Senate OKs Democrat Plan for Utility Green Power
USA: June 17, 2005


WASHINGTON - The US Senate narrowly approved a Democratic plan on Thursday to require utilities to generate 10 percent of their electricity from windmills and other renewable energy sources by 2020, despite objections from the Bush administration.

 


Senators voted 52-48 to add to the energy bill a federal mandate requiring electric utilities to offer more "green" power produced from wind, solar, and biomass sources.

The bill aims to increase domestic supplies of oil, natural gas, coal, nuclear and other energy sources.

Democrat Jeff Bingaman of New Mexico, who sponsored the amendment, and other supporters said the measure would lead to cleaner air and cut consumers' energy bills by replacing more costly supplies generated from natural gas.

"Clearly, there is a savings for consumers here," Bingaman said.

Opponents, mostly Republicans, say the so-called renewable portfolio standard would spur a rash of new windmill construction and raise electric rates for US regions that lack wind energy potential -- notably the Southeast.

Utilities that cannot meet the mandate will have to buy credits from the government, which could amount to billions of dollars, said Republican Saxby Chambliss of Georgia.

"It's money that will come out of the pockets of consumers and go straight to the federal government," Chambliss said. "That makes no sense at all."

The White House said this week it opposed the renewable energy plan, saying the decision is best left to states. Twenty states, plus District of Columbia, have electric utility renewable programs, but not all have mandates.

Some windmill objections were based on aesthetics.

"They can be seen from 20 miles away and destroy the American landscape, when there's no real reason for them," said Republican Lamar Alexander of Tennessee.

It would cost utilities about $18 billion to meet the new requirements, but total costs for utilities and consumers to buy natural gas would fall by $22.6 billion, assuming that natural gas prices in 2025 cost $5 per thousand cubic feet, according to a US government analysis.

The measure has "the potential for a wealth transfer from regions of the country where renewable energy sources are scarce to regions where they are abundant," said Tom Kuhn, president of the Edison Electric Institute, which represents most US utilities.

Separately, a Senate tax panel approved a 10-year package of $14.1 billion in energy-related incentives and tax breaks that will be added to a broad energy bill now being debated.

The Senate also narrowly rejected a Democratic amendment that aimed to cut US oil import dependence by 40 percent -- or 7.6 million barrels per day -- by 2025. A requirement to cut US oil demand by 1 million bpd by 2015 remains in the bill.

The requirement for utilities to use more green energy was not included in the energy bill the House passed this year. The House bill offers about $8 billion in tax breaks and incentives to boost energy production.

After the Senate approves its energy bill, differences between the two chambers' legislation will have to be reconciled by negotiators to produce a final energy package.

 


Story by Chris Baltimore

 


REUTERS NEWS SERVICE