) "Advanced energy resource" means any of the following:

(a) Any method or any modification or replacement of any property, process, device, structure, or equipment that increases the one of the following:

(i) The generation output of an electric generating facility to the extent such efficiency is achieved without additional carbon dioxide emissions by that facility;

(ii) The rated capacity of a transmission or distribution line;

(b) Any distributed generation system consisting of customer cogeneration technology;

(c) Clean coal technology that includes a carbon-based product that is chemically altered before combustion to demonstrate a reduction, as expressed as ash, in emissions of nitrous oxide, mercury, arsenic, chlorine, sulfur dioxide, or sulfur trioxide in accordance with the American society of testing and materials standard D1757A or a reduction of metal oxide emissions in accordance with standard D5142 of that society, or clean coal technology that includes the design capability to control or prevent the emission of carbon dioxide, which design capability the commission shall adopt by rule and shall be based on economically feasible best available technology or, in the absence of a determined best available technology, shall be of the highest level of economically feasible design capability for which there exists generally accepted scientific opinion;

(d) Advanced nuclear energy technology consisting of generation III technology as defined by the nuclear regulatory commission; other, later technology; or significant improvements to existing facilities;

(e) Any fuel cell used in the generation of electricity, including, but not limited to, a proton exchange membrane fuel cell, phosphoric acid fuel cell, molten carbonate fuel cell, or solid oxide fuel cell;

(f) Advanced solid waste or construction and demolition debris conversion technology, including, but not limited to, advanced stoker technology, and advanced fluidized bed gasification technology, that results in measurable greenhouse gas emissions reductions as calculated pursuant to the United States environmental protection agency's waste reduction model (WARM);

(g) Demand-side management and any energy efficiency improvement;

(h) Any new, retrofitted, refueled, or repowered generating facility located in Ohio, including a simple or combined-cycle natural gas generating facility or a generating facility that uses biomass, coal, modular nuclear, or any other fuel as its input;

(i) Any uprated capacity of an existing electric generating facility if the uprated capacity results from the deployment of advanced technology.;

"Advanced energy resource" does not include a waste energy recovery system that is, or has been, included in an energy efficiency program of an electric distribution utility pursuant to requirements under section 4928.66 of the Revised Code (j) Any mercantile customer or supplier method or any modification or replacement of any property, process, device, structure, or equipment that reduces the energy intensity of any water supply function or water treatment function.

(35) "Air contaminant source" has the same meaning as in section 3704.01 of the Revised Code.

(36) "Cogeneration technology" means technology that produces electricity and useful thermal output simultaneously.

(37)(a) "Renewable energy resource" means any of the following:

(i) Solar photovoltaic or solar thermal energy, regardless of whether electricity is produced;

(ii) Wind energy;

(iii) Power produced by a hydroelectric facility;

(iv) Geothermal energy, regardless of whether electricity is produced;

(v) Fuel derived from solid wastes, as defined in section 3734.01 of the Revised Code, through fractionation, biological decomposition, or other process that does not principally involve combustion;

(vi) Biomass energy;

(vii) Energy produced by cogeneration technology that is placed into service on or before December 31, 2015, and for which more than ninety per cent of the total annual energy input is from combustion of a waste or byproduct gas from an air contaminant source in this state, which source has been in operation since on or before January 1, 1985, provided that the cogeneration technology is a part of a facility located in a county having a population of more than three hundred sixty-five thousand but less than three hundred seventy thousand according to the most recent federal decennial census;

(viii) Biologically derived methane gas;

(ix) Energy derived from nontreated by-products of the pulping process or wood manufacturing process, including bark, wood chips, sawdust, and lignin in spent pulping liquors.

"Renewable energy resource" includes, but is not limited to, any energy derived from a fuel cell used in the generation of electricity, including, but not limited to, a proton exchange membrane fuel cell, phosphoric acid fuel cell, molten carbonate fuel cell, or solid oxide fuel cell; wind turbine located in the state's territorial waters of Lake Erie; methane gas emitted from an abandoned coal mine; waste energy recovery system placed into service or retrofitted on or after the effective date of the amendment of this section by S.B. 315 of the 129th general assembly, September 10, 2012, except that a waste energy recovery system described in division (A)(38)(b) of this section may be included only if it was placed into service between January 1, 2002, and December 31, 2004; storage facility that will promote the better utilization of a renewable energy resource; or distributed generation system used by a customer to generate electricity from any such energy.

"Renewable energy resource" does not include a waste energy recovery system that is, or was, on or after January 1, 2012, included in an energy efficiency program of an electric distribution utility pursuant to requirements under section sections 4928.66 to 4928.6660 of the Revised Code.

(b) As used in division (A)(37) of this section, "hydroelectric facility" means a hydroelectric generating facility that is located at a dam on a river, or on any water discharged to a river or lake, that is within or bordering this state or, within or bordering an adjoining state, or within the Canadian provinces of Ontario or Quebec, and meets all of the following standards:

(i) The facility provides for river flows that are not detrimental for fish, wildlife, and water quality, including seasonal flow fluctuations as defined by the applicable licensing agency for the facility.

(ii) The facility demonstrates that it complies with the water quality standards of this state, which compliance may consist of certification under Section 401 of the "Clean Water Act of 1977," 91 Stat. 1598, 1599, 33 U.S.C. 1341, and demonstrates that it has not contributed to a finding by this state that the river has impaired water quality under Section 303(d) of the "Clean Water Act of 1977," 114 Stat. 870, 33 U.S.C. 1313.

(iii) The facility complies with mandatory prescriptions regarding fish passage as required by the federal energy regulatory commission license issued for the project, regarding fish protection for riverine, anadromous, and catadromous fish.

(iv) The facility complies with the recommendations of the Ohio environmental protection agency and with the terms of its federal energy regulatory commission license regarding watershed protection, mitigation, or enhancement, to the extent of each agency's respective jurisdiction over the facility.

(v) The facility complies with provisions of the "Endangered Species Act of 1973," 87 Stat. 884, 16 U.S.C. 1531 to 1544, as amended.

(vi) The facility does not harm cultural resources of the area. This can be shown through compliance with the terms of its federal energy regulatory commission license or, if the facility is not regulated by that commission, through development of a plan approved by the Ohio historic preservation office, to the extent it has jurisdiction over the facility.

(vii) The facility complies with the terms of its federal energy regulatory commission license or exemption that are related to recreational access, accommodation, and facilities or, if the facility is not regulated by that commission, the facility complies with similar requirements as are recommended by resource agencies, to the extent they have jurisdiction over the facility; and the facility provides access to water to the public without fee or charge.

(viii) The facility is not recommended for removal by any federal agency or agency of any state, to the extent the particular agency has jurisdiction over the facility.

(38) "Waste energy recovery system" means either of the following:

(a) A facility that generates electricity through the conversion of energy from either of the following:

(i) Exhaust heat from engines or manufacturing, industrial, commercial, or institutional sites, except for exhaust heat from a facility whose primary purpose is the generation of electricity;

(ii) Reduction of pressure in gas pipelines before gas is distributed through the pipeline, provided that the conversion of energy to electricity is achieved without using additional fossil fuels.

(b) A facility at a state institution of higher education as defined in section 3345.011 of the Revised Code that recovers waste heat from electricity-producing engines or combustion turbines and that simultaneously uses the recovered heat to produce steam, provided that the facility was placed into service between January 1, 2002, and December 31, 2004.

(39) "Smart grid" means capital improvements to an electric distribution utility's distribution infrastructure that improve reliability, efficiency, resiliency, or reduce energy demand or use, including, but not limited to, advanced metering and automation of system functions.

(40) "Combined heat and power system" means the coproduction of electricity and useful thermal energy from the same fuel source designed to achieve thermal-efficiency levels of at least sixty per cent, with at least twenty per cent of the system's total useful energy in the form of thermal energy.

(41) "Water supply function" means the functions associated with the following:

(a) Raw water collection, purification, treatment, and storage;

(b) Establishing or maintaining pressure to balance water supply and demand;

(c) Water delivery and transfer.

(42) "Water treatment function" means any of the preliminary, secondary, tertiary, and advanced activities, whether physical, biological, or chemical, associated with the removal of contaminants from, or conditioning of, wastewater prior to its return to the environment or recycled use;

(43) "Energy intensity" means the amount of energy used to produce a certain level of output or activity, measured by the quantity of energy needed to perform a particular activity, expressed as energy per unit of output, energy per unit of gross total floor space, or an activity measure of service.

(B) For the purposes of this chapter, a retail electric service component shall be deemed a competitive retail electric service if the service component is competitive pursuant to a declaration by a provision of the Revised Code or pursuant to an order of the public utilities commission authorized under division (A) of section 4928.04 of the Revised Code. Otherwise, the service component shall be deemed a noncompetitive retail electric service.

Sec. 4928.143. (A) For the purpose of complying with section 4928.141 of the Revised Code, an electric distribution utility may file an application for public utilities commission approval of an electric security plan as prescribed under division (B) of this section. The utility may file that application prior to the effective date of any rules the commission may adopt for the purpose of this section, and, as the commission determines necessary, the utility immediately shall conform its filing to those rules upon their taking effect.

(B) Notwithstanding any other provision of Title XLIX of the Revised Code to the contrary except division (D) of this section, divisions (I), (J), and (K) of section 4928.20, division (E) of section 4928.64 4928.649, and section 4928.69 of the Revised Code:

(1) An electric security plan shall include provisions relating to the supply and pricing of electric generation service. In addition, if the proposed electric security plan has a term longer than three years, it may include provisions in the plan to permit the commission to test the plan pursuant to division (E) of this section and any transitional conditions that should be adopted by the commission if the commission terminates the plan as authorized under that division.

(2) The plan may provide for or include, without limitation, any of the following:

(a) Automatic recovery of any of the following costs of the electric distribution utility, provided the cost is prudently incurred: the cost of fuel used to generate the electricity supplied under the offer; the cost of purchased power supplied under the offer, including the cost of energy and capacity, and including purchased power acquired from an affiliate; the cost of emission allowances; and the cost of federally mandated carbon or energy taxes;

(b) A reasonable allowance for construction work in progress for any of the electric distribution utility's cost of constructing an electric generating facility or for an environmental expenditure for any electric generating facility of the electric distribution utility, provided the cost is incurred or the expenditure occurs on or after January 1, 2009. Any such allowance shall be subject to the construction work in progress allowance limitations of division (A) of section 4909.15 of the Revised Code, except that the commission may authorize such an allowance upon the incurrence of the cost or occurrence of the expenditure. No such allowance for generating facility construction shall be authorized, however, unless the commission first determines in the proceeding that there is need for the facility based on resource planning projections submitted by the electric distribution utility. Further, no such allowance shall be authorized unless the facility's construction was sourced through a competitive bid process, regarding which process the commission may adopt rules. An allowance approved under division (B)(2)(b) of this section shall be established as a nonbypassable surcharge for the life of the facility.

(c) The establishment of a nonbypassable surcharge for the life of an electric generating facility that is owned or operated by the electric distribution utility, was sourced through a competitive bid process subject to any such rules as the commission adopts under division (B)(2)(b) of this section, and is newly used and useful on or after January 1, 2009, which surcharge shall cover all costs of the utility specified in the application, excluding costs recovered through a surcharge under division (B)(2)(b) of this section. However, no surcharge shall be authorized unless the commission first determines in the proceeding that there is need for the facility based on resource planning projections submitted by the electric distribution utility. Additionally, if a surcharge is authorized for a facility pursuant to plan approval under division (C) of this section and as a condition of the continuation of the surcharge, the electric distribution utility shall dedicate to Ohio consumers the capacity and energy and the rate associated with the cost of that facility. Before the commission authorizes any surcharge pursuant to this division, it may consider, as applicable, the effects of any decommissioning, deratings, and retirements.

