In Uncertain Odds, A Bold RPS Bill Announced

This week debate begins in the U.S. Senate on H.R. 6, the comprehensive Federal energy bill. If they haven’t already, lawmakers from both sides of the aisle are putting forward various bills and amendments that could be included in the broad policy package. Among them, two Senators teamed up to introduce an amendment that would require utilities in every state to source 20 percent of their energy from renewable sources.

The national Renewable Portfolio Standard (RPS) amendment, introduced by Sens. Jim Jeffords, I-Vt., and John Kerry, D-Mass, creates a renewable energy standard under which utilities would be required to gradually increase the amount of electricity produced from renewable energy resources, starting at 2.5 percent in 2006 and leveling out at 20 percent in 2020. “Currently less than two percent of the electricity generated in our country is produced by clean, renewable energy sources,” said Jeffords, the ranking member of the Senate Environment and Public Works Committee. “This amendment will harness under-utilized renewable energy sources and reduce harmful air and water pollution from coal and other fossil fuels. It is time for Congress to realize that renewable energy is the long-term solution to our dependence on foreign oil.” An RPS will promote the development of wind, solar, geothermal and certain types of biomass energy. Essentially most renewable resources that could create electricity. Different utilities would likely leverage their different resources in their respective states. And much like the market-friendly cap and trade systems that have successfully lowered power plant emissions, the RPS would provide a flexible, system of tradable credits by which utilities can achieve these renewable energy requirements. The utilities that exceed their own requirements for renewable energy could essentially sell their excess green energy to other utilities that are trying to meet the requirement. While most energy companies and utilities are traditionally against such a mandatory requirement, they will at least get credit for their existing renewable energy production. The bill will also allow states to set standards higher than the Federal requirements. California, for example, passed a strong statewide RPS that calls for the same 20 percent requirement of the state’s utilities by an even earlier date of 2017. There are 18 other states with similar RPS requirements, although most are not as strong as California’s. Speaking of States, however, the Bush Administration has made its views clear on a national RPS. This week, in a statement intended for congressional lawmakers the Bush Administration said RPS standards should not be supported at the Federal level. “The Administration would oppose amendments to set a national renewable portfolio standard (RPS) on power generation and believes these standards are best left to the States,” said the Statement of Administration Policy from Bush Administration. “A national RPS could raise consumer costs, especially in areas where these resources are less abundant and harder to cultivate or distribute.” The next few days, weeks, or months could determine if this RPS, or any others, make it to the bill’s final form. Even then, other issues could drown the bill like they have in years past. “Consumers shouldn’t have to struggle through another year of record-breaking gas and electric bills before Congress sees the light,” said Senator Kerry. “By setting an achievable standard now and gradually increasing our share of renewable energy sources, this is a common-sense way to get our energy priorities in order.”


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