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Battle over renewables shuts Pennsylvania government  

A fight over renewable energy and biofuels led to a temporary shutdown of Pennsylvania’s state government and, despite a compromise being reached, the opponents will resume battle in September.

At issue is Governor Edward Rendell’s energy independence strategy to promote renewables, energy conservation and biofuels. The Democratic governor hoped to fund an $850 million effort through a surcharge of 0.05 cents/kWh on utility bills, but Republican Senate leaders who oppose taxes resisted the idea.

They also objected to measures requiring utilities to opt for conservation and renewables when customer load grows. And they opposed requiring utilities to install ‘smart’ meters that allow customers to see time-of-day prices and cut usage accordingly.

A political battle of wills ensued, with the governor refusing to endorse the law-makers’ state budget. Without a budget in place, the state was forced to halt many services on 9 July before the sides reached a compromise.

In that accord, legislative leaders agreed to fund a $750 million programme using existing tax sources, rather than a utility surcharge. They will also pass a bill clarifying the existing Alternative Energy Portfolio Standard. Some had interpreted it to require solar to comprise 0.5% of renewables by 2020, or roughly 80MW, but the new law requires solar to contribute 0.5% to total power generation by 2020 – approximately 800MW, explained John Hanger, president of Citizens for Pennsylvania’s Future, based in Harrisburg.

A special legislative session on energy, beginning on 17 September, will address other issues. Hanger expects a fight on conservation and meters because “electric companies want consumers to use more and more electricity”, and “they want to keep end users dumb and blind”.

The Energy Association of Pennsylvania, representing utilities, denied opposing clean energy, but argued against artificial mandates. “If you rely on wind units, which run 25% of the time, you’re sacrificing reliability,” said Michael Love, president of the Harrisburg-based group.

He added that smart meters should go mainly to large users, which are positioned to make meaningful energy reductions.

Environmental Finance

12 July 2007

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