Senate proposal seeks more solar, wind power
WASHINGTON, Jun 16, 2005 -- AFX-Asia
Senators debating a national energy bill proposed on Thursday legislation that would increase five-fold the amount of electricity utilities generate using renewable resources.
The figures exclude hydroelectric power, which accounts for about 10% of the nation's electricity supply.
Though the Energy Department estimates such a law would cost utilities $18 billion to implement, supporters say it would chop about $22.6 billion from end-users' electricity and natural gas bills.
"Clearly there is a savings here for the consumer," Bingaman said during the Senate floor debate.
Industry impact
Bingaman's proposal would apply to utilities that sell more than 4 million megawatt hours of electricity per year.
The Edison Electric Institute, a lobby group that represents the investor-owned companies that serve almost 70% of all U.S. electricity market, said the proposed rule would affect nearly all of its members.
Additionally, the proposal would require issuing credits to utilities which meet the requirement, in turn allowing them to trade or sell the credits to those who do not. The credits would be capped at 1.5 cents per kilowatt hour.
Overall, the measure would raise electricity sales from renewable-fuel power plants to 68,000 megawatts between 2008 and 2025, enough to power 56 million homes, adding 0.18%, or less than one fifth of a penny, to every dollar consumers now pay toward their energy bill, Bingaman said.
Senators Jim Jeffords, I-Vt., and John Kerry, D-Mass., would like to push utilities even harder and have readied a separate amendment that would require them to generate 20% of their electricity from wind, solar, or geothermal resources by 2020.
Margin of victory may matter
Bingaman, long a champion of efforts to replace coal and natural gas-fired power generation with domestic renewable energy sources, hopes to draw support from Republican colleagues representing states that already have comparable renewable energy mandates, including Norm Coleman, R-Minn., and Susan Collins, R-Maine.
History does not favor the proposal, however. The Senate has twice before adopted a so-called federal renewable portfolio standard only to see it later stripped from energy legislation during House-Senate negotiations.
Any renewable energy mandate passed by the Senate would come up for debate again when the House and Senate sit down to iron out differences in their two versions of energy bill. The House's energy bill proposal, passed in April, does not include a renewable portfolio standard for utilities.
Opponents of the proposal argue it would raise energy bills in states lacking wind power facilities or adequate biomass supplies.
The Bush Administration said this week would oppose a federal mandate for power generators but nevertheless believes states have the right to impose alternative energy requirements on in-state utilities. Texas adopted a renewable portfolio standard in 1999 when President Bush was governor.
"States will do it on their own as it fits their needs," said Sen. Larry Craig, R-Idaho.
More than a dozen other states already have minimum renewable fuel requirements for their utilities. But supporters in the Senate argue a national standard is needed to spur significant development of renewable energy in the U.S., reducing the utility industry's demand for high-priced natural gas, and cutting harmful greenhouse gas emissions in the process.
Instead of a renewable portfolio mandate, the White House has urged the Senate to expand a renewable tax credit for power generators using alternative energy sources.
The Senate is expected to follow the administration's request and extend the tax credit as part of a $16 billion package of energy tax breaks expected to be attached to the Senate energy bill next week.
This story was supplied by MarketWatch. For further information see www.marketwatch.com .
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