(d) Terms, conditions, or charges relating to limitations on customer shopping for retail electric generation service, bypassability, standby, back-up, or supplemental power service, default service, carrying costs, amortization periods, and accounting or deferrals, including future recovery of such deferrals, as would have the effect of stabilizing or providing certainty regarding retail electric service;

(e) Automatic increases or decreases in any component of the standard service offer price;

(f) Consistent with sections 4928.23 to 4928.2318 of the Revised Code, both of the following:

(i) Provisions for the electric distribution utility to securitize any phase-in, inclusive of carrying charges, of the utility's standard service offer price, which phase-in is authorized in accordance with section 4928.144 of the Revised Code;

(ii) Provisions for the recovery of the utility's cost of securitization.

(g) Provisions relating to transmission, ancillary, congestion, or any related service required for the standard service offer, including provisions for the recovery of any cost of such service that the electric distribution utility incurs on or after that date pursuant to the standard service offer;

(h) Provisions regarding the utility's distribution service, including, without limitation and notwithstanding any provision of Title XLIX of the Revised Code to the contrary, provisions regarding single issue ratemaking, a revenue decoupling mechanism or any other incentive ratemaking, and provisions regarding distribution infrastructure and modernization incentives for the electric distribution utility. The latter may include a long-term energy delivery infrastructure modernization plan for that utility or any plan providing for the utility's recovery of costs, including lost revenue, shared savings, and avoided costs, and a just and reasonable rate of return on such infrastructure modernization. As part of its determination as to whether to allow in an electric distribution utility's electric security plan inclusion of any provision described in division (B)(2)(h) of this section, the commission shall examine the reliability of the electric distribution utility's distribution system and ensure that customers' and the electric distribution utility's expectations are aligned and that the electric distribution utility is placing sufficient emphasis on and dedicating sufficient resources to the reliability of its distribution system.

(i) Provisions under which the electric distribution utility may implement economic development, job retention, and energy efficiency programs, which provisions may allocate program costs across all classes of customers of the utility and those of electric distribution utilities in the same holding company system.

(C)(1) The burden of proof in the proceeding shall be on the electric distribution utility. The commission shall issue an order under this division for an initial application under this section not later than one hundred fifty days after the application's filing date and, for any subsequent application by the utility under this section, not later than two hundred seventy-five days after the application's filing date. Subject to division (D) of this section, the commission by order shall approve or modify and approve an application filed under division (A) of this section if it finds that the electric security plan so approved, including its pricing and all other terms and conditions, including any deferrals and any future recovery of deferrals, is more favorable in the aggregate as compared to the expected results that would otherwise apply under section 4928.142 of the Revised Code. Additionally, if the commission so approves an application that contains a surcharge under division (B)(2)(b) or (c) of this section, the commission shall ensure that the benefits derived for any purpose for which the surcharge is established are reserved and made available to those that bear the surcharge. Otherwise, the commission by order shall disapprove the application.

(2)(a) If the commission modifies and approves an application under division (C)(1) of this section, the electric distribution utility may withdraw the application, thereby terminating it, and may file a new standard service offer under this section or a standard service offer under section 4928.142 of the Revised Code.

(b) If the utility terminates an application pursuant to division (C)(2)(a) of this section or if the commission disapproves an application under division (C)(1) of this section, the commission shall issue such order as is necessary to continue the provisions, terms, and conditions of the utility's most recent standard service offer, along with any expected increases or decreases in fuel costs from those contained in that offer, until a subsequent offer is authorized pursuant to this section or section 4928.142 of the Revised Code, respectively.

(D) Regarding the rate plan requirement of division (A) of section 4928.141 of the Revised Code, if an electric distribution utility that has a rate plan that extends beyond December 31, 2008, files an application under this section for the purpose of its compliance with division (A) of section 4928.141 of the Revised Code, that rate plan and its terms and conditions are hereby incorporated into its proposed electric security plan and shall continue in effect until the date scheduled under the rate plan for its expiration, and that portion of the electric security plan shall not be subject to commission approval or disapproval under division (C) of this section, and the earnings test provided for in division (F) of this section shall not apply until after the expiration of the rate plan. However, that utility may include in its electric security plan under this section, and the commission may approve, modify and approve, or disapprove subject to division (C) of this section, provisions for the incremental recovery or the deferral of any costs that are not being recovered under the rate plan and that the utility incurs during that continuation period to comply with section 4928.141, division (B) of section 4928.64 4928.641, or division (A) of section sections 4928.66 to 4928.6660 of the Revised Code.

(E) If an electric security plan approved under division (C) of this section, except one withdrawn by the utility as authorized under that division, has a term, exclusive of phase-ins or deferrals, that exceeds three years from the effective date of the plan, the commission shall test the plan in the fourth year, and if applicable, every fourth year thereafter, to determine whether the plan, including its then-existing pricing and all other terms and conditions, including any deferrals and any future recovery of deferrals, continues to be more favorable in the aggregate and during the remaining term of the plan as compared to the expected results that would otherwise apply under section 4928.142 of the Revised Code. The commission shall also determine the prospective effect of the electric security plan to determine if that effect is substantially likely to provide the electric distribution utility with a return on common equity that is significantly in excess of the return on common equity that is likely to be earned by publicly traded companies, including utilities, that face comparable business and financial risk, with such adjustments for capital structure as may be appropriate. The burden of proof for demonstrating that significantly excessive earnings will not occur shall be on the electric distribution utility. If the test results are in the negative or the commission finds that continuation of the electric security plan will result in a return on equity that is significantly in excess of the return on common equity that is likely to be earned by publicly traded companies, including utilities, that will face comparable business and financial risk, with such adjustments for capital structure as may be appropriate, during the balance of the plan, the commission may terminate the electric security plan, but not until it shall have provided interested parties with notice and an opportunity to be heard. The commission may impose such conditions on the plan's termination as it considers reasonable and necessary to accommodate the transition from an approved plan to the more advantageous alternative. In the event of an electric security plan's termination pursuant to this division, the commission shall permit the continued deferral and phase-in of any amounts that occurred prior to that termination and the recovery of those amounts as contemplated under that electric security plan.

(F) With regard to the provisions that are included in an electric security plan under this section, the commission shall consider, following the end of each annual period of the plan, if any such adjustments resulted in excessive earnings as measured by whether the earned return on common equity of the electric distribution utility is significantly in excess of the return on common equity that was earned during the same period by publicly traded companies, including utilities, that face comparable business and financial risk, with such adjustments for capital structure as may be appropriate. Consideration also shall be given to the capital requirements of future committed investments in this state. The burden of proof for demonstrating that significantly excessive earnings did not occur shall be on the electric distribution utility. If the commission finds that such adjustments, in the aggregate, did result in significantly excessive earnings, it shall require the electric distribution utility to return to consumers the amount of the excess by prospective adjustments; provided that, upon making such prospective adjustments, the electric distribution utility shall have the right to terminate the plan and immediately file an application pursuant to section 4928.142 of the Revised Code. Upon termination of a plan under this division, rates shall be set on the same basis as specified in division (C)(2)(b) of this section, and the commission shall permit the continued deferral and phase-in of any amounts that occurred prior to that termination and the recovery of those amounts as contemplated under that electric security plan. In making its determination of significantly excessive earnings under this division, the commission shall not consider, directly or indirectly, the revenue, expenses, or earnings of any affiliate or parent company.

Sec. 4928.20.  (A) The legislative authority of a municipal corporation may adopt an ordinance, or the board of township trustees of a township or the board of county commissioners of a county may adopt a resolution, under which, on or after the starting date of competitive retail electric service, it may aggregate in accordance with this section the retail electrical loads located, respectively, within the municipal corporation, township, or unincorporated area of the county and, for that purpose, may enter into service agreements to facilitate for those loads the sale and purchase of electricity. The legislative authority or board also may exercise such authority jointly with any other such legislative authority or board. For customers that are not mercantile customers, an ordinance or resolution under this division shall specify whether the aggregation will occur only with the prior, affirmative consent of each person owning, occupying, controlling, or using an electric load center proposed to be aggregated or will occur automatically for all such persons pursuant to the opt-out requirements of division (D) of this section. The aggregation of mercantile customers shall occur only with the prior, affirmative consent of each such person owning, occupying, controlling, or using an electric load center proposed to be aggregated. Nothing in this division, however, authorizes the aggregation of the retail electric loads of an electric load center, as defined in section 4933.81 of the Revised Code, that is located in the certified territory of a nonprofit electric supplier under sections 4933.81 to 4933.90 of the Revised Code or an electric load center served by transmission or distribution facilities of a municipal electric utility.

(B) If an ordinance or resolution adopted under division (A) of this section specifies that aggregation of customers that are not mercantile customers will occur automatically as described in that division, the ordinance or resolution shall direct the board of elections to submit the question of the authority to aggregate to the electors of the respective municipal corporation, township, or unincorporated area of a county at a special election on the day of the next primary or general election in the municipal corporation, township, or county. The legislative authority or board shall certify a copy of the ordinance or resolution to the board of elections not less than ninety days before the day of the special election. No ordinance or resolution adopted under division (A) of this section that provides for an election under this division shall take effect unless approved by a majority of the electors voting upon the ordinance or resolution at the election held pursuant to this division.

(C) Upon the applicable requisite authority under divisions (A) and (B) of this section, the legislative authority or board shall develop a plan of operation and governance for the aggregation program so authorized. Before adopting a plan under this division, the legislative authority or board shall hold at least two public hearings on the plan. Before the first hearing, the legislative authority or board shall publish notice of the hearings once a week for two consecutive weeks in a newspaper of general circulation in the jurisdiction or as provided in section 7.16 of the Revised Code. The notice shall summarize the plan and state the date, time, and location of each hearing.

(D) No legislative authority or board, pursuant to an ordinance or resolution under divisions (A) and (B) of this section that provides for automatic aggregation of customers that are not mercantile customers as described in division (A) of this section, shall aggregate the electrical load of any electric load center located within its jurisdiction unless it in advance clearly discloses to the person owning, occupying, controlling, or using the load center that the person will be enrolled automatically in the aggregation program and will remain so enrolled unless the person affirmatively elects by a stated procedure not to be so enrolled. The disclosure shall state prominently the rates, charges, and other terms and conditions of enrollment. The stated procedure shall allow any person enrolled in the aggregation program the opportunity to opt out of the program every three years, without paying a switching fee. Any such person that opts out before the commencement of the aggregation program pursuant to the stated procedure shall default to the standard service offer provided under section 4928.14 or division (D) of section 4928.35 of the Revised Code until the person chooses an alternative supplier.

(E)(1) With respect to a governmental aggregation for a municipal corporation that is authorized pursuant to divisions (A) to (D) of this section, resolutions may be proposed by initiative or referendum petitions in accordance with sections 731.28 to 731.41 of the Revised Code.

(2) With respect to a governmental aggregation for a township or the unincorporated area of a county, which aggregation is authorized pursuant to divisions (A) to (D) of this section, resolutions may be proposed by initiative or referendum petitions in accordance with sections 731.28 to 731.40 of the Revised Code, except that:

(a) The petitions shall be filed, respectively, with the township fiscal officer or the board of county commissioners, who shall perform those duties imposed under those sections upon the city auditor or village clerk.

(b) The petitions shall contain the signatures of not less than ten per cent of the total number of electors in, respectively, the township or the unincorporated area of the county who voted for the office of governor at the preceding general election for that office in that area.

