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Renewable portfolio standard likely flashpoint in Congress  

Washington, D.C. – When lawmakers reconvene next week, they will take up new energy legislation designed to promote energy independence and curb greenhouse gas emissions. But the debate over whether the government should put in place a so-called renewable portfolio standard is likely to be a significant flash point in the discussions.

The RPS would require utilities to use a minimum percentage of clean power–such as wind, hydropower or solar energy–in their overall fuel mix, or it would require electric companies to buy renewable credits from each other.

In a letter to Senate leaders last week, nearly 200 companies, industry groups and environmental organizations urged lawmakers to implement a renewable portfolio standard in new energy legislation.

“We believe the time has come for Congress to move quickly to enact national RPS legislation,” said the letter signed by General Electric, Google, Shell’s wind energy division, BP America and the Sierra Club, among others. “Although more than 20 states have adopted individual RPS programs, the country will not realize the full potential for renewable electricity without the adoption of a federal program to enhance the states’ efforts.”

Sen. Jeff Bingaman, D-N.M., the chairman of the Senate Energy and Natural Resources Committee, plans to soon introduce a measure that would establish a national RPS of 15% by 2020. Half the Senate has already voiced its opinion in favor of a national standard. A report in March by the research firm Wood Mackenzie concluded that a federal RPS would not only lower greenhouse gas emissions but would also reduce the cost of natural gas.

So what seems to be the holdup? Division within the utility industry itself, for one thing.

While heavyweight companies such as Edison International, Pacific Gas & Electric and Sempra Energy have all signed the letter calling for a national RPS, many others have not, such as Duke Energy and Southern Co.

Others like Chicago-based Exelon support a national standard of 15% by 2020, but they also want to make sure states get credit for their own standards as well.

Most of the states that have adopted their own renewable fuel standards are in the Southwest and Pacific Northwest–where there seems to be a great potential for renewables–or in the heavily populated Northeast. But virtually none of the states in the Southeast or Great Plains have an RPS in place.

“The federal government could step in after the fact and disrupt activity with the states, even with the best of intentions,” says Dan Riedinger, spokesman for industry group Edison Electric Institute, which represents investor-owned utilities such as Constellation Energy Group and DTE Energy.

Duke Energy, the largest electricity provider, is considering implementing its own renewable standard. The company points out on its Web site that a national standard “might fail to recognize what works in California or Texas might not work at all in Ohio or North Carolina.”

There also seems to be some push-back from the states themselves. The National Association of State Regulatory Utility Commissioners has not taken a formal position on the matter because it does not have consensus among its members. “Because resource portfolio decisions have traditionally been made by the state regulators, states should be given flexibility as they attempt to ensure that renewable resources are appropriately utilized in providing retail electric service,” the association says on its Web site.

Bingaman plans to introduce the measure on the Senate floor rather than in committee, where he is likely to encounter opposition from several members, most notably Sen. Pete Domenici, R-N.M., the committee’s ranking member, who is Bingaman’s sometime ally on energy issues. But on the floor, the possibility of a filibuster remains, even though a Bingaman spokesman says he feels “we’re in a good place” to garner the 60 votes necessary to override a filibuster.

While measures supporting a national RPS have cleared the Senate before, it is doubtful whether such a bill would clear the House. A national standard did not pass there before, even with the backing of Energy and Commerce Committee Chairman John Dingell, D-Mich. It remains unclear whether the House version of an energy package, to be taken up this year, will include a renewable portfolio standard.

By Brian Wingfield

Forbes

30 May 2007

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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