If you’ve been involved with an Ohio energy project at any time over the past few decades, you may already be familiar with the Ohio Air Quality Development Authority (OAQDA), which marks its 50th anniversary this year. But for two important reasons, the OAQDA could become much more prominent over the next year.
The OAQDA was established in 1971 under Chapter 3706 of the Revised Ohio Code (RC) to help the state meet the requirements of the recently enacted Federal Clean Air Act. The main mission of the agency was to act as an intermediary issuer of bonds for “air quality installations” that reduce or prevent air pollution. Under RC 3706.041, eligible installations are then exempt from national and local tax on the sale and use of tangible movable property as well as from property tax for the duration of the obligation. The OAQDA is currently managing this funding and tax reduction mechanism as part of its “Clean Air Improvement Program” (CAIP). It also offers grants to small businesses to help them cover eligible costs of air quality projects through its Clean Air Resource Center.
The OAQDA has successfully used its interim bond funding authority over the years to support millions of dollars of investments in Ohio. But 2021 may be its biggest year yet, for two main reasons:
- Renewable energies at the utility scale: The OAQDA has historically funded small-scale renewable energy projects, generally located on company premises. However, 2020 marked the first time that the OAQDA has accepted a request to issue bonds for a “utility-scale” renewable energy project, generating megawatts of clean electricity for the market. large rather than for on-site use in a single property. This new option has caught the attention of utility-wide renewables developers since the Ohio wholesale electricity market regulator, PJM, recently acknowledged that the OAQDA would likely not trigger restrictions on a project’s participation in the wholesale capacity market under its minimum bid price rule. (MOPR). In contrast, PJM has indicated that it will apply MOPR restrictions to clean energy projects receiving a tax rebate available through the separate Ohio Payment in Lieu of Taxes mechanism. Although the proposed changes to MOPR policy may make this distinction less important in the long run, at this time, the OAQDA CAIP represents a potential avenue to avoid this regulatory restriction on participation in the wholesale market.
- Electric vehicle charging: The broad statutory definition of “air quality installation” gives the OAQDA great flexibility to support new technologies that are entering the market and that can improve air quality. This specifically includes electric vehicle (EV) chargers and associated infrastructure, which can be described as “[a]ny good, device or equipment related to the recharging or refueling of vehicles that promotes the reduction of atmospheric contaminant emissions into the ambient air through the use of an alternative fuel. . . or the use of a renewable energy resource ”according to RC 3706.01 (G) (11). With the fall in the price of electric vehicles and the increase in the momentum of adoption of electric vehicles to reduce greenhouse gas emissions, the deployment of electric vehicle charging equipment is starting to accelerate in the world. Ohio. The OAQDA program may offer a way to further accelerate this progress, particularly if an applicant is eligible for the agency’s small business grants.
OAQDA has been a somewhat silent workhorse supporting clean air investments in Ohio for several decades. But as energy technologies and markets evolve, the financial and tax benefits offered under the Clean Air Improvement Program can become useful for an even wider range of projects.
 https://www.pjm.com/-/media/markets-ops/rpm/rpm-auction-info/non-binding-mopr-subsidy-opinions.ashx. While not a formal and binding determination, it is the result of a binding decision by the Federal Energy Regulatory Commission in File No. EL21-35-000 which organized a similar program in Virginia ne could not be characterized as a “state subsidy” triggering MOPR.