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ISSUE: RPS RENEWABLE ENERGY

Introduction

Renewable Energy Sources – Meeting Rising Energy Demand Without Harming the Environment

Renewable energy describes the energy generated by wind, sun, water, plant growth, and geothermic heat that is then converted into power for our everyday use. As the term suggests, this energy is generated from sources we can tap into again and again. Renewable energy can supply a significant portion of the United States’ energy needs, and create public benefits, including environmental improvement, increased fuel diversity, national security, and economic development. These benefits, however, are often not reflected in the prices paid for energy, placing renewable energy at a disadvantage when competing against fossil fuels and nuclear power. That’s where renewable portfolio standards come in – they are an effective tool that states can use to boost the renewables market.

RPS – The Path to Sustainability

A Renewable Portfolio Standard (RPS) ensures that a minimum amount of renewable energy is included in the portfolio of the electricity resources serving a state. Most RPS laws require states to increase the percentage of renewable power sources used from the current amount to between 10 and 20 percent over about 20 years. Increasing the required amount of renewable power required over time allows industry to grow into the demand and can put the power industry on a path toward increased sustainability. RPS laws ensure that states will have a diverse energy portfolio to protect us into the future.

Sixteen states currently have RPS laws, and they have been proposed in at least ten other states. Below is a sampling of these bills; for a complete listing, please see the following resources:

Non-Legislative Action

Several states, including Arizona, New Mexico, and New York, have adopted or proposed a RPS through rule-making rather than legislative action. New Mexico’s RPS has since been updated legislatively by NM SB 43.

Existing State Laws

California

On September 12, 2002, Governor Gray Davis signed SB 1078, which requires California to generate 20 percent of its electricity from renewable energy no later than 2017. The 20 percent standard is the most stringent renewable portfolio standard (RPS) to date in the United States. The new law requires sellers of electricity at retail to increase their use of renewable energy by 1 percent per year. Since California already generates about 10 percent of its electricity consumption by renewables, the new law will nearly double the state’s existing base of wind, geothermal, biomass, and solar energy resources.

SB 1478, introduced in 2004, advances the deadline for achieving a 20 percent renewable portfolio from 2017 to 2010; the bill also provides that a renewable energy project may only receive an award of Supplement Energy Payments (SEP) if the project is selected by an investor-owned utility (IOU) pursuant to a competitive solicitation or by other retail electricity providers through a solicitation process.
Status: Vetoed by Governor, 9/24/04.

Hawaii

Signed into law on June 25, 2001, HB 173 (Act 272) establishes goals for the implementation of renewables portfolio standards by electric utilities; the bill also requires electric utilities to develop and make available net energy metering contracts to eligible customer-generators. The requirement is for net energy generation of about 7 percent statewide.

Signed into law on June 6, 2004, SB 2474, requires electric utilities to meet a renewable portfolio standard of 15 per cent for 2015 and a goal of 20 per cent for 2020; the bill also directs the Public Utilities Commission to study the feasibility of implementing a rate structure to encourage the use of renewable energy.

Nevada

In 1997, Nevada passed a Renewable Portfolio Standard as part of their 1997 Electric Restructuring Legislation (AB 366), which requires any electric providers in the state to acquire actual renewable electric generation or purchase renewable energy credits so that each utility has 1 percent of total consumption in renewables.

In June 2001, Nevada Gov. Kenny Guinn signed what was then the country’s most aggressive renewable portfolio standard into law. SB 372 requires that 15 percent of all electricity generated in Nevada be derived from new renewables by the year 2013.

Rhode Island

Rhode Island’s RPS was established in 2004 by H 7375 and S 2082 and requires that 16 percent of the state’s electricity comes from renewable sources by 2019.

Connecticut, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Jersey, Texas, Vermont, and Wisconsin also have RPS laws.

Introduced State Legislation

Colorado

Introduced in 2004, HB 1273 requires investor-owned electric utilities to meet a renewable portfolio standard by generating or acquiring specific amounts of renewable energy each year from now through 2020. The specific amounts are 500 megawatts by 2006; 900 megawatts by 2010; and 1,800 megawatts by 2020.
Status: In Senate; held over 3/8/04.

Ohio

Introduced May 2003, SB 93 requires an electric utility or electric services company to derive at least a portion of its electricity supply from specified types of renewable energy sources, including new sources; prescribes the minimum percentage of a utility’s or company’s calendar year electricity supply that must come from renewable energy sources, beginning in 2006 at 3% of its total annual retail electric sales, and topping at 20% in 2020 and subsequent years; specifies renewable energy supply purchases, photovoltaic system subsidies, net metering system connections, and renewable energy credit use as activities qualifying as compliance with the renewable energy requirement; and, authorizes the Public Utilities Commission to establish a system of renewable energy credits and to enforce the renewable energy requirement.
Status: In Senate Committee on Public Utilities: Heard, 6/24/03.

Pennsylvania

Introduced 11/24/03, SB 962, which contains a strict definition of renewable energy resources, agressively pursues renewable energy development; the bill requires that nine percent of the state’s electricity come from renewables by 2015, with the percentage increasing by one percent each year thereafter.
Status: Referred to Consumer Protection and Professional Licensure, 11/24/03.

Washington

HB 2333, introduced in 2004, would require electric utilities to use eligible renewable resources or acquire equivalent renewable energy credits, or a combination of both, to serve at least fifteen percent of its annual retail load by 2023.
Status: Passed to Rules Committee for second reading. 2/10/04

Delaware, Georgia, Florida, Kansas, Missouri and Nebraska also saw RPS introductions in the 2003-2004 session.

This page was last updated on September 30, 2004.

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