(F) A governmental aggregator under division (A) of this section is not a public utility engaging in the wholesale purchase and resale of electricity, and provision of the aggregated service is not a wholesale utility transaction. A governmental aggregator shall be subject to supervision and regulation by the public utilities commission only to the extent of any competitive retail electric service it provides and commission authority under this chapter.

(G) This section does not apply in the case of a municipal corporation that supplies such aggregated service to electric load centers to which its municipal electric utility also supplies a noncompetitive retail electric service through transmission or distribution facilities the utility singly or jointly owns or operates.

(H) A governmental aggregator shall not include in its aggregation the accounts of any of the following:

(1) A customer that has opted out of the aggregation;

(2) A customer in contract with a certified electric services company;

(3) A customer that has a special contract with an electric distribution utility;

(4) A customer that is not located within the governmental aggregator's governmental boundaries;

(5) Subject to division (C) of section 4928.21 of the Revised Code, a customer who appears on the "do not aggregate" list maintained under that section.

(I) Customers that are part of a governmental aggregation under this section shall be responsible only for such portion of a surcharge under section 4928.144 of the Revised Code that is proportionate to the benefits, as determined by the commission, that electric load centers within the jurisdiction of the governmental aggregation as a group receive. The proportionate surcharge so established shall apply to each customer of the governmental aggregation while the customer is part of that aggregation. If a customer ceases being such a customer, the otherwise applicable surcharge shall apply. Nothing in this section shall result in less than full recovery by an electric distribution utility of any surcharge authorized under section 4928.144 of the Revised Code. Nothing in this section shall result in less than the full and timely imposition, charging, collection, and adjustment by an electric distribution utility, its assignee, or any collection agent, of the phase-in-recovery charges authorized pursuant to a final financing order issued pursuant to sections 4928.23 to 4928.2318 of the Revised Code.

(J) On behalf of the customers that are part of a governmental aggregation under this section and by filing written notice with the public utilities commission, the legislative authority that formed or is forming that governmental aggregation may elect not to receive standby service within the meaning of division (B)(2)(d) of section 4928.143 of the Revised Code from an electric distribution utility in whose certified territory the governmental aggregation is located and that operates under an approved electric security plan under that section. Upon the filing of that notice, the electric distribution utility shall not charge any such customer to whom competitive retail electric generation service is provided by another supplier under the governmental aggregation for the standby service. Any such consumer that returns to the utility for competitive retail electric service shall pay the market price of power incurred by the utility to serve that consumer plus any amount attributable to the utility's cost of compliance with the alternative energy resource provisions of section sections 4928.64 to 4928.6410 of the Revised Code to serve the consumer. Such market price shall include, but not be limited to, capacity and energy charges; all charges associated with the provision of that power supply through the regional transmission organization, including, but not limited to, transmission, ancillary services, congestion, and settlement and administrative charges; and all other costs incurred by the utility that are associated with the procurement, provision, and administration of that power supply, as such costs may be approved by the commission. The period of time during which the market price and alternative energy resource amount shall be so assessed on the consumer shall be from the time the consumer so returns to the electric distribution utility until the expiration of the electric security plan. However, if that period of time is expected to be more than two years, the commission may reduce the time period to a period of not less than two years.

(K) The commission shall adopt rules to encourage and promote large-scale governmental aggregation in this state. For that purpose, the commission shall conduct an immediate review of any rules it has adopted for the purpose of this section that are in effect on the effective date of the amendment of this section by S.B. 221 of the 127th general assembly, July 31, 2008. Further, within the context of an electric security plan under section 4928.143 of the Revised Code, the commission shall consider the effect on large-scale governmental aggregation of any nonbypassable generation charges, however collected, that would be established under that plan, except any nonbypassable generation charges that relate to any cost incurred by the electric distribution utility, the deferral of which has been authorized by the commission prior to the effective date of the amendment of this section by S.B. 221 of the 127th general assembly, July 31, 2008.

Sec. 4928.61.  (A) There is hereby established in the state treasury the advanced energy fund, into which shall be deposited all advanced energy revenues remitted to the director of development under division (B) of this section, for the exclusive purposes of funding the advanced energy program created under section 4928.62 of the Revised Code and paying the program's administrative costs. Interest on the fund shall be credited to the fund.

(B) Advanced energy revenues shall include all of the following:

(1) Revenues remitted to the director after collection by each electric distribution utility in this state of a temporary rider on retail electric distribution service rates as such rates are determined by the public utilities commission pursuant to this chapter. The rider shall be a uniform amount statewide, determined by the director of development, after consultation with the public benefits advisory board created by section 4928.58 of the Revised Code. The amount shall be determined by dividing an aggregate revenue target for a given year as determined by the director, after consultation with the advisory board, by the number of customers of electric distribution utilities in this state in the prior year. Such aggregate revenue target shall not exceed more than fifteen million dollars in any year through 2005 and shall not exceed more than five million dollars in any year after 2005. The rider shall be imposed beginning on the effective date of the amendment of this section by Sub. H.B. 251 of the 126th general assembly, January 4, 2007, and shall terminate at the end of ten years following the starting date of competitive retail electric service or until the advanced energy fund, including interest, reaches one hundred million dollars, whichever is first.

(2) Revenues from payments, repayments, and collections under the advanced energy program and from program income;

(3) Revenues remitted to the director after collection by a municipal electric utility or electric cooperative in this state upon the utility's or cooperative's decision to participate in the advanced energy fund;

(4) Revenues from renewable energy compliance payments as provided under division (C)(2) of section 4928.64 4928.643 of the Revised Code;

(5) Revenue from forfeitures under division (C) of section 4928.66 4928.6656 of the Revised Code;

(6) Funds transferred pursuant to division (B) of Section 512.10 of S.B. 315 of the 129th general assembly;

(7) Interest earnings on the advanced energy fund.

(C)(1) Each electric distribution utility in this state shall remit to the director on a quarterly basis the revenues described in divisions (B)(1) and (2) of this section. Such remittances shall occur within thirty days after the end of each calendar quarter.

(2) Each participating electric cooperative and participating municipal electric utility shall remit to the director on a quarterly basis the revenues described in division (B)(3) of this section. Such remittances shall occur within thirty days after the end of each calendar quarter. For the purpose of division (B)(3) of this section, the participation of an electric cooperative or municipal electric utility in the energy efficiency revolving loan program as it existed immediately prior to the effective date of the amendment of this section by Sub. H.B. 251 of the 126th general assembly, January 4, 2007, does not constitute a decision to participate in the advanced energy fund under this section as so amended.

(3) All remittances under divisions (C)(1) and (2) of this section shall continue only until the end of ten years following the starting date of competitive retail electric service or until the advanced energy fund, including interest, reaches one hundred million dollars, whichever is first.

(D) Any moneys collected in rates for non-low-income customer energy efficiency programs, as of October 5, 1999, and not contributed to the energy efficiency revolving loan fund authorized under this section prior to the effective date of its amendment by Sub. H.B. 251 of the 126th general assembly, January 4, 2007, shall be used to continue to fund cost-effective, residential energy efficiency programs, be contributed into the universal service fund as a supplement to that required under section 4928.53 of the Revised Code, or be returned to ratepayers in the form of a rate reduction at the option of the affected electric distribution utility.

Sec. 4928.64. (A)(1) As used in sections 4928.64 to 4928.6410 and 4928.65 of the Revised Code, "alternative energy resource" means an the following:

(1) An advanced energy resource or renewable energy resource, as defined in section 4928.01 of the Revised Code that has a placed-in-service date of January 1, 1998, or after; a

(2) 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; or a

(3) A mercantile customer-sited advanced energy resource or renewable energy resource, whether new or existing, that the mercantile customer contractually commits to an electric distribution utility or an electric services company for purposes of compliance with section 4928.641 of the Revised Code or contractually commits to an electric distribution utility for integration into the electric distribution utility's demand-response, energy efficiency, or peak demand reduction programs as provided under division (A)(2)(c) of section 4928.66 4928.6650 of the Revised Code, including, but not limited to, any of the following:

(a) A resource, behavior, or practice that has does any of the following:

(i) Has the effect of improving the relationship between real and reactive power;

(ii) Reduces line losses;

(iii) Reduces transformation losses.

(b) A resource, behavior, or practice that makes efficient use of waste heat or other thermal capabilities owned or controlled by a mercantile customer;

(c) Storage, behavior, practice, or technology that allows a mercantile customer more flexibility to modify its demand or load and usage characteristics;

(d) Electric generation equipment owned or controlled by a mercantile customer that uses an advanced energy resource or renewable energy resource;

(e) Any plan, policy, behavior, or practice that reduces the total energy intensity of a facility, pipeline, building, plant, or equipment regardless of the type of energy intensity reduction, provided that such plan, policy, behavior, or practice does not result in a substitution of an alternative form of energy use for the use of purchased electricity;

(f) Any plan, policy, behavior, or practice that reduces the energy intensity of any water supply function or water treatment function;

(g) Any advanced energy resource or renewable energy resource of the mercantile customer that can be utilized effectively as part of any advanced energy resource plan of an electric distribution utility and would otherwise qualify as an alternative energy resource if it were utilized directly by an electric distribution utility.

(2)(h) Any energy intensity reduction that is achieved, in whole or in part, as a result of the funding provided from the universal service fund established under section 4928.51 of the Revised Code.

(B) For the purpose of this section sections 4928.641 to 4928.6410 of the Revised Code and as it considers appropriate, the public utilities commission may classify any new technology as such an advanced energy resource or a renewable energy resource.

Sec. 4928.641.  (B)(A) By 2025 and thereafter, an electric distribution utility shall provide from alternative energy resources, including, at its discretion, alternative energy resources obtained pursuant to an electricity supply contract, a portion of the electricity supply required for its standard service offer under section 4928.141 of the Revised Code, and an electric services company shall provide a portion of its electricity supply for retail consumers in this state from alternative energy resources, including, at its discretion, alternative energy resources obtained pursuant to an electricity supply contract. That portion shall equal twenty-five per cent of the total number of kilowatt hours of electricity sold by the subject utility or company 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 or, in the case of an electric services company, are served by the company and are located within this state. However, nothing in this section precludes a utility or company from providing a greater percentage. The baseline for a utility's or company's compliance with the alternative energy resource requirements of this section shall be the average of such total kilowatt hours it sold in the preceding three calendar years, except that the public utilities commission may reduce a utility's or company's baseline to adjust for new economic growth in the utility's certified territory or, in the case of an electric services company, in the company's service area in this state.

Of (B) Subject to the cost cap provisions of section 4928.644 of the Revised Code, of the alternative energy resources implemented by the subject utility or company by 2025 and thereafter:

(1) Half may be generated met from advanced energy resources and shall be counted towards compliance with this section in every year it is provided in order to meet compliance, beginning in 2009;

(2) At least half shall be generated from renewable energy resources, including one-half per cent from solar energy resources, in accordance with the following benchmarks:

(3) At least one-half of the renewable energy resources implemented by the utility or company shall be met through facilities located in this state; the remainder shall be met with resources that can be shown to be deliverable into this state from renewable energy resources that are one of the following:

(a) Located in this state;

(b) Eligible, or become eligible, to be provided as capacity, energy, or ancillary services through or within the wholesale electric market operated by the PJM interconnection regional transmission organization or its successor, the midcontinent independent system operator or its successor, or any regional transmission entity performing the functions identified in section 4928.12 of the Revised Code and applicable to this state.

