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Senate Energy Committee Reviews Proposal for Federal Renewable Standard

The U.S. Senate Energy and Natural Resources Committee on Tuesday heard the testimony of five witnesses in its review of a draft federal renewable electricity standard that could require that 20% of the nation’s power be produced by renewable energy sources by 2021.

Legislation to implement a federal renewable electricity standard is one of President Barack Obama’s highest priorities, said Committee Chair Sen. Jeff Bingaman (D-N.M.) in his opening remarks. Ranking member Sen. Lisa Murkowski (R-Ala.) noted that 28 U.S. states and the District of Columbia had so far implemented renewable portfolio standards (RPSs), but she stressed it was imperative to address how a “one-size-fits-all” standard would fit regional energy supply disparities.

In the previous Congress, the House passed a federal standard that would have set a target of 15% by 2020 and would have allowed up to 4 percentage points of that requirement to be met with energy efficiency measures. The RPS provision in that bill stalled negotiations between the parties, however. The Bush administration had also threatened to veto it.

But a similar bill has a better chance of passing now, analysts say, owing to a Democratic majority in Congress and President Obama’s pledge to push for a 25% mandate, with a 10% standard achieved early in the next decade. Attempts to push the standard are already under way: Last week, Representatives Edward J. Markey (D-Mass.) and Todd Platts (R-Pa.) introduced The American Renewable Energy Act (PDF). If passed, the legislation would require the nation to produce 25% of its electricity from clean sources by 2025 and would take effect in 2012.

The Democratic staff draft for Sen. Bingaman’s proposed Renewable Electricity Standard (PDF) reviewed Tuesday by the senatorial committee requires utilities to ensure that a certain percentage of electricity sold was derived from renewable sources. Per the draft, that minimum would be 4% between 2011 through 2012, and 8% through 2015.

The five witnesses at the Senate’s Committee Hearing on Tuesday included Public Service Enterprise Group (PSEG) CEO Dr. Ralph Izzo and Don Furman, an executive from Iberdrola Renewables. Also present was David Wright, commissioner at the South Carolina Public Service Commission (PSC), Scott Jones, an executive at the Forest Landowners Association, and Dr. Lester Lave, a professor of economics at Carnegie Mellon University.

PSEG’s Izzo testified that, although in the long term a federal RPS would prompt utilities to increase their investment in renewables, in the short term it would increase customer costs. But, he said, a national approach is the most effective way to minimize costs. “A federal program will create economies of scale, and it will reduce the cost of capital once developers can rely on a stable, national market for renewable energy credits, or RECs,” he said. “I believe that by establishing a robust national RPS program, we will begin to move toward a single REC market as state policymakers eventually elect not to maintain separate regional renewable energy ‘currencies.’ ”

South Carolina’s Commissioner Wright said that renewable energy could play an important part in the nation’s energy future. “But what is it that the country really needs? Is it energy independence? Is it a reduced carbon footprint? Is it greenhouse gas–free energy? Like many, I believe it makes sense to do the best we can to achieve all of the above. But at what price? Additionally, to remove political influences, or the artificial ‘feel-good’ nature a RPS might bring, you should consider relying on sound science as you craft a policy,” he told the panel.

The commissioner agreed with Izzo that consumer costs would rise. However, he attributed those increases to a uniform mandate that would fail to recognize significant differences among the states in terms of available and cost-effective renewable sources. Not all states—particularly those in the Southeast and Midwest—have abundant traditional renewable energy resources like wind and geothermal, or have them located close enough to the load center to render them cost-effective, he said.

“If we are going to have renewable portfolio standards, they should be politically sustainable, and take into account what best efforts can achieve in each state, given its potential for renewable energy,” Wright said “Federal policy should give states the flexibility to promote renewable energy in a way that doesn’t undercut the higher priority of reducing carbon emissions cost-effectively.”

Professor Lave, meanwhile, urged the committee to focus on reducing carbon dioxide emissions with a carbon portfolio standard rather than “singling out renewables as the answer.” He said there are “significant savings from letting all technologies compete in satisfying the goals of lowering greenhouse gas emissions, increasing environmental quality more generally, increasing energy security, and improving sustainability.”

Lave also pointed to technical difficulties of connecting large amounts of wind and solar energy into the national grid. “In general wind and solar power are not available when demand is highest. Wind tends to be strongest at night and lowest in the summer. Solar power is best in the summer, but the Arizona data show that the arrays have all but stopped producing electricity by 5 PM in the summer, just as demand is hitting its peak,” he said.

One solution to the problems of relying on renewables was to increase research into energy storage. “Pumped hydro storage is the best way to store electricity, but few new sites are available. Compressed air storage looks promising, but is expensive and less efficient than pumped hydro,” he said.

Sources: Senate Energy and Natural Resources Committee, North Carolina State University, U.S. House of Representatives

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