Comprehensive Energy Package Moves to Senate Floor

Senator Bingaman will propose a 15% by 2020 national Renewable Energy Standard be amended to the comprehensive energy package. All being debated on the Senate floor today

A new comprehensive energy package is being debated on the Senate floor today. The legislation incorporates a number of previously introduced bills. Those that work from four different Senate committees. Also it is being presented as an amendment to HR 6. For that’s the CLEAN Energy Act of 2007 previously passed by the House in January during the ‘First 100 Days’ push.

The CLEAN Energy Act shifts roughly $14 billion in oil and gas industry subsidies to fund future legislation. Thereby supporting clean energy investments. For that’s including energy efficiency and renewable energy.

Basics

Under a renewable energy portfolio standard (RPS), retail electricity suppliers (electric utilities) must provide a minimum amount of electricity from renewable energy resources. Moreover or purchase tradable credits that represent an equivalent amount of renewable energy production. In addition, the minimum requirement is often set as a percentage share of retail electricity sales. More than 20 states have established an RPS. That’s also with most targets ranging from 10% to 20%. Most importantly and most target deadlines ranging from 2010 to 2025.

As NREL puts it:

A renewable portfolio standard (RPS) is a regulatory mandate. Especially to increase production of energy from renewable sources. For that’s such as wind, solar, biomass and other alternatives. All to fossil and nuclear electric generation. It’s also known as a renewable electricity standard. Don’t agree with nuclear at all. For that’s twisted.

Furthermore, most states have established tradable credits. For that’s as a way to lower costs and facilitate compliance. Finally, State RPS action has provided an experience base. That’s for the design of a possible national requirement.

Contrarians

RPS proponents contend that a national system of tradable credits would enable retail suppliers in states with fewer resources to comply. That’s at the least cost. All by purchasing credits from organizations in states with a surplus of low-cost production. Opponents counter that regional differences in availability. Also amount and in types of renewable energy resources. All that would make a federal RPS unfair and costly.

Senate

In Senate floor action on H.R. 6 in the 110th Congress, S.Amdt. 1537 proposed a 15% RPS target. The proposal triggered a lively debate. However it was ultimately ruled non-germane.

In that debate, opponents argued that a national RPS would disadvantage certain regions of the country.  For that’s particularly the Southeastern states.

They contended that the South lacks a sufficient amount of renewable energy resources. Especially to meet a 15% renewables requirement.

They further concluded that an RPS would cause retail electricity prices to rise. That’s for many consumers.

Implementation Issues

Having adequate transmission capacity to accommodate generation from renewable resources is important. Especially for the success of an RPS. States with successful RPSs. That’s either have adequate transmission available. That’s also plans to build it.

Ratepayer impacts of an RPS can also derail its adoption politically. A counterbalance to the impacts on ratepayers. Moreover that is RPS mandates can hurt.  All when they are usually to drive local economic growth.

Under a well designed RPS.

That’s costs which are shared fairly. That’s by all ratepayers. Another way to address ratepayer impacts. For that’s to include provisions in the RPS. All to prevent costs. Especially from escalating excessively.

State RPS Action

In the late 1990s, many states began to restructure their electric utility industries to allow for increased competition. Some of the states with this newly “restructured” system established an RPS as a way to create a continuing role for renewable energy in power production.3 Some states without a restructured industry also began to adopt an RPS. The total number of states with an RPS has grown steadily.

RPS Action

In June 2007, the Federal Energy Regulatory Commission (FERC) reported that 23 states and the District of Columbia had an RPS in place.4 That’s collectively covering about 40% of the national electric load.5 Mandatory state RPS targets range from a low of 2% to a high of 25%.

However, most targets range from 10% to 20%. Also and are scheduled to be reached between 2010 and 2025. Although this emerging “tapestry of state programs” continues to spread to more states. That’s the majority of recent actions have been to increase and accelerate previously established standards.6

Most states have a similar definition of eligible renewable resources. Those that covers wind, solar, geothermal, biomass. Also and several forms of water-based power. For that’s including hydropower, current, wave, tidal, and ocean power.7

At least 19 of the 23 states allow some form of credit trading. Non-compliance penalties range from about one cent per kwh to 5.5 cents per kwh. There are significant regional differences in resource availability. As shown in the previously cited FERC map, most states in the Southeast and Midwest regions do not have an RPS requirement. Several states have broadened their RPS provisions to allow certain energy efficiency measures and technologies to help satisfy the requirement.8

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