Sec. 4928.642.  (C)(1) The public utilities commission annually shall review an electric distribution utility's or electric services company's compliance with the most recent applicable benchmark under division (B)(2) of this section 4928.641 of the Revised Code and, in the course of that review, shall identify any undercompliance or noncompliance of the utility or company that it determines is weather-related, related to equipment or resource shortages for advanced energy or renewable energy resources as applicable, or is otherwise outside the utility's or company's control.

Sec. 4928.643.  (2) Subject to the cost cap provisions of division (C)(3) of this section 4928.644 of the Revised Code, if the public utilities commission determines, after notice and opportunity for hearing, and based upon its findings in that review regarding avoidable undercompliance or noncompliance, but subject to division (C)(4) of this section 4928.645 of the Revised Code, that the utility or company has failed to comply with any such benchmark, the commission shall may impose a renewable energy compliance payment on the utility or company.

(a)(A) The compliance payment pertaining to the solar energy resource benchmarks under division (B)(2) of this section 4928.641 of the Revised Code shall be an amount per megawatt hour of undercompliance or noncompliance in the period under review, starting at four hundred fifty dollars for 2009, four hundred dollars for 2010 and 2011, and similarly reduced every two years thereafter through 2024 by fifty dollars, to a minimum of fifty dollars.

(b)(B) The compliance payment pertaining to the renewable energy resource benchmarks under division (B)(2) of this section 4928.641 of the Revised Code shall equal the number of additional renewable energy credits that the electric distribution utility or electric services company would have needed to comply with the applicable benchmark in the period under review times an amount that shall begin at forty-five dollars and shall be adjusted annually by the commission to reflect any change in the consumer price index as defined in section 101.27 of the Revised Code, but shall not be less than forty-five dollars.

(c)(C) The compliance payment shall not be passed through by the electric distribution utility or electric services company to consumers. The compliance payment shall be remitted to the commission, for deposit to the credit of the advanced energy fund created under section 4928.61 of the Revised Code. Payment of the compliance payment shall be subject to such collection and enforcement procedures as apply to the collection of a forfeiture under sections 4905.55 to 4905.60 and 4905.64 of the Revised Code.

Sec. 4928.644.  (3)(A) An electric distribution utility or an electric services company need not comply with a benchmark under division (B)(1) or (2) of this section to the extent that its reasonably expected cost of that compliance exceeds its reasonably expected cost of otherwise producing or acquiring the requisite electricity by three per cent or more. The cost of compliance shall be calculated as though any exemption from taxes and assessments had not been granted under section 5727.75 of the Revised Code shall not continue to comply, or be subject to any obligation to continue to comply, in any year, with a benchmark under division (B)(1) or (2) of section 4928.641 of the Revised Code, if continued compliance for that year would exceed the cost cap calculated under division (B) of this section.

(B) The cost cap for each utility and company shall equal the product of three per cent multiplied by the sales supply amount. The sales supply amount is the product of the sales baseline multiplied by the generation supply dollar amount. For purposes of division (B) of this section:

(1) "Sales baseline" means the sales baseline in megawatt hours for the applicable compliance year, which consists of an average of the utility's or company's annual retail sales of electricity sold in the state from the three preceding years; and

(2) "Generation supply dollar amount" means the reasonably expected dollar amount per megawatt hour for the generation supply available to consumers pursuant to section 4928.141 of the Revised Code during the applicable compliance year, which consists of a weighted average of the cost of the standard service offer supply for the delivery during that compliance year, net of distribution losses. With respect to an electric services company, generation supply dollar amount means the average weighted cost of generation supply of the relevant electric distribution utility.

(C) In making the calculation under division (B) of this section, any exemption from taxes and assessments granted under section 5727.75 of the Revised Code shall be treated as if it had not been granted.

(D) Notwithstanding the cost cap established in this section, ongoing costs associated with contracts executed by the electric distribution utility to procure renewable energy resources that are being recovered from customers through a bypassable charge as of the effective date of S.B. 58 of the 130th general assembly shall continue to be recovered for the term of the contract.

Sec. 4928.645.  (4)(a)(A) An electric distribution utility or electric services company may request the public utilities commission to make a force majeure determination pursuant to this division section regarding all or part of the utility's or company's compliance with any minimum benchmark under division (B)(2) of this section 4928.641 of the Revised Code during the period of review occurring pursuant to division (C)(2) of this section 4928.643 of the Revised Code. The commission may require the electric distribution utility or electric services company to make solicitations for renewable energy resource credits as part of its default service before the utility's or company's request of force majeure under this division can be made.

(b)(B) Within ninety days after the filing of a request by an electric distribution utility or electric services company under division (C)(4)(a)(A) of this section, the commission shall determine if renewable energy resources are reasonably available in the marketplace in sufficient quantities for the utility or company to comply with the subject minimum benchmark during the review period. In making this determination, the commission shall consider whether the electric distribution utility or electric services company has made a good faith effort to acquire sufficient renewable energy or, as applicable, solar energy resources to so comply, including, but not limited to, by banking or seeking renewable energy resource credits or by seeking the resources through long-term contracts. Additionally, the commission shall consider the availability of renewable energy or solar energy resources in this state and other jurisdictions in the PJM interconnection regional transmission organization or its successor and the midwest midcontinent independent system operator or its successor.

(c)(C) If, pursuant to division (C)(4)(b)(B) of this section, the commission determines that renewable energy or solar energy resources are not reasonably available to permit the electric distribution utility or electric services company to comply, during the period of review, with the subject minimum benchmark prescribed under division (B)(2) of this section 4928.641 of the Revised Code, the commission shall modify that compliance obligation of the utility or company as it determines appropriate to accommodate the finding. Commission modification shall not automatically reduce the obligation for the electric distribution utility's or electric services company's compliance in subsequent years. If it modifies the electric distribution utility or electric services company obligation under division (C)(4)(c) of this section, the commission may require the utility or company, if sufficient renewable energy resource credits exist in the marketplace, to acquire additional renewable energy resource credits in subsequent years equivalent to the utility's or company's modified obligation under division (C)(4)(c) of this section.

Sec. 4928.646.  (5) The public utilities commission shall establish a process to provide for at least an annual review of the alternative energy resource market in this state and in the service territories of the regional transmission organizations that manage transmission systems located in this state. The commission shall use the results of this study to identify any needed changes to the amount of the renewable energy compliance payment specified under divisions (C)(2)(a)(A) and (b)(B) of this section 4928.643 of the Revised Code. Specifically, the commission may increase the amount to ensure that payment of compliance payments is not used to achieve compliance with this section 4928.641 of the Revised Code in lieu of actually acquiring or realizing energy derived from renewable energy resources. However, if the commission finds that the amount of the compliance payment should be otherwise changed, the commission shall present this finding to the general assembly for legislative enactment.

Sec. 4928.647.  (D)(1)(A) The public utilities commission annually shall submit to the general assembly in accordance with section 101.68 of the Revised Code a report describing all of the following:

(a)(1) The compliance of electric distribution utilities and electric services companies with division (B) of this section 4928.641 of the Revised Code;

(b)(2) The average annual cost of renewable energy credits purchased by utilities and companies for the year covered in the report;

(c)(3) Any strategy for utility and company compliance or for encouraging the use of alternative energy resources in supplying this state's electricity needs in a manner that considers available technology, costs, job creation, and economic impacts.

(B) The commission shall begin providing the information described in division (D)(1)(b)(A)(2) of this section in each report submitted after the effective date of the amendment of this section by S.B. 315 of the 129th general assembly September 10, 2012. The commission shall allow and consider public comments on the report prior to its submission to the general assembly. Nothing in the report shall be binding on any person, including any utility or company for the purpose of its compliance with any benchmark under division (B) of this section 4928.641 of the Revised Code, or the enforcement of that provision under division (C) of this section sections 4928.642 to 4928.646 of the Revised Code.

Sec. 4928.648.  (2) The governor, in consultation with the commission chairperson of the public utilities commission, shall appoint an alternative energy advisory committee. The committee shall examine available technology for and related timetables, goals, and costs of the alternative energy resource requirements under division (B) of this section 4928.641 of the Revised Code and shall submit to the commission a semiannual report of its recommendations.

Sec. 4928.649.  (E) All costs incurred by an electric distribution utility in complying with the requirements of this section 4928.641 of the Revised Code shall be bypassable by any consumer that has exercised choice of supplier under section 4928.03 of the Revised Code.

Sec. 4928.6410. The following shall be counted for purposes of measuring compliance with the requirements of section 4928.641 of the Revised Code regardless of whether the resource or its attributes may also be counted towards compliance with the requirements of sections 4928.66 to 4928.6660 of the Revised Code:

(A) Energy efficiency savings and demand reductions described in division (E) of section 717.25 of the Revised Code and divisions (A) and (B) of section 1710.061 of the Revised Code;

(B) Any advanced energy resource.

Sec. 4928.65. An electric distribution utility or electric services company may use renewable energy credits any time in the five calendar years following the date of their purchase or acquisition from any entity, including, but not limited to, a mercantile customer or an owner or operator of a hydroelectric generating facility that is located at a dam on a river, or on any water discharged to a river or lake, that is within or bordering this state or, within or bordering an adjoining state, or within the Canadian provinces of Ontario or Quebec, for the purpose of complying with the renewable energy and solar energy resource requirements of division (B)(2) of section 4928.64 4928.641 of the Revised Code. The public utilities commission shall adopt rules specifying that one unit of credit shall equal one megawatt hour of electricity derived from renewable energy resources, except that, for a generating facility of seventy-five megawatts or greater that is situated within this state and has committed by December 31, 2009, to modify or retrofit its generating unit or units to enable the facility to generate principally from biomass energy by June 30, 2013, each megawatt hour of electricity generated principally from that biomass energy shall equal, in units of credit, the product obtained by multiplying the actual percentage of biomass feedstock heat input used to generate such megawatt hour by the quotient obtained by dividing the then existing unit dollar amount used to determine a renewable energy compliance payment as provided under division (C)(2)(b)(B) of section 4928.64 4928.643 of the Revised Code by the then existing market value of one renewable energy credit, but such megawatt hour shall not equal less than one unit of credit. The rules also shall provide for this state a system of registering renewable energy credits by specifying which of any generally available registries shall be used for that purpose and not by creating a registry. That selected system of registering renewable energy credits shall allow a hydroelectric generating facility to be eligible for obtaining renewable energy credits and shall allow customer-sited projects or actions the broadest opportunities to be eligible for obtaining renewable energy credits.

Sec. 4928.66.  As used in sections 4928.66 to 4928.6660 of the Revised Code:

(A) "Energy efficiency program" may include the following:

(1) A policy, behavior, practice, or program designed and implemented to comply with energy efficiency requirements;

(2) A combined heat and power system placed into service or retrofitted on or after the effective date of the amendment of this section by S.B. 315 of the 129th general assembly, September 10, 2012;

(3) A waste energy recovery system placed into service or retrofitted on or after September 10, 2012, except that a waste energy recovery system described in division (A)(38)(b) of section 4928.01 of the Revised Code may be included only if it was placed into service between January 1, 2002, and December 31, 2004;

(4) Increased use of post-consumer recycled glass by a mercantile customer.

(B) "Energy efficiency requirements" means the savings requirements under section 4928.661 of the Revised Code.

(C) "Lost revenue mechanism" means a mechanism to recover either or both of the following based on kilowatt hours eliminated as a result of compliance with energy efficiency or peak demand reduction requirements:

(1) All lost, forgone, or eliminated distribution revenue;

(2) All lost, forgone, or eliminated distribution and transmission revenue.

(D) "Peak demand reduction program" means a policy, practice, behavior, or program designed to comply with peak demand reduction requirements.

