Senate Approves National Renewable Standard

Renewable Energy advocates won a major but tentative victory this week as the U.S. Senate voted 52 to 48 to enact a national renewable portfolio standard, a requirement mandating that utilities throughout the U.S. source at least 10 percent of their electricity production from sources like solar, wind, geothermal, and bioenergy by the year 2020.

The amendment to the broader Senate energy bill, offered by Senators Bingaman (D-NM) and Coleman (R-MN), represents the third time such a law was approved by a Senate majority. And as in congressional sessions past, it has been roundly opposed by the fossil fuel lobby, electric utilities, and the Bush Administration which believes such a measure is best left to the states. Eighteen states currently have an RPS law, many having enacted them within the past few years. This state-based support is cited as bright spot for renewable energy support and stands in contrast to resistance at the Federal level to such measures. High energy prices, mounting concerns over the national security implications of energy, and a growing interest in renewable energy as a new realm for economic growth is fueling increasing support for renewable energy. “This is just the spark we need,” said Sen. Byron Dorgan, D-N.D. who voted for the amendment. “We are dangerously dependent on foreign energy sources and this requirement will help speed up the work required to gain some independence when it comes to our nation’s energy supplies. The fact is, unless we start thinking about a new energy future, and setting some goals about how and when we ought to get there, we never will.” Renewable energy advocates and the environmental community see the amendment as one of the strongest, most progressive measures to be included in the Senate energy bill, which otherwise is tilted quite heavily towards the traditional fossil and nuclear energy industries. Renewable energy resources currently account for just over 2 percent of the nation’s electricity production, and that’s without a mandate of any kind. The 10 percent requirement, escalating from current levels today, will ensure major new investments in renewable energy by utilities. The U.S. Department of Energy will be instructed to implement a market-based trading system for renewable energy credits to help utilities meet the mandate if they haven’t made the necessary investments in renewable energy projects of their own. A total of three RPS measures were introduced by Senate lawmakers, including an ambitious 20 percent measure from Sens. Jim Jeffords, I-Vt., and John Kerry, D-Mass. Ultimately, the middle-of-the-road 10 percent mandate from Sens. Bingaman and Coleman won enough support to pass. The victory could be short lived however, as there is no such measure included in the House energy bill. If the Senate manages to pass the broader energy bill — which it has failed to do so for three congressional sessions in a row — the House and Senate side will need to be combined into one final bill to be sent to the President. “Last session, the House’s stubborn refusal to include the standard in the conference report contributed to the Senate’s ultimate rejection of the bill,” said Alan Nogee, Director, Clean Energy Program, Union of Concerned Scientists. “This year, Congress should move us toward a smarter, cleaner energy future by including the 10 percent renewable electricity standard in any energy legislation emerging from Congress.” There’s concern, bordering on hopelessness, that the RPS will be dropped during this process. “This is not assured to survive in the Energy Bill with Senate Energy Committee Chairman Domenici publicly stating that he was not committed to maintain this amendment in conference” said Scott Sklar, a renewable energy consultant and former director of two D.C.-based renewable energy trade associations. “There is much more resistance in the House of Representatives since electric utilities (IOUs) are adamantly opposed to an RPS and have close relationships with the House leadership.” Other industry sources have expressed similar doubt the measure survive all the way to the President’s desk. The industry trade associations in particular, like the American Wind Energy Association (AWEA) and the Solar Energy Industries Association (SEIA), have put most of their hope in an assortment of supportive federal tax policy. The wind power industry is almost exclusively hoping for a multi-year extension of the on-again, off-again Production Tax Credit (PTC), which could also benefit bioenergy and geothermal developments. The solar industry is looking forward to a positive vote on a 30 percent, four-year residential and commercial tax credit for solar thermal (hot-water) and photovoltaic (PV) systems. The Senate is expected to continue debating their version of the energy bill for approximately two more weeks during which time these and other renewable energy measures could materialize. A number of contentious issues still need to be resolved before the Senate is likely to pass the broad bill.
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