OHIO LEGISLATIVE SERVICE COMMISSION
Office of Research Legislative Budget
www.lsc.ohio.gov and Drafting Office
H.B. 201 Final Analysis
135th General Assembly
Click here for H.B. 201’s Fiscal Note
Primary Sponsors: Reps. Hillyer and Demetriou
Effective date: March 28, 2024
Effective date:
Kathleen A. Luikart, Research Analyst
Amanda Goodman, Attorney
SUMMARY
Motor vehicle energy source and emissions standards
 Prohibits a state agency, township, or county from restricting the use or sale of a motor
vehicle based on the energy source used to power the motor vehicle
 Prohibits the Ohio Environmental Protection Agency or any other state agency from
adopting any motor vehicle emissions standards that are established by California as a
result of California having received a waiver to adopt stricter standards than those
required by the federal Clean Air Act (“California emissions standard”).
Infrastructure development rider definition changes
 Changes the definition of “infrastructure development” in the law governing
infrastructure development riders (IDRs) to mean constructing, upgrading, extending, or
any other investment in, or associated with, natural gas company (company) owned
transmission or distribution facilities.
 Excepts from the definition of “infrastructure development” costs associated with
establishing or upgrading any connections with any source of supply to serve an
economic development project (EDP), including interstate or intrastate pipelines,
regardless of the facilities’ ownership.
 Changes the definition of “infrastructure development costs” (ID costs) to mean costs
associated with an investment in “infrastructure development” (defined above) to
which either of the following applies:
 The investment is for any deposit required by the company, as defined in the line-
extension provision of the company’s tariff, less any contribution in aid of
construction received from the owner or developer of the project.
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 The investment is designed to provide natural gas service to a site or EDP supported
by JobsOhio, any JobsOhio network or regional partner, or the Department of
Development (DEV).
 Provides that ID costs include all of the following:
 Planning, development and construction costs, including costs incurred prior to the
approval of an EDP by the Public Utilities Commission (PUCO) under the act;
 Costs associated with establishing or upgrading any connections with any source of
supply to serve an EDP, including interstate or intrastate pipelines, regardless of the
facilities’ ownership (these costs are specifically excluded from the “infrastructure
development” definition);
 A return on all ID costs equal to the company’s return on equity authorized in the
company’s most recently approved rate case under continuing law (in utility rate
cases, return on equity is usually a higher return than overall rate of return, and is
usually a component used to calculate the overall rate of return, which is what
ongoing Ohio law requires to be approved in rate cases).
Infrastructure development rider
 With respect to an application for an IDR to recover prudently incurred ID costs of one
or more EDPs, the act does the following:
 Prohibits PUCO from accepting an application for “ID costs” (instead of an IDR
application) for an investment designed to provide natural gas service to a site or
EDP supported by JobsOhio, any JobsOhio network or regional partner, or DEV,
unless the company has obtained notification from one of those entities or the DEV
Director that the EDP should be considered.
 Prohibits PUCO from approving an EDP application that includes ID costs for an
investment designed to provide natural gas service to a site or EDP supported by
JobsOhio, any JobsOhio network or regional partner, or DEV and is filed beyond
March 28, 2030.
 Allows, notwithstanding the prohibition, recovery of ID costs for any approved EDP
filed by March 28, 2030, to continue until all costs eligible for recovery under the act
are recovered.
Regulatory deferrals and carrying costs
 Requires PUCO, upon request by a company, to approve a regulatory deferral, including
carrying costs, for the IDR revenue requirement in any year when approved customer
charges exceed, or are expected to exceed, $1.50 per customer per monthly billing
period.
 Specifies that carrying costs be calculated as follows:
 At the company’s cost of long-term debt approved in its most recent rate case;
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 If the company does not have a PUCO-approved cost of long-term debt, requires the
company to propose a rate for the carrying cost and allows it to propose a rate or
methodology for calculating carrying costs that differs from its cost of long-term
debt approved in its most recent rate case.
 Limits what may be considered a part of the cost contributing to the excess in customer
charges to new costs from that year and excludes costs from previous years from
contributing to that amount, unless they are associated with a previously approved
deferral under the act’s regulatory deferral provision for IDRs.