(E) "Peak demand reduction requirements" means benchmark requirements under section 4928.662 of the Revised Code.

(F) "Regional transmission organization" means the PJM interconnection regional transmission organization, L.L.C. or any entity performing the functions identified in section 4928.12 of the Revised Code within this state.

(G) "Revenue decoupling mechanism" means a rate design or other cost recovery mechanism that provides recovery of the cost of distribution service irrespective of distribution service sales.

(H) "Utility cost test" means a test to determine the net benefits of an energy efficiency or peak demand reduction program based on the costs and benefits of the program to the electric distribution utility, including incentive costs and excluding any net costs incurred by the customer participating in the program. The following apply for the purposes of a utility cost test:

(1) "Benefits" means the following resulting from the program:

(a) Avoided supply costs of energy and demand;

(b) The reduction in transmission, distribution, generation, or capacity costs for the periods when load is reduced.

(2) "Costs" means the electric distribution utility's costs of implementing the policy, behavior, practice, or program, including the incentives paid to customers, and the increased supply costs for the periods when load is not reduced through the operation of the policy, behavior, practice, or program.

(3) "Net benefits" means the net present value of the difference between the benefits and costs as part of a utility cost test.

Sec. 4928.66 4928.661.  (A)(1)(a) Beginning in 2009, an electric distribution utility shall implement energy efficiency programs that achieve energy efficiency savings that reduce the quantity of energy required to maintain or improve end-use or utility system functionality. Such energy savings shall be equivalent to at least three-tenths of one per cent of the total, annual average, and normalized kilowatt-hour sales of the electric distribution utility during the preceding three calendar years to customers in this state. For a waste energy recovery or combined heat and power system, the savings shall be as estimated by the public utilities commission. The savings requirement, using such a three-year average, shall increase to an additional five-tenths of one per cent in 2010, seven-tenths of one per cent in 2011, eight-tenths of one per cent in 2012, nine-tenths of one per cent in 2013, one per cent from 2014 to 2018, and one and one-quarter per cent in 2019, one and one-half per cent in 2020, one and three-quarters per cent in 2021, two per cent each year thereafter in 2022, two and one-quarter per cent in 2023, two and one-half per cent in 2024, and two and three-quarters per cent in 2025, achieving a cumulative, annual energy savings in excess of twenty-two per cent by the end of 2025. For purposes of a waste energy recovery or combined heat and power system, an electric distribution utility shall not apply more than the total annual percentage of the electric distribution utility's industrial-customer load, relative to the electric distribution utility's total load, to the annual energy savings requirement.

Sec. 4928.662.  (b)(A) Beginning in 2009, an electric distribution utility shall implement peak demand reduction programs designed to achieve a one per cent reduction in peak demand in 2009 and an additional seventy-five hundredths of one per cent reduction each year through 2018. In Peak demand reduction shall be measured relative to the measure of the peak demand that is used by the applicable regional transmission organization to establish a supplier's resource adequacy or capacity obligation.

(B) In 2018, the standing committees in the house of representatives and the senate primarily dealing with energy issues shall make recommendations to the general assembly regarding future peak demand reduction targets.

Sec. 4928.665.  (2) For the purposes of divisions (A)(1)(a) and (b) of this section:

(a) The baseline for energy savings under division (A)(1)(a) of this section the energy efficiency requirements shall be the average of the total kilowatt hours the electric distribution utility sold in the preceding three calendar years, and the baseline for a peak demand reduction under division (A)(1)(b) of this section the peak demand reduction requirements shall be the average peak demand on the utility in the preceding three calendar years, except that the public utilities commission may shall reduce either baseline the baselines to adjust for new economic growth in the utility's certified territory and a downturn in the economy. The commission shall exclude the following from the baseline:

(A) The load and usage of customers for which reasonable arrangements have been approved under section 4905.31 of the Revised Code;

(B) The load and usage of customers that have opted out of participation in energy efficiency and peak demand reduction programs under section 4928.6630 of the Revised Code.

Sec. 4928.666.  If a mercantile customer makes such existing or new demand-response, energy efficiency, including waste energy recovery and combined heat and power, or peak demand reduction capability available to an electric distribution utility pursuant to division (A)(2)(c) of this section 4928.6650 of the Revised Code, the electric utility's baseline under division (A)(2)(a) of this section 4928.665 of the Revised Code shall be adjusted to exclude the effects of all such demand-response, energy efficiency, including waste energy recovery and combined heat and power, or peak demand reduction programs that may have existed during the period used to establish the baseline.

Sec. 4928.667.  The baseline also shall be normalized for changes in numbers of customers, sales, weather, peak demand, and other appropriate factors so that the compliance measurement is not unduly influenced by factors outside the control of the electric distribution utility.

Sec. 4928.668.  (b) The public utilities commission may amend the benchmarks set forth in division (A)(1)(a) or (b) of this section energy efficiency and peak demand reduction requirements if, after application by the electric distribution utility, the commission determines that the amendment is necessary because the utility cannot reasonably achieve the benchmarks due to regulatory, economic, or technological reasons beyond its reasonable control.

Sec. 4928.6610.  Each electric distribution utility shall have a compliance plan to meet the energy efficiency and peak demand reduction requirements. Following the expiration of any compliance plan filed with or approved by the public utilities commission prior to the effective date of this section, each subsequent compliance plan shall encompass at least a three-year period.

Sec. 4928.6611.  Each compliance plan approved by the public utilities commission shall include:

(A) Recovery from customers of all program costs incurred to implement the measures adopted for compliance with the mandates;

(B) At the choice of the electric distribution utility, for each rate class of customer, compensation through either a lost revenue mechanism or a revenue decoupling mechanism; and

(C) A shared savings incentive mechanism that permits the utility to retain one-third of the after-tax net benefits associated with the approved programs as measured by a utility cost test, provided that such incentive mechanism shall apply to all compliance activities, including activities described in sections 4928.6627 and 4928.6640 of the Revised Code, but excluding the following:

(1) Any programs adopted by the commission and described in division (E)(1) of section 4928.58 of the Revised Code that are not cost-effective;

(2) Compliance that exceeds energy efficiency and peak demand requirements.

For purposes of calculating a shared savings incentive only, the commission may modify the utility cost test to include societal benefits that are validated by independent measurement and verification protocols that meet the evidentiary standard as specified by the United States supreme court in Daubert v. Merrell Dow Pharmaceuticals, Inc., (1993)509 U.S. 579.

Sec. 4928.6612.  In advance of the period during which the electric distribution utility will be required to comply with the energy efficiency and peak demand requirements, the public utilities commission shall approve a compliance plan for each electric distribution utility.

Sec. 4928.6613. (A) If, on the effective date of S.B. 58 of the 130th general assembly, an electric distribution utility has a compliance plan based on the energy efficiency savings and peak demand reduction requirements under former section 4928.66 of the Revised Code as it existed prior to the effective date of S.B. 58 of the 130th general assembly that was approved by the public utilities commission or was filed with but not yet approved by the commission, the electric distribution utility may, at its sole discretion, continue or implement such compliance plan, including any existing approved cost recovery and incentive mechanisms, until such costs and incentives are fully recovered. All provisions of sections 4928.66 to 4928.6660 of the Revised Code as amended or enacted in S.B. 58 of the 130th general assembly shall apply if the electric distribution utility continues or implements such compliance plan.

(B) At its sole discretion, an electric distribution utility may elect not to be subject to a cost cap under sections 4928.6615 to 4928.6623 of the Revised Code as part of a compliance plan described in division (A) of this section.

(C) An electric distribution utility that continues or implements a compliance plan under division (A) of this section shall notify the public utilities commission if it elects not to be subject to a cost cap under sections 4928.6615 to 4928.6623 of the Revised Code while the plan is in effect.

Sec. 4928.6615.  Not later than ninety days after the effective date of S.B. 58 of the 130th general assembly, each electric distribution utility shall have a one-time irrevocable option, exercised solely at the discretion of that electric distribution utility, to select one of the cost caps under section 4928.6616 of the Revised Code, which cost cap shall apply to the electric distribution utility's compliance plans approved after the effective date of S.B. 58 of the 130th general assembly.

Sec. 4928.6616. In order to minimize future rate impacts associated with the energy efficiency and peak demand requirements and as a consumer safeguard, beginning with calendar year 2014, an electric distribution utility shall, pursuant to section 4928.6615 of the Revised Code, select one of the following cost cap methods for compliance plans approved after the effective date of S.B. 58 of the 130th general assembly:

(A) The electric distribution utility's costs for compliance with the energy efficiency and peak demand reduction requirements in any year shall not exceed the cost per kilowatt hour of energy efficiency savings and cost per kilowatt of peak demand reduction that was incurred in calendar year 2013;

(B) The total annualized rate impact of program costs and shared savings incentives associated with an electric distribution utility's compliance in any year with the energy efficiency and peak demand reduction requirements shall not exceed the program costs approved for that electric distribution utility for the calendar year 2013.

Sec. 4928.6617.  Once the applicable cost cap under section 4928.6616 of the Revised Code is met, an electric distribution utility, by operation of law, is relieved of the following:

(A) Making further expenditures to meet the energy efficiency or peak demand reduction requirements for the remainder of the calendar year;

(B) Achieving the energy efficiency and peak demand reduction requirements for the calendar year.

Once either cost cap under section 4928.6616 of the Revised Code is met, the electric distribution utility is deemed to have met the energy efficiency and peak demand reduction requirements for that calendar year.

Sec. 4928.6618.  An electric distribution utility shall notify the public utilities commission when, if ever, the cost cap is met under section 4928.6616 of the Revised Code.

Sec. 4928.6619. Under either cost cap option described in section 4928.6616 of the Revised Code, the public utilities commission shall honor contractual obligations of an electric distribution utility that existed prior to the effective date of this section and shall ensure full recovery of costs relating to actions taken under previously approved compliance plans.

Sec. 4928.6620. Nothing in sections 4928.6615 to 4928.6623 of the Revised Code shall prevent the timely recovery of compliance costs and incentives incurred by an electric distribution utility prior to the effective date of S.B. 58 of the 130th general assembly and costs or compensation under a lost revenue mechanism or revenue decoupling mechanism or other approved incentive mechanism as provided for in sections 4928.6611 or 4928.6651 of the Revised Code.

Sec. 4928.6621.  The effects of lost revenue recovery or revenue decoupling shall not be included in the cost cap under sections 4928.6615 to 4928.6623 of the Revised Code.

Sec. 4928.6622.  (A) If the cost cap described in section 4928.6616 of the Revised Code is met, expenditure of program costs shall be curtailed as soon as practicable but full recovery of shared savings incentives earned on or before the date the cost cap is met shall not be curtailed or otherwise limited.

(B) An electric distribution utility shall be permitted to recover all compliance costs, incentives, and related items resulting from any temporary overcompliance resulting from sections 4928.665 to 4928.6640 of the Revised Code.

Sec. 4928.6623.  Any excess compliance with the energy efficiency and peak demand reduction requirements achieved at the time the cost cap is met may be banked for future use.

Sec. 4928.6625.  (c) Compliance with divisions (A)(1)(a) and (b) of this section the energy efficiency and peak demand reduction requirements shall be measured by including the effects of all demand-response programs capabilities for mercantile customers of the subject electric distribution utility, all waste energy recovery systems and all combined heat and power systems, and all such mercantile customer-sited energy efficiency, including waste energy recovery and combined heat and power, and peak demand reduction programs, adjusted upward by the appropriate loss factors.

