Monday, April 23, 2007

State Renewable Energy Standards Move Forward - Is a Federal RES Next?

2007 is shaping up to be an active year for Renewable Energy Standard (RES) policies, with RES legislation moving forward in several states this year and both chambers of Congress considering federal legislation.

As reported previously, several states, including Minnesota, New Mexico and Colorado all recently passed legislation increasing their existing, successful state Renewable Energy Standard Policies. In addition, RES policies are moving forward in several new states, including Oregon, Virginia, Indiana and New Hampshire.

  • Oregon's Senate passed SB 838, the Oregon Renewable Energy Act with a bi-partisan 20-10 vote on April 10th. SB 838 requires Oregon utilities to get 5% of their electricity from new renewable energy sources by 2011, 15% by 2015, 20% by 2020, culminating in a 25% by 2025 standard. Small utilities are only required to get 5% of their electricity from renewables by 2020 (currently the cut-off is for utilities serving less than 5% of state load).

    SB 838 moved to the House last week were the House Energy and Environment Committee heard testimony on the bill during three public hearings. The committee is expected to hold work sessions this week to hear amendments before passing the bill on the House floor. A floor vote is expected by the end of next week.

    See a series of previous posts here at Watthead for more on the Oregon Renewable Energy Act.

  • Virginia became the first state in the South to enact a RES policy on April 4th. Both chambers of the Virginia General Assembly passed an electricity “re-regulation” bill that includes a utility-endorsed, non-binding RES “goal” for 12% of electricity to come from renewables by 2022.

    While a non-binding goal (similar to RES goals currently in place in Vermont and
    Illinois), the policy is notably for being the first in a Southern state setting renewable energy generation goals [excluding Texas I suppose].

    Additionally, Dominion Energy, the state's largest utility has said they plan to meet the goals, and while non-binding, the policy does including financial incentives to meet the goals, which could ensure an effective policy. Every time a utility hits one of the incremental targets, it can increase its base rate of return on equity by 0.5%, increasing the likelihood that utilities will work toward the goals and buy more wind and other renewables.

  • Just one day after Virginia enacted their RES legislation, the New Hampshire House of Representatives passed a Renewable Energy Standard bill with an overwhelming margin of 253-37.

    The RES would require New Hampshire to generate 16 percent of the state's energy from new renewable resources such as wind, solar, biomass and hydro by 2025. Because the state already generates about 6 percent of its electricity from renewable resources, the final share of renewables will be about 22-25 percent by 2025.

    New Hampshire is currently the only state in New England without an RPS, but that looks like it will change soon. The bill now moves on to the state Senate where it is expected to pass with a strong majority. The RES bill also has the support of Governor John Lynch who is expected to sign the bill when it reaches his desk.

  • Indiana is also considering a 10% by 2025 Renewable Energy Standard. The RES bill passed the Indiana House by a vote of 77-20 last week, according to this blurb.

    [Unfortunately, I don't know much more than that about Indiana's bill... Anybody have any more details?]

  • Together, the wide variety of state action on Renewable Energy Standard bills this year should redraw the map of states with mandates supporting for renewable energy development. Currently, 21 states and the District of Columbia have mandatory RES policies in place, while two others have non-binding goals. The inclusion of Oregon, Virginia, New Hampshire and Indiana would push this number to 24 states with mandatory RES policies and 3 with non-binding goals, representing a majority of U.S. states and a vast majority of the United States population and energy consumption (see map below).

    [Image: Current and Proposed State Renewable Energy Standard Policies - April 2007 (Click to Enlarge)]

    And with Congress considering a federal RES policy this year, we could be entering the end game for Renewable Energy Standard policies in the U.S. On the House side, Congressman Tom Udall (D-NM) has introduced a 20% by 2020 national RES bill [see previou s post] and Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (also D-NM) has indicated his committee is planning to discuss a 15% by 2020 standard. Senators Harry Reid (D-NV), Olympia Snowe (R-ME) and Dick Durbin (D-IL) have circulated a letter of support for a "strong" federal RES policy which has now been signed by 50 senators.

    The success of state RES policies has clearly proven that an RES is an effective policy for driving renewable energy development and has paved the way (finally) for federal action.

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