US Senate adopts 10% renewable portfolio standard
The US Senate voted 52-48 to add to the comprehensive energy bill under debate a mandate for utilities to get 10% of their retail power from renewable energy sources by 2020. Utilities required to meet the renewable portfolio standard, which would ramp up in four stages, would be those selling more than 4-mil MWh a year. Utilities that are unable to meet the RPS by producing renewable generation would either buy such power from other producers or purchase credits from the Dept of Energy at a cost of up to 1.5 cts/kWh. Amendment sponsor Sen Jeff Bingaman (New Mexico), the ranking Democrat of the Senate Energy and Natural Resources Committee, said the RPS would place pressure on natural gas prices and save ratepayers money while creating a national market for domestic renewable technologies. But committee Chairman Pete Domenici (Republican-New Mexico) and other Republican members came out against the measure as an added cost to consumers on top of the $2-bil productive tax credits given to wind and other renewable energy sources in the bill. Domenici said the RPS would pit "wind poor" states against "wind rich" states and that the bill is "doing enough right now with this enormous credit." Meanwhile, Sen Lamar Alexander (Republican-Tennessee) said the amendment would cost consumers $18-bil and subsidize the construction of gigantic unsightly wind turbines. Bingaman said that, although the Dept of Energy's Energy Information Administration found the RPS would cost the power sector about $18-bil between 2005-2025, the proposal would actually save all end-users $22.6-bil in natural gas spending for that period. The EIA, in its June 15 letter to Bingaman, also said cumulative residential spending on power would be $2.7-bil less while gas spending would be cut by $2.9-bil for that period. The House energy bill passed in April contains no such RPS and leaders in that chamber have said they will oppose the provision. The Bush administration has come out against an RPS as an added cost on consumers, but praised the Senate proposal to extend the renewable energy production tax credit. This story was originally published in Platts Electricity Alert http://www.electricityalert.platts.com
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