Senate Bills Kick Up New Efforts to Establish Federal Renewable Mandate

Legislative efforts to establish a federal renewable electricity standard (RES) kicked up last week with the separate introduction of two bills by Senate Democrats.

Sens. Tom Udall (D-N.M.), Mark Udall (D-Colo.), and Ben Cardin (D-Md.) on Oct. 29 introduced the Renewable Electricity Standard Act of 2013 (S.1595), a bill that would create a national standard of 25% renewable energy generation by 2025. The Udalls, who are first cousins, had previously introduced a version of the 25%-by-2025 bill while members of the House of Representatives in 2002.

Their bill would essentially set a 6% requirement by 2014, followed by gradual increases thereafter to meet the 25% by 2025 goal. It allows suppliers to meet the federal requirements by purchasing credits from other entities that have earned them by producing renewable energy. The RES also allows utilities to bank credits for four years and to borrow them from up to three years in the future. Municipal and other publicly owned power plants and rural electric co-ops would be exempted from the requirements.

On Oct. 31, Sen. Ed Markey (D-Mass.) introduced the American Renewable Energy and Efficiency Act (S.1627), which also proposes requiring electric utilities to obtain a minimum of 25% of their power from renewables by 2025. That bill, however, also requires electric and natural gas utilities to implement energy efficiency programs that would save the equivalent of 15% and 10% of sales, respectively, by 2025.  

Currently, 30 U.S. states and the District of Columbia have mandatory renewable electricity targets and 24 states have energy efficiency requirements. Markey’s bill is backed by a number of renewable energy industry groups such as the American Wind Energy Association, the National Hydropower Association, and the Solar Energy Industry Association.

Markey said in a statement that the time was right to propose a federal RES because “Solar panel prices have declined 75% over the last three years, and wind power has become cheaper than conventional energy from the grid in New England and many other parts of the U.S.” The bill would ensure that the U.S. “is at the forefront of this economic boom and that American consumers enjoy the benefits.”

According to Nancy Pfund, managing partner of investment firm DBL Investors, the bill could establish a “predictable market” for renewables and energy efficiency. “While many states have instituted their own renewable portfolio standards, the absence of a national standard in the United States has hampered the emergence of a national market and resulted in many renewable investments flowing to other countries,” she said.

Sonal Patel, associate editor(@POWERmagazine, @sonalcpatel)