 Requires PUCO to permit the company to collect any deferred and unrecovered ID costs
in the subsequent year and continuing thereafter, not to exceed five years, if the IDR
rate does not exceed the $1.50 per customer per monthly billing limit in continuing law.
 Specifies that once costs have been applied to an approved regulatory deferral, the
costs remain as part of the deferral and may not be reallocated to a future deferral
application.
 Requires PUCO to permit carrying costs to accrue until the entirety of the regulatory
deferral and all carrying costs have been recovered, or until the deferral is terminated
either by PUCO order, court order, or by the end date in the approved deferral.
 Permits PUCO to grant a deferral for any number of years up to five years, after PUCO
approves the deferral.
 Prohibits any remaining unrecovered costs from being subject to a future deferral, a
rate case, or other cost recovery mechanism after the deferral period granted by PUCO
has ended.
EDP application
 Permits a company to file an application with PUCO for approval of an EDP for which the
company will incur ID costs.
 Repeals the specification that a company that has a project application for SiteOhio
certification can also apply for an EDP.
 Specifies that applications for EDP approval must contain a description of certain items
required under ongoing law, but “to the extent applicable.”
 Regarding EDP application approval, specifies only that PUCO may approve an EDP that
involves ID costs described as an investment for any deposit required by the company,
as defined in the line-extension provision of the company’s tariff, less any contribution
in aid of construction received from the EDP owner or developer, but only if the ID
costs:
 Exclude a return on all ID costs equal to the company’s return on equity authorized
in the company’s most recently approved rate case under continuing law; and
 Are projected to generate a return on investment that is less than the most recently
authorized return on equity.
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Collection of unfunded ID costs
 Permits PUCO to approve the collection of any ID costs that are not funded by a
disbursement from the All Ohio Future Fund or through another approved rider or rate
mechanism.
 Permits a company that is prohibited as described above from recovering ID costs for a
particular site or project in an IDR to recover ID costs for other sites or EDPs under an
investment designed to provide natural gas service to a site or EDP supported by
JobsOhio, any JobsOhio network or regional partner, or DEV that do not satisfy the
requirements in the dot point immediately above.
PUCO annual report
 Requires PUCO to annually submit a report to the General Assembly describing the
following:
 The number of “applications for ID costs” (not applications for IDRs) and how many
of those were approved;
 The monetary amount approved for recovery through each company IDR and the
total monetary amount approved for recovery through all IDRs for all companies;
 The number of approved EDPs on which all construction has been completed;
 A list containing the construction status of all approved EDPs, including those that
have not begun construction, or if construction has begun but not completed, a
description of any structures on which construction has been completed.
TABLE OF CONTENTS
Motor vehicle energy source and emissions standards ................................................................. 5
Infrastructure development rider (IDR) overview .......................................................................... 7
Definition changes ....................................................................................................................... 7
Infrastructure development ................................................................................................... 7
Infrastructure development costs (ID costs) .......................................................................... 8
JobsOhio or DEV supported projects .............................................................................................. 8
Six-year period for EDP approvals .................................................................................................. 9
Regulatory deferrals and carrying costs ......................................................................................... 9
EDP application ............................................................................................................................. 10
Collection of unfunded ID costs ................................................................................................ 11
PUCO annual report ...................................................................................................................... 11
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DETAILED ANALYSIS
Motor vehicle energy source and emissions standards
The act prohibits a state agency, township, or county from restricting the use or sale of a
motor vehicle based on the energy source used to power the motor vehicle, including an
energy source used for propulsion or used for powering other functions of the motor vehicle.
