Dive Brief:

• Ohio Gov. John Kasich used a line item veto to nix a plan exempting power plants from property taxes, but left open the possibility to revisit the idea down the line.
• The bill, pushed for by American Electric Power and approved by both legislative houses, would have shifted more than $70 million in taxes away from generation and over to the transmission and distribution side.
• In his veto, Kasich warned more study was needed to avoid unintended consequences related to shifting tax obligations from one sector to another.

Dive Insight:

There doesn't appear to be real opposition to AEP's tax plan, just an abundance of caution on the part of Ohio Gov. Kasich.

"A larger and more thorough discussion of this issue is needed prior to the enactment of such a comprehensive change, and the administration urges the legislature and stakeholders to work with it to draft a bill to achieve this goal in the fall,” Kasich wrote in his veto.

He added: "Ohio is committed to keeping the state's electric generation competitive."

The proposal would have moved about $72 million in annual property tax obligations away from power plants and over to the distribution side, where they could more easily be passed on to consumers, according to The Columbus Dispatch. The newspaper spoke with AEP representative Tammy Ridout, who said "The House and Senate should be applauded for their work to craft a budget proposal that would help ensure Ohio’s power plants are competing on a level playing field with plants from other states."

And Ridout added the company is happy the governor “recognized the critical importance of this issue” and looks forward to discussing the idea in the future.