Sec. 4928.6626.  Division (A)(2)(c) of this section Energy efficiency and peak demand reduction requirements shall be applied to include facilitating efforts by a mercantile customer or group of those customers to offer customer-sited demand-response, energy efficiency, including waste energy recovery and combined heat and power, or peak demand reduction capabilities to the electric distribution utility through a contractual commitment as part of a reasonable arrangement submitted to the public utilities commission pursuant to section 4905.31 of the Revised Code.

Sec. 4928.6627.  (d) Programs (A) Energy efficiency and peak demand reduction programs implemented by a utility may include demand-response programs, smart grid investment programs, provided that such programs are demonstrated to be cost-beneficial cost effective, and customer-sited programs, including waste energy recovery and combined heat and power systems, and transmission.

(B) The following shall also be counted toward meeting the energy efficiency and peak demand reduction requirements regardless of the intent or origin of the improvement:

(1) Transmission and distribution infrastructure improvements that reduce line losses;

(2) Energy savings and peak demand reduction that is achieved, in whole or in part, as a result of funding provided from the universal service fund established by section 4928.51 of the Revised Code.

Sec. 4928.6630.  Any retail customer of an electric distribution utility that receives service above the primary voltage level as determined by the utility's tariff classification, may opt out of both the opportunity and ability to obtain direct benefits from the utility's compliance plan. Such opt out shall extend to all of the customer's accounts, irrespective of the size or service voltage level, which are associated with the activities performed by the customer and which are located on or adjacent to the customer's premises that are served above the primary voltage level.

Sec. 4928.6631.  Any retail customer electing to opt out under sections 4928.6630 to 4928.6636 of the Revised Code shall do so by providing a written notice of intent to opt out to the electric distribution utility from which it receives service and submitting a complete copy of the opt-out notice to the secretary of the public utilities commission.

(A) The notice provided to the utility shall include the following:

(1) A statement indicating that the customer has elected to opt out;

(2) The effective date of the election to opt out;

(3) The customer's account numbers for each account related to the customer's premises that receives service above the primary voltage level as determined by the utility's tariff classification;

(4) The physical location of the customer's load center.

(B) The opt-out notice shall include a written election to opt out and a verified statement that affirms the following:

(1) That the customer has adopted an ongoing energy management system that allows for identification and, in the customer's sole discretion, implementation of options to reasonably and cost effectively reduce the energy intensity of the organization;

(2) That the customer's energy management system incorporates independent measurement and verification or includes measurement and verification protocols that meet or exceed measurement and verification protocols that are generally accepted within the customer's business sector.

Sec. 4928.6632.  Upon a retail customer's election to opt out under sections 4928.6630 to 4928.6636 of the Revised Code, no account properly identified in the customer's verified notice shall be subject to the cost recovery mechanisms established under sections 4928.66 to 4928.6660 of the Revised Code or eligible to participate in, or directly benefit from, programs arising from electric distribution utility compliance plans approved by the commission.

Sec. 4928.6633.  (A) A retail customer subsequently may opt in under section 4928.6634 of the Revised Code after a previous election to opt out under sections 4928.6630 and 4928.6631 of the Revised Code if both of the following apply:

(1) The customer has previously opted out for a period of at least three consecutive calendar years.

(2) The customer gives twelve months' advance notice of its intent to opt in to the public utilities commission and the electric distribution utility from which it receives service.

(B) A retail customer that opts in under this section shall maintain its opt-in status for three consecutive calendar years before being eligible subsequently to exercise its right to opt out after giving the utility twelve months' advance notice.

(C) A retail customer is not eligible to participate in a mercantile customer agreement under section 4928.6650 of the Revised Code during any period when it has an opt-out status.

Sec. 4928.6634.  Any retail customer electing to opt in under section 4928.6633 of the Revised Code shall do so by providing a written notice of intent to opt in to the electric distribution utility from which it receives service and submitting a complete copy of the opt-in notice to the secretary of the public utilities commission. The notice shall include the following:

(A) A statement indicating that the customer has elected to opt in;

(B) The effective date of the election to opt in;

(C) The customer's account numbers for each account related to the customer's premises that receives service above the primary voltage level as determined by the utility's tariff classification;

(D) The physical location of the customer's load center.

Sec. 4928.6635.  If the energy management system of a retail customer that elects to opt out under sections 4928.6630 to 4938.6633 of the Revised Code does not incorporate independent measurement and verification protocols, the public utilities commission may request information from the customer for the limited purpose of determining if the customer's protocols are reasonable compared to the protocols generally accepted within the customer's business sector. If the commission determines that the customer's protocols do not meet the protocols generally accepted within the customer's business sector, the commission may provide the customer with measurement and verification protocols that meet the generally accepted protocols, and the customer shall either adopt the protocols provided or adopt alternate protocols that meet the protocols generally accepted within the customer's business sector. However, in no event shall the commission have any authority to supervise or regulate the customer's energy management system or the customer's process for measurement and verification.

Sec. 4928.6636. Sections 4928.6630 to 4928.6635 of the Revised Code shall apply to any accounts subject to the self-assessing purchaser option under section 5727.81 of the Revised Code.

Sec. 4928.6640.  For the purpose of measuring and determining compliance with the energy efficiency and peak demand reduction requirements, the public utilities commission shall count and recognize compliance as follows:

(A) Energy savings and peak demand reduction achieved through actions taken by customers or through utility programs that comply with federal standards for either or both energy efficiency and peak demand reduction requirements, including resources associated with such savings or reduction that are recognized as capacity resources by a regional transmission organization shall count toward compliance with the energy efficiency and peak demand reduction requirements.

(B) Energy savings and peak demand reduction shall be measured on the higher of an as found or deemed basis, achieved since 2006 and going forward. For new construction, the energy savings and peak demand reduction shall be counted based on 2008 federal standards, provided that when new construction replaces an existing facility, the difference in savings and reduction between the new and replaced facility shall be counted toward meeting the energy efficiency and peak demand reduction requirements.

(C) The commission shall count both the energy savings and peak demand reduction on an annualized basis.

(D) The commission shall count both the energy savings and peak demand reduction on a gross savings basis.

(E) The commission shall recognize and count energy savings or peak demand reductions, on a British thermal unit equivalent basis, that occur as a consequence of a compliance plan approved by the commission, except that a British thermal unit savings related to a reduction in gas usage or associated with switching equipment or processes from electric usage to gas usage shall not qualify.

(F) The commission shall recognize and count energy savings and peak demand reductions that occur as a consequence of consumer reductions in water usage or reductions and improvements in wastewater treatment.

(G) The commission shall recognize and count energy savings and peak demand reduction associated with heat rate and other efficiency or energy intensity improvements achieved since 2006 from electric generating plants that have existed as of January 1, 2013, and are located either within an electric distribution utility's certified territory, or owned and operated by an affiliate of the electric distribution utility as long as the generating plant was previously owned, in whole or in part, by an electric distribution utility located in this state. Such energy savings and peak demand reductions shall count as both energy savings and peak demand reductions under this section and advanced energy under sections 4928.64 to 4928.6410 of the Revised Code. Payments or incentives paid to any such generating plant by an electric distribution utility are solely within the discretion of the utility, but shall not be recoverable as a cost of compliance with the requirements of this section.

(H) The commission shall recognize and count all energy savings and peak demand reduction that is physically located within the certified territory of the electric distribution utility and is bid into regional transmission organization capacity auctions as energy efficiency resources and demand response resources toward the peak demand reduction requirements.

(I) For purposes of measuring compliance, the commission shall permit the energy efficiency and peak demand reduction requirements to be met on an aggregated basis for electric distribution utilities in the same holding company system.

(J) Energy savings and peak demand reduction amounts approved by the commission shall continue to be counted toward achieving the energy efficiency and peak demand reduction requirements as long as the requirements remain in effect. Any energy savings achieved in excess of the requirements may, at the discretion of the electric distribution utility, be banked and applied toward achieving the energy efficiency requirements in future years.

Sec. 4928.6641. An electric distribution utility annually shall notify the public utilities commission regarding which measurements described in section 4928.6640 of the Revised Code will be included to determine compliance with the energy efficiency and peak demand reduction requirements.

Sec. 4928.6642. All energy efficiency savings and peak demand reductions, including energy efficiency savings and demand reductions described in division (E) of section 717.25 of the Revised Code and divisions (A) and (B) of section 1710.061 of the Revised Code, shall be counted toward compliance with the energy efficiency and peak demand reduction requirements, consistent with section 4928.6640 of the Revised Code, regardless of whether the savings or reductions may also be counted towards compliance with sections 4928.64 to 4928.6410 of the Revised Code.

Sec. 4928.6645. The public utilities commission shall not require that an electric distribution utility achieve energy savings or peak demand reduction in excess of the energy efficiency and peak demand reduction requirements.

Sec. 4928.6646. The public utilities commission shall liberally construe sections 4928.66 to 4928.6660 of the Revised Code in favor of counting energy savings and peak demand reduction achieved by customers or through utility programs in order to achieve the energy efficiency and peak demand reduction requirements, as further specified in section 4928.6640 of the Revised Code.

Sec. 4928.6647. The public utilities commission shall not impose a penalty, require any shortfall to be carried forward to a future compliance year, or compel the use of banked energy savings as a result of noncompliance or undercompliance resulting from the application of the cost cap under sections 4928.6615 to 4928.6623 of the Revised Code.

Sec. 4928.6650.  Any mechanism designed to recover the cost of energy efficiency, including waste energy recovery and combined heat and power, and peak demand reduction programs under divisions (A)(1)(a) and (b) of this section may the energy efficiency and peak demand reduction requirements shall exempt any mercantile customers that commit their demand-response or other customer-sited capabilities, whether existing or new, for integration into the electric distribution utility's demand-response, energy efficiency, including waste energy recovery and combined heat and power, or peak demand reduction programs, if the provided that:

(A) The exemption in each year shall be proportionate to the annual compliance benchmark for such year compared to the customer's annualized demand or energy usage for the applicable baseline period; and

(B) The public utilities commission determines that that exemption reasonably encourages such customers to commit those capabilities to those programs.

Sec. 4928.6651.  (D) The public utilities commission may establish rules regarding the content of an application by an electric distribution utility for commission approval of a revenue decoupling mechanism under this division. Such an application shall not be considered an application to increase rates and may be included as part of a proposal to establish, continue, or expand energy efficiency or conservation programs. The commission by order may approve an application under this division if it determines both that the revenue decoupling mechanism provides for the recovery of revenue that otherwise may be forgone by the utility as a result of or in connection with the implementation by the electric distribution utility of any energy efficiency or energy conservation programs and reasonably aligns the interests of the utility and of its customers in favor of those programs.

Sec. 4928.6655.  (B) In accordance with rules it shall adopt, the public utilities commission shall produce and docket at the commission an annual report containing the results of its verification of the annual levels of energy efficiency and of peak demand reductions achieved by each electric distribution utility pursuant to division (A) of this section the energy efficiency and peak demand reduction requirements. A copy of the report shall be provided to the consumers' counsel.

Sec. 4928.6656.  (C) If Except as provided in section 4928.6647 of the Revised Code, if the public utilities commission determines, after notice and opportunity for hearing and based upon its report under division (B) of this section 4928.6655 of the Revised Code, that an electric distribution utility has failed to comply with an energy efficiency or peak demand reduction requirement of division (A) of this section, the commission shall may assess a forfeiture on the utility as provided under sections 4905.55 to 4905.60 and 4905.64 of the Revised Code, either in the amount, per day per undercompliance or noncompliance, relative to the period of the report, equal to that prescribed for noncompliances under section 4905.54 of the Revised Code, or in an amount equal to the then existing market value of one renewable energy credit per megawatt hour of undercompliance or noncompliance. Revenue from any forfeiture assessed under this division shall be deposited to the credit of the advanced energy fund created under section 4928.61 of the Revised Code.

