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. |