STATUS OF US RENEWABLE ENERGY STANDARD

Source:  AWEA  Wind Energy Weekly  May 22, 2009

House, Senate Panels Approve Modest RES; AWEA to Seek Strengthening

Key House and Senate committees took steps this week to enact a renewable electricity standard (RES) as part of comprehensive energy legislation. However, the House and Senate committee versions are weaker than what has been both sought by the wind industry and championed by the Obama Administration.

The House Energy and Commerce Committee finished action on its comprehensive bill Thursday night. The bill includes a 20% renewable electricity standard, but governors would be permitted to allow up to 8% of the standard to be met through energy efficiency improvements. The measure also includes cap-and-trade provisions to begin reducing U.S. carbon emissions.

AWEA CEO Denise Bode said, “The U.S. wind energy industry is pleased that Chairmen [Henry] Waxman (D-Calif.) and [Edward] Markey (D-Mass.) prevented further weakening of the renewable electricity standard. The RES provisions are the most immediate and direct measure in the bill to create jobs and reduce carbon emissions.”

She added, “We look forward to working with the full House to enact an RES that will provide the certainty businesses need to invest in new factories and ensure the U.S. does not cede manufacturing investment and jobs to other countries that are competing to build up their renewable energy industries.”

In an important development on Thursday, the Senate Energy and Natural Resources Committee voted down an amendment offered by Senator Jeff Sessions (R-Ala.) to strike the RES contained in the comprehensive energy bill proposed by Chairman Jeff Bingaman (D-N.M). The vote on the Sessions amendment was 9-13. Senator Evan Bayh (D-Ind.) was the only Democrat to vote in favor of the amendment.

The Senate committee did not complete action on the bill. More than 50 amendments have been filed to the RES title, and the committee will continue action after the Memorial Day Recess. As it now stands, the Senate bill requires that states meet a 15% RES by 2021. However, 4% could be supplied by energy efficiency measures.

The key question for the wind industry is whether the RES can be strengthened on the floor of the House or Senate, or in a House-Senate conference committee that would work out differences between the two bills. Most supporters of the RES in the Senate Energy and Natural Resources Committee said they would like to see an even stronger RES emerge at some point in the legislative process.

During the proceedings that unfolded this week, Senators Byron Dorgan (D-N.D.) and Maria Cantwell (D-Wash.) underscored the need to promote a diverse mix of energy sources to decrease U.S. vulnerability to fuel price spikes. Senators Debbie Stabenow (D-Mich.) and Mark Udall (D-Colo.) noted the importance of adopting a national RES to create jobs and bring capital investment to the U.S. Chairman Bingaman, in his opening remarks, mentioned the importance of passing a national RES to decrease greenhouse gas emissions, diversify our nation’s energy mix, create jobs, and decrease energy prices.

On the other side, supporters of the Sessions amendment argued that there is a need for more energy sources to be included in the RES and that the Bingaman proposal would harm consumers in the Southeast because the region lacks renewable resources.

In her opening statements Ranking Member Lisa Murkowski (R-Ark.) argued that an RES should include nuclear energy, an expansion of eligible hydroelectric resources, and unlimited energy efficiency allowances. She also expressed concerns about the effect of an RES on electricity rates, although the Bingaman proposal does include an “off-ramp” for utilities to ensure that their electricity rates do not increase by more than 4% as the result of complying with an RES.

Recently, attention has been focused on the key RES swing votes, which include Bayh, Blanche Lincoln (D-Ark.), and Sam Brownback (R-Kan.).  Prior to voting in favor of the Sessions amendment, Bayh said he may vote for the underlying energy bill. He expressed concerns that utilities in Indiana will have to pay the alternative compliance penalty to meet the national standard.  He also said that he would be offering an amendment on the floor to make the renewable energy production tax credit (PTC) permanent, though passage of such a proposal is considered unlikely. Lincoln did not appear for the markup, but voted no by proxy on the Sessions amendment. Brownback said he supports an energy bill that takes a balanced approach and does not drive up costs. He expressed his past and current support for an RES and said he would like the RES to include new nuclear facilities and perhaps coal with carbon capture and sequestration.