Sec. 4928.6657.  (E) The public utilities commission additionally shall adopt rules that require an electric distribution utility to provide a customer upon request with two years' consumption data in an accessible form.

Sec. 4928.6658.  (e) No programs or improvements described in division (A)(2)(d) of this section implemented or undertaken to meet the energy efficiency and peak demand reduction requirements shall conflict with any statewide building code adopted by the board of building standards.

Sec. 4928.6659. The public utilities commission may require an electric distribution utility to offer energy efficiency resources and demand response resources into regional transmission organization capacity auctions if:

(A) The energy efficiency resources have been installed and the electric distribution utility can demonstrate resource ownership, provided that savings must be adjusted for regional transmission organization measurement and verification standards, have an approved measurement and verification plan approved by the regional transmission organization, and are of sufficient scale; and

(B) The demand response resources are owned by the electric distribution utility and will be available in the applicable delivery year.

The commission shall not, however, require an electric distribution utility to offer projected energy efficiency resources or demand response resources into regional transmission organization capacity auctions. The commission shall not have any authority to supervise or regulate ownership or use rights of customer-sited capabilities which are not voluntarily committed to an electric distribution utility.

Sec. 4928.6660. The energy efficiency and peak demand reduction requirements and any associated compliance requirements shall not apply after the date that any federal benchmarks requiring energy savings or peak demand reduction become effective regardless of whether the federal benchmarks specify that they have a preemptive effect on the energy efficiency and peak demand reduction requirements.

Sec. 5501.311.  (A) Notwithstanding sections 123.01 and 127.16 of the Revised Code the director of transportation may lease or lease-purchase all or any part of a transportation facility to or from one or more persons, one or more governmental agencies, a transportation improvement district, or any combination thereof, and may grant leases, easements, or licenses for lands under the control of the department of transportation. The director may adopt rules necessary to give effect to this section.

(B) Plans and specifications for the construction of a transportation facility under a lease or lease-purchase agreement are subject to approval of the director and must meet or exceed all applicable standards of the department.

(C) Any lease or lease-purchase agreement under which the department is the lessee shall be for a period not exceeding the then current two-year period for which appropriations have been made by the general assembly to the department, and such agreement may contain such other terms as the department and the other parties thereto agree, notwithstanding any other provision of law, including provisions that rental payments in amounts sufficient to pay bond service charges payable during the current two-year lease term shall be an absolute and unconditional obligation of the department independent of all other duties under the agreement without set-off or deduction or any other similar rights or defenses. Any such agreement may provide for renewal of the agreement at the end of each term for another term, not exceeding two years, provided that no renewal shall be effective until the effective date of an appropriation enacted by the general assembly from which the department may lawfully pay rentals under such agreement. Any such agreement may include, without limitation, any agreement by the department with respect to any costs of transportation facilities to be included prior to acquisition and construction of such transportation facilities. Any such agreement shall not constitute a debt or pledge of the faith and credit of the state, or of any political subdivision of the state, and the lessor shall have no right to have taxes or excises levied by the general assembly, or the taxing authority of any political subdivision of the state, for the payment of rentals thereunder. Any such agreement shall contain a statement to that effect.

(D) A municipal corporation, township, or county may use service payments in lieu of taxes credited to special funds or accounts pursuant to sections 5709.43, 5709.75, and 5709.80 of the Revised Code to provide its contribution to the cost of a transportation facility, provided such facility was among the purposes for which such service payments were authorized. The contribution may be in the form of a lump sum or periodic payments.

(E) Pursuant to the "Telecommunications Act of 1996," 110 Stat. 152, 47 U.S.C. 332 note, the director may grant a lease, easement, or license in a transportation facility to a telecommunications service provider for construction, placement, or operation of a telecommunications facility. An interest granted under this division is subject to all of the following conditions:

(1) The transportation facility is owned in fee simple or easement by this state at the time the lease, easement, or license is granted to the telecommunications provider.

(2) The lease, easement, or license shall be granted on a competitive basis in accordance with policies and procedures to be determined by the director. The policies and procedures may include provisions for master leases for multiple sites.

(3) The telecommunications facility shall be designed to accommodate the state's multi-agency radio communication system, the intelligent transportation system, and the department's communication system as the director may determine is necessary for highway or other departmental purposes.

(4) The telecommunications facility shall be designed to accommodate such additional telecommunications equipment as may feasibly be co-located thereon as determined in the discretion of the director.

(5) The telecommunications service providers awarded the lease, easement, or license, agree to permit other telecommunications service providers to co-locate on the telecommunications facility, and agree to the terms and conditions of the co-location as determined in the discretion of the director.

(6) The director shall require indemnity agreements in favor of the department as a condition of any lease, easement, or license granted under this division. Each indemnity agreement shall secure this state and its agents from liability for damages arising out of safety hazards, zoning, and any other matter of public interest the director considers necessary.

(7) The telecommunications service provider fully complies with any permit issued under section 5515.01 of the Revised Code pertaining to land that is the subject of the lease, easement, or license.

(8) All plans and specifications shall meet with the director's approval.

(9) Any other conditions the director determines necessary.

(F) In accordance with section 5501.031 of the Revised Code, to further efforts to promote energy conservation and energy efficiency, the director may grant a lease, easement, or license in a transportation facility to a utility service provider that has received its certificate from the Ohio power siting board or appropriate local entity for construction, placement, or operation of an alternative energy generating facility service provider as defined in section sections 4928.64 to 4928.6410 of the Revised Code. An interest granted under this division is subject to all of the following conditions:

(1) The transportation facility is owned in fee simple or in easement by this state at the time the lease, easement, or license is granted to the utility service provider.

(2) The lease, easement, or license shall be granted on a competitive basis in accordance with policies and procedures to be determined by the director. The policies and procedures may include provisions for master leases for multiple sites.

(3) The alternative energy generating facility shall be designed to provide energy for the department's transportation facilities with the potential for selling excess power on the power grid, as the director may determine is necessary for highway or other departmental purposes.

(4) The director shall require indemnity agreements in favor of the department as a condition of any lease, easement, or license granted under this division. Each indemnity agreement shall secure this state from liability for damages arising out of safety hazards, zoning, and any other matter of public interest the director considers necessary.

(5) The alternative energy service provider fully complies with any permit issued by the Ohio power siting board under Chapter 4906. of the Revised Code and complies with section 5515.01 of the Revised Code pertaining to land that is the subject of the lease, easement, or license.

(6) All plans and specifications shall meet with the director's approval.

(7) Any other conditions the director determines necessary.

(G) Money the department receives under this section shall be deposited into the state treasury to the credit of the highway operating fund.

(H) A lease, easement, or license granted under division (E) or (F) of this section, and any telecommunications facility or alternative energy generating facility relating to such interest in a transportation facility, is hereby deemed to further the essential highway purpose of building and maintaining a safe, energy-efficient, and accessible transportation system.

Sec. 5727.75.  (A) For purposes of this section:

(1) "Qualified energy project" means an energy project certified by the director of development services pursuant to this section.

(2) "Energy project" means a project to provide electric power through the construction, installation, and use of an energy facility.

(3) "Alternative energy zone" means a county declared as such by the board of county commissioners under division (E)(1)(b) or (c) of this section.

(4) "Full-time equivalent employee" means the total number of employee-hours for which compensation was paid to individuals employed at a qualified energy project for services performed at the project during the calendar year divided by two thousand eighty hours.

(5) "Solar energy project" means an energy project composed of an energy facility using solar panels to generate electricity.

(B)(1) Tangible personal property of a qualified energy project using renewable energy resources is exempt from taxation for tax years 2011 through 2016 if all of the following conditions are satisfied:

(a) On or before December 31, 2015, the owner or a lessee pursuant to a sale and leaseback transaction of the project submits an application to the power siting board for a certificate under section 4906.20 of the Revised Code, or if that section does not apply, submits an application for any approval, consent, permit, or certificate or satisfies any condition required by a public agency or political subdivision of this state for the construction or initial operation of an energy project.

(b) Construction or installation of the energy facility begins on or after January 1, 2009, and before January 1, 2016. For the purposes of this division, construction begins on the earlier of the date of application for a certificate or other approval or permit described in division (B)(1)(a) of this section, or the date the contract for the construction or installation of the energy facility is entered into.

(c) For a qualified energy project with a nameplate capacity of five megawatts or greater, a board of county commissioners of a county in which property of the project is located has adopted a resolution under division (E)(1)(b) or (c) of this section to approve the application submitted under division (E) of this section to exempt the property located in that county from taxation. A board's adoption of a resolution rejecting an application or its failure to adopt a resolution approving the application does not affect the tax-exempt status of the qualified energy project's property that is located in another county.

(2) If tangible personal property of a qualified energy project using renewable energy resources was exempt from taxation under this section beginning in any of tax years 2011, 2012, 2013, 2014, 2015, or 2016, and the certification under division (E)(2) of this section has not been revoked, the tangible personal property of the qualified energy project is exempt from taxation for tax year 2017 and all ensuing tax years if the property was placed into service before January 1, 2017, as certified in the construction progress report required under division (F)(2) of this section. Tangible personal property that has not been placed into service before that date is taxable property subject to taxation. An energy project for which certification has been revoked is ineligible for further exemption under this section. Revocation does not affect the tax-exempt status of the project's tangible personal property for the tax year in which revocation occurs or any prior tax year.

(C) Tangible personal property of a qualified energy project using clean coal technology, advanced nuclear technology, or cogeneration technology is exempt from taxation for the first tax year that the property would be listed for taxation and all subsequent years if all of the following circumstances are met:

(1) The property was placed into service before January 1, 2021. Tangible personal property that has not been placed into service before that date is taxable property subject to taxation.

(2) For such a qualified energy project with a nameplate capacity of five megawatts or greater, a board of county commissioners of a county in which property of the qualified energy project is located has adopted a resolution under division (E)(1)(b) or (c) of this section to approve the application submitted under division (E) of this section to exempt the property located in that county from taxation. A board's adoption of a resolution rejecting the application or its failure to adopt a resolution approving the application does not affect the tax-exempt status of the qualified energy project's property that is located in another county.

(3) The certification for the qualified energy project issued under division (E)(2) of this section has not been revoked. An energy project for which certification has been revoked is ineligible for exemption under this section. Revocation does not affect the tax-exempt status of the project's tangible personal property for the tax year in which revocation occurs or any prior tax year.

(D) Except as otherwise provided in this section, real property of a qualified energy project is exempt from taxation for any tax year for which the tangible personal property of the qualified energy project is exempted under this section.

(E)(1)(a) A person may apply to the director of development services for certification of an energy project as a qualified energy project on or before the following dates:

(i) December 31, 2015, for an energy project using renewable energy resources;

(ii) December 31, 2017, for an energy project using clean coal technology, advanced nuclear technology, or cogeneration technology.

(b) The director shall forward a copy of each application for certification of an energy project with a nameplate capacity of five megawatts or greater to the board of county commissioners of each county in which the project is located and to each taxing unit with territory located in each of the affected counties. Any board that receives from the director a copy of an application submitted under this division shall adopt a resolution approving or rejecting the application unless it has adopted a resolution under division (E)(1)(c) of this section. A resolution adopted under division (E)(1)(b) or (c) of this section may require an annual service payment to be made in addition to the service payment required under division (G) of this section. The sum of the service payment required in the resolution and the service payment required under division (G) of this section shall not exceed nine thousand dollars per megawatt of nameplate capacity located in the county. The resolution shall specify the time and manner in which the payments required by the resolution shall be paid to the county treasurer. The county treasurer shall deposit the payment to the credit of the county's general fund to be used for any purpose for which money credited to that fund may be used.

