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Ohio Governor Blames Steel Plant Exodus on Delay of Energy Bill by House Speaker

OhioNews Bureau

ONB COLUMBUS: With the announcement that a potentially job-rich steel plant decided to pull the plug on locating in Ohio because of electric rate uncertainty, Gov. Ted Strickland, who had called for his energy plan to be passed by the legislature last year, laid the blame of the job losses on Ohio House Speaker Jon Husted for delaying the passage of the bill.

The company considering Ohio was Steel Development LLC, a scrap-based still mill owned by a group of American and European steel executives. The group was exploring Ohio for its $1 billion facility that would have employed 500 people, according to a report in the Mansfield News Journal (MNJ).

A steel plant official said the uncertainty of knowing what the cost of electricity would be over a multi-year period was reason enough to look elsewhere. The steel plant, which uses electric StricklandStricklandarc furnace technology to turn scrap metal into flat-rolled steel to be used in domestic infrastructure.

"We should have been able to give that company that information. If this bill had passed expeditiously, as I had asked, if it had been dealt with in a timeframe that I think was appropriate, we may have saved this $1 billion investment." [Gov. Strickland, MNJ]

With Ohio’s economic conditioning looking pale from the loss of so many jobs over the years – it had a net loss in 2007 of 12,200 non-farm jobs – combined with a projected budget deficit in mid 2009 of between $733 million and $1.9 billion, letting hundreds of good paying jobs slip away because electric rate information wasn’t given is another blow to the Buckeye State’s midsection.

It experienced similar heartache last year when it lost out to Virginia as the site for an expansion of Rolls-Royce’s North American operations.

WAS DESIGN OF DELAY FOR DOLLARS?

Strickland’s comprehensive energy bill was introduced last fall and passed the Ohio Senate in late October. The Ohio House, under Speaker Husted’s leadership, decided to slow walk it, some say, to coax contributions from interested parties like FirstEnergy Corp., American Electric Power Co. and Duke Energy to Republican Senate and House campaign coffers.

Husted, a term-limited Republican from Dayton who has plans HustedHustedto run for the Senate and who is rumored to have his eye on the office of secretary of state in 2010, has delayed the bills transit through the lower chamber by refashioning it in ways that will surely result in future negotiations with Strickland and the Senate.

REPUBLICANS GO GREEN

While the House version of the energy bill has yet to address the areas of marketing and regulation that the Senate version spoke to, Husted seems to have gotten religion on alternative energy. As recently as today, reports show Husted has crafted a new bill that doubles down on renewable energy provisions and imposes fines on utilities that don't meet specific benchmarks.

Husted's born-again calling to the tangible benefits that could be realized from promoting the further deployment of renewable energy from wind and solar, among other alternative energy sources, is gaining cheers from environmental and consumer groups who historically saw Republicans as a backstop for the interests of big energy producers.

The Republican plan Husted is steering contemplates the imposition of fines on utilities -- who would be prohibited from passing them onto consumers -- who fail to meet specific renewable energy benchmarks.

"Punishment has always been a good incentive for me in life." [House Speaker Jon Husted, Toledo Blade]

Normally left standing at the altar in energy debates, the Ohio Consumers’ Counsel (OCC), the state’s residential OCCOCCenergy advocate, commended Husted for “adding important details to ensure economic benefits will be gained for consumers and businesses” that will “capture the untapped potential for green energy and technologies available to reduce our usage.”

The OCC said in a press release that Husted’s “inclusion of benchmarks to ensure that utilities make needed progress and the adoption of a more ambitious energy efficiency standard matter greatly and will help lawmakers and consumers send the message that they care about managing the costs of power, both on their monthly bills and on the environment.”

This may be fine and dandy for 2025, but for 2008 and the near future, the announcement that a major employer has turned the lights out on Ohio because politicians have delayed passage of such an important bill is not the news Strickland and state officials want to send to other prospective employers, who may see what happened to Steel Development and decide not to even bother spending time in Ohio.

John Michael Spinelli is a former Ohio Statehouse government and political reporter and business columnist. He now serves as the OhioNews Bureau Chief for ePluribus Media Journal. Find ONB archives here.

If readers have a news tip or story idea about Ohio politics or government, contact the OhioNews Bureau at: ohionews@epluribusmedia.org

Comments

National Planning Commission

We're wasting enormous resources as a nation.

We have empty housing stock and industrial plants in one state, and yet we're busy bulldozing farmland to build more housing in another. I really think we need a National Planning Commission to look at the US, assess future growth, and try to encourage effective reuse of existing plants and housing.

Different states have different assets. And yet, as far as I cant ell, we seem to be encouraging the worst growth possible across the nation.

Planning in Ohio

is still very unfocused from a central planning standpoint. Government, by and large, is merely a zoning referee for private sector interests. Illinois actually has a planning statute that provides some thoughtful checks and balances to how development occurs.

A couple years ago, an Ohio House subcommittee issued a report on growth and land use. It incorporated comments from a broad cross section of the public, from individual citizens to government planners to thoughts from think tank researchers. The buzzword then, as it is now, is "urban sprawl," the term that describes the seemingly unfettered rambling expansion of tract housing and retail development, whether needed or wanted, onto farmland because its cheaper to build out than up. Of course, as outward expansion occurs, and builders and contractors are applauded for this effort by elected officials who benefit from campaign contributions from this sector, strains on services are experienced. From basics like police and fire, to infrastructure basics like water and sewer to servicing new further-out developments with roads able to accommodate the expansion, tax bases are challenged.

