Affordable, reliable energy remains vital for Ohio, especially as the state adds cutting-edge technology and data centers to its economic and manufacturing portfolio. American Electric Power (AEP), central Ohio’s major energy utility, sees energy demand doubling over the next 10 years. PJM, which helps manage Mid-Atlantic and Midwest energy markets, also projects surging demand across its 13 member states. To ensure a dependable, affordable, and dispatchable energy supply for the foreseeable future, Ohio policymakers should take a two-pronged approach to energy policy.

First, Ohio must stop subsidizing underperforming energy companies. In August, the Public Utilities Commission of Ohio (PUCO) allowed the Ohio Valley Electric Corporation (OVEC) to keep $105 million of taxpayer money because of the infamous Ohio House Bill 6. And as such subsidies continue, one estimate predicts Ohio taxpayers will spend almost $1 billion propping-up energy companies by 2030—including one in Indiana that doesn’t even contribute jobs or tax revenues to Ohio. As The Buckeye Institute has argued, backstopping private companies with public subsidies discourages those companies from becoming more productive, distorts the market and business planning, and siphons money from core government services and other more productive uses. Instead, Ohio policymakers should encourage more efficient power plants to come online and succeed on their own by ending subsidies and removing state regulations that can make it harder to build new power plants or transmit energy throughout the state. Subsidizing inefficient plants curbs new development and will exacerbate energy supply problems in the long run. 

Second, Ohio leaders—especially the state’s congressional delegation in Washington—must resist and work to repeal bad federal energy policies and regulations at every turn. The Biden administration’s extreme and misguided climate-control policies mimicking failed European diktats threaten the financial health of every American farmer, family, and factory. Federal credits and subsidies authorized in the Inflation Reduction Act should be rescinded and other federal regulations should be reviewed and reconsidered. Those that fail basic cost-benefit tests should be repealed.

Ohio policymakers should encourage new, affordable, reliable energy production across the state by ending public subsidies and deregulating powerplant and transmission line construction. Subsidizing inefficient energy producers with taxpayer money discourages new-plant builds and heavy-handed energy regulations will only make energy—and everything that it helps create—more expensive. The sooner Ohio can end energy subsidies and repeal misguided restrictions the better.

Rea S. Hederman Jr. is the vice president of policy and executive director of the Economic Research Center at The Buckeye Institute.