It also prohibits the Ohio Environmental Protection Agency or any other state agency
from adopting any motor vehicle emissions standards that are established by California as a
result of California having received a waiver1 to adopt stricter standards than those required by
the federal Clean Air Act (“California emissions standard”). The federal Clean Air Act (with the
U.S. EPA’s approval) allows California to enact stricter emissions standards for new motor
vehicles. Federal law prohibits any other state from enacting stricter emissions standards on
their own. However, a state may elect to voluntarily opt-in to the California standards.2
Beginning in 1990, the California Air Resources Board (“CARB”) adopted stricter emissions
standards (low-emission vehicle (“LEV”) regulations) requiring automobile manufacturers to
introduce “progressively cleaner light- and medium-duty vehicles with more durable emission
controls from the 1994 through 2003 model years.” Since then, CARB has continued to adopt
stricter motor vehicle greenhouse gas emissions standards, including (1) creating tiers of exhaust
emission standards for increasingly more stringent categories of low-emission vehicles,
(2) requiring motor vehicle sales to phase-in a progressively cleaner mix of vehicles from year to
year, and (3) a requirement that a specified percentage of passenger cars and light-duty trucks be
zero-emission vehicles (“ZEVs”) with no exhaust or evaporative emissions.3
The most recent changes4 in 2022 to California’s emissions standard generally require:5
1 See the U.S. EPA’s page on Vehicle Emissions California Waivers and Authorizations, which may be
accessed by conducting a keyword “vehicle emissions California waivers and authorizations” search on
U.S. EPA’s website: epa.gov.
2 See Clean Air Act, Section 219; 42 United States Code (U.S.C.) §7589.
3 See CARB’s page on Low-Emission Vehicle Program, which may be accessed by conducting a keyword
“low-emission vehicle program” search on the CARB website: ww2.arb.ca.gov/ and then clicking on
“About.”
4See CARB’s publication, The California Low-Emission Vehicle Regulations (PDF), which may be accessed
by conducting a keyword “low-emission vehicle program” search on the CARB website: ww2.arb.ca.gov/
and then clicking on “LEV Regulations & Test Procedures” and then “The California Low-Emission Vehicle
Regulations for Passenger Cars, Light-Duty Trucks and Medium-Duty Vehicles, including all or portions of
Sections 1900, 1956.8, 1960.1, 1960.5, 1961, 1961.1, 1961.2, 1961.3, 1961.4, 1962, 1962.1, 1962.2,
1962.3, 1962.4, 1962.5, 1962.6, 1962.7, 1962.8, 1965, 1976, 1978, 2037,2038, 2062, 2101, and 2235 title
13, California Code of Regulations, as of November 30, 2022.”
5See CARB’s page on Going Zero, which may be accessed by conducting a keyword “going zero” search
on the CARB website: ww2.arb.ca.gov/.
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1. All California sales of new passenger cars and trucks to be ZEVs (i.e., electricity or
hydrogen) by 2035;
2. All California sales of new medium and heavy-duty vehicles to be ZEVs by 2045;6
3. Required percentages of new vehicle sales, beginning in 2026, to be ZEVs or plug-in
hybrid electric vehicles (PHEVs), as shown in the chart below.7
As of May 13, 2022, 17 other states have adopted California’s LEV criteria pollutant and
greenhouse gas emission regulations, and all but two of those states have adopted California’s
ZEV regulations8 under the Clean Air Act.9
6 See California’s Executive Order N-79-20 (PDF), which may be accessed on California’s Office of the
Governor website: https://www.gov.ca.gov by clicking on “Newsroom” and then conducting a keyword
“low carbon fuel standard” and then clicking on “Governor Newsom Announces California Will Phase
Out Gasoline-Powered Cars & Drastically Reduce Demand for Fossil Fuel in California’s Fight Against
Climate Change.”
7 See CARB’s page on Advanced Clean Cars II, which may be accessed by conducting a keyword
“advanced clean cars” search on the CARB website: https://ww2.arb.ca.gov/.
8 See CARB’s website, States that have Adopted California’s Vehicle Regulations and the publication
States that have Adopted California’s Vehicle Standards under Section 177 of the Federal Clean Air Act
(PDF), both of which may be accessed by conducting a keyword “states that have adopted California’s
vehicle regulations” search on the CARB website: ww2.arb.ca.gov/, and then clicking on the first and
second link respectively.
9 See Clean Air Act, Section 177; 42 U.S.C. §7507.
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Infrastructure development rider (IDR) overview
The act revises the law governing the application for and appro