In a nutshell, it recommended the following:
1) Urban Homestead Zones;
2) New Funding Source for Agriculture Easement Purchases;
3) Impact fees for counties and townships;
4) Impact fees for Public School Districts;
5) Expanding transfer of development rights;
6) Planned County status;
7) Reauthorization of the Clean Ohio Fund;
8) Township land use plans;
9) Township subdivision regulation;
10) Township zoning;
11) State Tax Credits for Historic Rehabilitation;
12) Equalizing Community Reinvestment Act tax breaks for rehabilitation;
13) More Accessible financing for rehabilitation and Infill developments;
14) Zoning for aggregate facilities;
15) Protect our farmland

To my mind, based on my fairly extensive travels in Europe, the lost child in all this growth is the complete absence of public transportation. As a nation, we are devoted to cars. We have sacrificed rail and bus systems on the altar of car manufacturers, the petroleum class that fuels them and the road-builder complex that builds the spider web of roads necessary to have it all work.

Ohio has done little to really incorporate Smart Growth policies in top-down legislation. With the housing bubble now bursting, we're seeing that suburban homeowners are as likely as urban dwellers to fall victim to home foreclosures. We know from the example of Portland, Oregon what a comprehensive, smart planning system can do to stop "sprawl" from ruling the day. But Portland remains an exception to the rule of most government planning bureaus that seem to exist to assist private sector developers in building what ever they want where ever they want because they've gotten financing from some bank or lender.

Maybe the housing crisis will bring a halt to farmer Jones' land turning into a thousand roof tops overnight. The Surge in Iraq was designed to give Iraq government leaders the space to make important government decisions. Maybe the surge in home foreclosures will give space for a new look at the quality and quantity of growth.

Kicked in the Head

Jimmy Carter tried to get people to turn down their thermostats, put on a sweater, and drive 55 to conserve oil. He pretty much got vilified for it. Mass transit does play a role. Rail transport is heating up as gas prices make transporting goods over rail cheaper. If the pattern holds, there won't be any way around a new national transit program.

Great American Streetcar Scandal ...

From Wiki:

The Great American Streetcar Scandal, also known as the General Motors streetcar conspiracy, was the sequence of events in which General Motors, Firestone Tire, Standard Oil of California and Phillips Petroleum formed the National City Lines (NCL) holding company, which acquired most streetcar systems throughout the United States, dismantled them, and replaced them with buses in the early 20th century. The scandal alleges that NCL's companies had an ulterior motive to forcibly gain mass use of the automobile among the U.S. population by buying up easy-to-use mass light rail transportation countrywide and dismantling it, leaving populations with little choice but to drive.

By the time the scandal was brought to court and its perpetrators identified and penalized, its intended result had already been achieved. The judge presiding thought that the scandal was of little real consequence: GM was fined $5,000 and each executive was ordered to pay a fine of $1.

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If it's true that our species is alone in the universe, then I'd have to say that the universe aimed rather low and settled for very little. ~ George Carlin

A Natonal Transit Program

would be too good to believe. In 1977, I got my first job in Ohio government, working in the Ohio Senate. It was during this time I recall that the Ohio Rail Development Authority was established. Thirty-one years later, I may be wrong, but I don't think a single mile of track has been put down. This is how blind we seem to be in this state and this country to rail transportation.

Discussion about what should be in a stimulus package to take us out of the path of an oncoming, speeding recession has touched on the need to update our infrastrucutre; reflective of the spirit embodied in FDR's Civilian Conservation Corps. Sure, bridges and roads need repair and updating. If I were the next president, I'd pursue a national rail program with the same zeal that President Eisenhower pursued in the 50s to build out of a national highway system. We could reduce tonnage on our roads, increase passenger traffic, allow people to live in one location and work in another, and redesign our urban areas around rail nodes. Most important of all, it would be a huge job creator -- after all, we Italians and Chinese and other immigrant labor groups built the first transcontinental railroad. I'm sure there would be no shortage of workers who would do the same today.

As for President Carter, I always thought he was doing the right things. But political conservatives have rewritten his history to make it seem like he was a southern Don Quixote tilting at energy windmills. As we see from columnist Paul Krugman's article today, Carter's administration actually outperformed those of Reagan and Bush One in growth rate. But history has been unkind to him. The media only remembers the rise in oil prices from the first oil embargo that came at the end of his term, stagflation (which were sort of in now) and the debacle of the Iranian hostages.

France, along with other European countries, has a great rail transit system. Now, as their high-speed TVG trains gain in popularity, they have an aggressive program to extend them to all parts of the country. About the size of Texas, France knows it has a good thing and is rail expansion plans are just another example of what good, public-interested government can do when good people are working in it.

But after 31 years of no light rail, let alone high-speed rail in Ohio, I find it totally unrealistic that the oil and auto lobbies wouldn't fight to the death to stop any roll out of a national rail transit system as you've envisioned.