January 15, 2008

One-size RPS does not fit all

Roger Kranenburg

A better solution

There are better ways to expand the use of renewables. Federal tax credits and increased funding for research and development are key. A long-term extension of the Production Tax Credit (PTC) could be the single most effective thing Congress could do to promote renewables.

Unlike the leading RPS proposals, the PTC is a proven means of actually getting renewable generation built and brought on-line. The current PTC is due to expire on December 31, 2008. In the past, the short-term, start-and-stop nature of the tax credit has dissuaded utilities, developers, manufacturers, and investors from maximizing the potential of renewable technologies and resources, where they are available. Extending the credit for at least five years will give the private sector the stability necessary to plan and finance renewable energy projects.

The nation’s electric utility companies support the development and greater use of renewable energy sources. Renewables, along with the full range of other climate-friendly technologies—including nuclear, energy efficiency, clean coal, carbon capture and storage, and plug-in electric hybrids—must be a part of the industry’s long-term approach to meeting the country’s steadily growing demand for electricity.

But renewables must be encouraged where they make economic sense. For this reason, a federal mandate that forces all states to generate an arbitrary amount of electricity from them, regardless of states’ individual resources, is bad for electricity customers and providers alike.

To learn more about the electric utility industry’s efforts to provide a reliable, affordable, and environmentally sensitive electricity supply, please visit www.getenergyactive.org.

—Roger Kranenburg (rkranenburg@eei.org) is director, business development for the Edison Electric Institute (www.eei.org).