The board shall send copies of the resolution by certified mail to the owner of the facility and the director within thirty days after receipt of the application, or a longer period of time if authorized by the director.

(c) A board of county commissioners may adopt a resolution declaring the county to be an alternative energy zone and declaring all applications submitted to the director of development services under this division after the adoption of the resolution, and prior to its repeal, to be approved by the board.

All tangible personal property and real property of an energy project with a nameplate capacity of five megawatts or greater is taxable if it is located in a county in which the board of county commissioners adopted a resolution rejecting the application submitted under this division or failed to adopt a resolution approving the application under division (E)(1)(b) or (c) of this section.

(2) The director shall certify an energy project if all of the following circumstances exist:

(a) The application was timely submitted.

(b) For an energy project with a nameplate capacity of five megawatts or greater, a board of county commissioners of at least one county in which the project is located has adopted a resolution approving the application under division (E)(1)(b) or (c) of this section.

(c) No portion of the project's facility was used to supply electricity before December 31, 2009.

(3) The director shall deny a certification application if the director determines the person has failed to comply with any requirement under this section. The director may revoke a certification if the director determines the person, or subsequent owner or lessee pursuant to a sale and leaseback transaction of the qualified energy project, has failed to comply with any requirement under this section. Upon certification or revocation, the director shall notify the person, owner, or lessee, the tax commissioner, and the county auditor of a county in which the project is located of the certification or revocation. Notice shall be provided in a manner convenient to the director.

(F) The owner or a lessee pursuant to a sale and leaseback transaction of a qualified energy project shall do each of the following:

(1) Comply with all applicable regulations;

(2) File with the director of development services a certified construction progress report before the first day of March of each year during the energy facility's construction or installation indicating the percentage of the project completed, and the project's nameplate capacity, as of the preceding thirty-first day of December. Unless otherwise instructed by the director of development services, the owner or lessee of an energy project shall file a report with the director on or before the first day of March each year after completion of the energy facility's construction or installation indicating the project's nameplate capacity as of the preceding thirty-first day of December. Not later than sixty days after June 17, 2010, the owner or lessee of an energy project, the construction of which was completed before June 17, 2010, shall file a certificate indicating the project's nameplate capacity.

(3) File with the director of development services, in a manner prescribed by the director, a report of the total number of full-time equivalent employees, and the total number of full-time equivalent employees domiciled in Ohio, who are employed in the construction or installation of the energy facility;

(4) For energy projects with a nameplate capacity of five megawatts or greater, repair all roads, bridges, and culverts affected by construction as reasonably required to restore them to their preconstruction condition, as determined by the county engineer in consultation with the local jurisdiction responsible for the roads, bridges, and culverts. In the event that the county engineer deems any road, bridge, or culvert to be inadequate to support the construction or decommissioning of the energy facility, the road, bridge, or culvert shall be rebuilt or reinforced to the specifications established by the county engineer prior to the construction or decommissioning of the facility. The owner or lessee of the facility shall post a bond in an amount established by the county engineer and to be held by the board of county commissioners to ensure funding for repairs of roads, bridges, and culverts affected during the construction. The bond shall be released by the board not later than one year after the date the repairs are completed. The energy facility owner or lessee pursuant to a sale and leaseback transaction shall post a bond, as may be required by the Ohio power siting board in the certificate authorizing commencement of construction issued pursuant to section 4906.10 of the Revised Code, to ensure funding for repairs to roads, bridges, and culverts resulting from decommissioning of the facility. The energy facility owner or lessee and the county engineer may enter into an agreement regarding specific transportation plans, reinforcements, modifications, use and repair of roads, financial security to be provided, and any other relevant issue.

(5) Provide or facilitate training for fire and emergency responders for response to emergency situations related to the energy project and, for energy projects with a nameplate capacity of five megawatts or greater, at the person's expense, equip the fire and emergency responders with proper equipment as reasonably required to enable them to respond to such emergency situations;

(6) Maintain a ratio of Ohio-domiciled full-time equivalent employees employed in the construction or installation of the energy project to total full-time equivalent employees employed in the construction or installation of the energy project of not less than eighty per cent in the case of a solar energy project, and not less than fifty per cent in the case of any other energy project. In the case of an energy project for which certification from the power siting board is required under section 4906.20 of the Revised Code, the number of full-time equivalent employees employed in the construction or installation of the energy project equals the number actually employed or the number projected to be employed in the certificate application, if such projection is required under regulations adopted pursuant to section 4906.03 of the Revised Code, whichever is greater. For all other energy projects, the number of full-time equivalent employees employed in the construction or installation of the energy project equals the number actually employed or the number projected to be employed by the director of development services, whichever is greater. To estimate the number of employees to be employed in the construction or installation of an energy project, the director shall use a generally accepted job-estimating model in use for renewable energy projects, including but not limited to the job and economic development impact model. The director may adjust an estimate produced by a model to account for variables not accounted for by the model.

(7) For energy projects with a nameplate capacity in excess of two megawatts, establish a relationship with a member of the university system of Ohio as defined in section 3345.011 of the Revised Code or with a person offering an apprenticeship program registered with the employment and training administration within the United States department of labor or with the apprenticeship council created by section 4139.02 of the Revised Code, to educate and train individuals for careers in the wind or solar energy industry. The relationship may include endowments, cooperative programs, internships, apprenticeships, research and development projects, and curriculum development.

(8) Offer to sell power or renewable energy credits from the energy project to electric distribution utilities or electric service companies subject to renewable energy resource requirements under section 4928.64 4928.641 of the Revised Code that have issued requests for proposal for such power or renewable energy credits. If no electric distribution utility or electric service company issues a request for proposal on or before December 31, 2010, or accepts an offer for power or renewable energy credits within forty-five days after the offer is submitted, power or renewable energy credits from the energy project may be sold to other persons. Division (F)(8) of this section does not apply if:

(a) The owner or lessee is a rural electric company or a municipal power agency as defined in section 3734.058 of the Revised Code.

(b) The owner or lessee is a person that, before completion of the energy project, contracted for the sale of power or renewable energy credits with a rural electric company or a municipal power agency.

(c) The owner or lessee contracts for the sale of power or renewable energy credits from the energy project before June 17, 2010.

(9) Make annual service payments as required by division (G) of this section and as may be required in a resolution adopted by a board of county commissioners under division (E) of this section.

(G) The owner or a lessee pursuant to a sale and leaseback transaction of a qualified energy project shall make annual service payments in lieu of taxes to the county treasurer on or before the final dates for payments of taxes on public utility personal property on the real and public utility personal property tax list for each tax year for which property of the energy project is exempt from taxation under this section. The county treasurer shall allocate the payment on the basis of the project's physical location. Upon receipt of a payment, or if timely payment has not been received, the county treasurer shall certify such receipt or non-receipt to the director of development services and tax commissioner in a form determined by the director and commissioner, respectively. Each payment shall be in the following amount:

(1) In the case of a solar energy project, seven thousand dollars per megawatt of nameplate capacity located in the county as of December 31, 2010, for tax year 2011, as of December 31, 2011, for tax year 2012, as of December 31, 2012, for tax year 2013, as of December 31, 2013, for tax year 2014, as of December 31, 2014, for tax year 2015, as of December 31, 2015, for tax year 2016, and as of December 31, 2016, for tax year 2017 and each tax year thereafter;

(2) In the case of any other energy project using renewable energy resources, the following:

(a) If the project maintains during the construction or installation of the energy facility a ratio of Ohio-domiciled full-time equivalent employees to total full-time equivalent employees of not less than seventy-five per cent, six thousand dollars per megawatt of nameplate capacity located in the county as of the thirty-first day of December of the preceding tax year;

(b) If the project maintains during the construction or installation of the energy facility a ratio of Ohio-domiciled full-time equivalent employees to total full-time equivalent employees of less than seventy-five per cent but not less than sixty per cent, seven thousand dollars per megawatt of nameplate capacity located in the county as of the thirty-first day of December of the preceding tax year;

(c) If the project maintains during the construction or installation of the energy facility a ratio of Ohio-domiciled full-time equivalent employees to total full-time equivalent employees of less than sixty per cent but not less than fifty per cent, eight thousand dollars per megawatt of nameplate capacity located in the county as of the thirty-first day of December of the preceding tax year.

(3) In the case of an energy project using clean coal technology, advanced nuclear technology, or cogeneration technology, the following:

(a) If the project maintains during the construction or installation of the energy facility a ratio of Ohio-domiciled full-time equivalent employees to total full-time equivalent employees of not less than seventy-five per cent, six thousand dollars per megawatt of nameplate capacity located in the county as of the thirty-first day of December of the preceding tax year;

(b) If the project maintains during the construction or installation of the energy facility a ratio of Ohio-domiciled full-time equivalent employees to total full-time equivalent employees of less than seventy-five per cent but not less than sixty per cent, seven thousand dollars per megawatt of nameplate capacity located in the county as of the thirty-first day of December of the preceding tax year;

(c) If the project maintains during the construction or installation of the energy facility a ratio of Ohio-domiciled full-time equivalent employees to total full-time equivalent employees of less than sixty per cent but not less than fifty per cent, eight thousand dollars per megawatt of nameplate capacity located in the county as of the thirty-first day of December of the preceding tax year.

(H) The director of development services in consultation with the tax commissioner shall adopt rules pursuant to Chapter 119. of the Revised Code to implement and enforce this section.

Section 2. That existing sections 717.25, 1710.061, 3706.25, 4905.31, 4928.01, 4928.143, 4928.20, 4928.61, 4928.64, 4928.65, 4928.66, 5501.311, and 5727.75 of the Revised Code are hereby repealed.

Section 3. The act recodifies section 4928.64 of the Revised Code by subdividing it into the sections identified in the following table. The left-hand column identifies the sections that result from the recodification, and the right-hand column indicates the source of the resulting section in section 4928.64 of the Revised Code before its recodification. Except insofar as amendments are indicated in the resulting sections, the resulting sections are a continuation of, and are to be substituted in a continuing way for, the law as it existed in section 4928.64 of the Revised Code before its recodification.

Section 4928.64 of the Revised Code, as amended by this act, contains only division (A) of that section as it existed prior to the effective date of the amendments to that section, as well as the amendments made to that section.

Section 4. The act recodifies section 4928.66 of the Revised Code by subdividing it into the sections identified in the following table. The left-hand column identifies the sections that result from the recodification, and the right-hand column indicates the source of the resulting section in section 4928.66 of the Revised Code before its recodification. Except insofar as amendments are indicated in the resulting sections, the resulting sections are a continuation of, and are to be substituted in a continuing way for, the law as it existed in section 4928.64 of the Revised Code before its recodification.

The source of new section 4928.66 of the Revised Code is division (A)(1)(a)(second sentence) of former section 4928.66 of the Revised Code.

Section 5. To the extent that the Public Utilities Commission may have adopted, prior to the effective date of S.B. 58 of the 130th General Assembly, methods to measure alternative energy, energy efficiency, and peak demand reduction compliance that are different or inconsistent with the requirements of former sections 4928.64 and 4928.66 of the Revised Code as they existed prior to the effective date of S.B. 58 of the 130th General Assembly, such difference or inconsistency shall, for purposes of addressing all cases or controversies, be resolved by the Commission and the Supreme Court in favor of the measurement method that maximizes the amount of compliance during the period in question.