The head of the U.S. Senate’s Energy and Natural Resources Committee acknowledged Sunday there’s a tough road ahead for legislation he has introduced that would push utilities to generate more of their electricity from clean energy sources.
The so-called Clean Energy Standard is considered vital for the future development of wind energy, creating a mandate similar to the Renewable Fuel Standard that has propelled the ethanol and biodiesel industries in the transportation sector. Iowa wind interests consider a clean electricity standard important in creating a market for some of the surplus wind that would be transported into states with a need to meet an environmental mandate.
Senator Jeff Bingaman, Democrat-New Mexico, unveiled a bill on March 1 that would create a so-called clean energy standard. He made his comments on Platts Energy Week, an all-energy news and talk show.
“I don’t have a lot of illusions that we’re going to get this passed through the Senate and through the House and to the president for a signature this year,” Bingaman told the Platts Energy Week program. “But I think it’s an important piece of legislation to have out there, and have discussed, and I am optimistic that something akin to this will be enacted, if not in this Congress, then in the next Congress, or the Congress after that.”
The bill would require utilities to generate an increasing amount of their electricity from clean sources such as wind and other renewables, nuclear power, and natural gas – starting at 24% in 2015 and climbing 3% annually to 2035.
In January 2011, President Barack Obama called on utilities to generate 80% of their electricity from low-carbon energy sources by 2035.
Bingaman, who is retiring after 30 years in the Senate at the end of 2012, said it’s taken more than a year to hammer out a consensus on what the legislation should look like.
“We’ve been, frankly, trying to get a consensus on how to design the clean energy standard,” he said. “Much of the last several months was spent on that…If we can make progress in this Congress, great, if we can’t, at least it will be there for consideration from future Congresses.”
He acknowledged that the main targets of the legislation – utilities – have not welcomed it warmly, though referred to the feedback he’s received as “cautiously optimistic.”
“I don’t think they’re clamoring to endorse the idea,” Bingaman said. “At the same time, I think some of them have indicated that they think this could be the type of design that would make sense.”
Senator Lisa Murkowski, Republican-Alaska, has already come out against the bill. The top Republican on the Senate Energy Committee has said it would force utilities to use more expensive renewable energy, when there are already incentives to encourage companies to use cheap natural gas.
Bingaman said incentives exist in his legislation for multiple clean energy sources.
“I think this proposal does encourage them to move toward less carbon dioxide emissions and they could do that by moving from some of their high-emitting power generation now to more use of natural gas,” he said. “…They can also do it by moving even to less emissions, and zero emissions, generation, which of course is renewable energy or nuclear. I think there is an incentive for them to move in all those directions.”
The U.S. Energy Information Administration (EIA) is analyzing the effect Bingaman’s bill would have on the industry, particularly electricity prices. A report is expected in a few weeks.
An EIA report released in December found that a clean energy standard in general would have little effect on prices in the first 10 years of its implementation, but then boost prices up to 21 percent above 2011 levels in the second decade, by 2035.
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