US Senate adopts 10% renewable portfolio standard

Washington (Platts)--16Jun2005

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

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

Copyright 2005 - Platts

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