Despite Changes,US Renewable-Pwr Mandate Still Faces Hurdles
05 Juni 2009 - 5:15PM
Dow Jones News
Despite whittling down a proposed federal renewable-energy
mandate to a fraction of its previous strength, Sen. Jeff Bingaman,
D-N.M., still faces a tough sell to gain enough support for
passage.
Narrow votes on amendments to the proposal in the Senate Energy
and Natural Resources panel Thursday outlined the hurdles the
legislation faces, first in a committee vote and then to the
chamber floor as part of a broad energy bill later this summer.
Bingaman's proposal requires utilities to provide an increasing
percentage of power from sources such as wind, sunshine and
geothermal energy. The mandate starts at 3% in the first 2011-2013
compliance period and rises to 15% by 2021. To help companies meet
the standard, they're allowed to buy renewable-energy credits or
pay a 2.1 cents-a-kilowatt-hour fee. In addition, states can allow
up to a quarter of the requirement can be met through energy-
efficiency gains.
Some Democrats want to strengthen the bill, saying that it has
been watered down too much and offering amendments to raise the
target to 25% by 2025 or strip out the efficiency-offsets
provision. Those amendments were withdrawn but will likely be
offered again when the broader energy bill comes to the Senate
floor.
"It's simply not bold enough," said Sen. Robert Menendez, D-N.J.
Given inclusion of efficiency credits, the fact that new nuclear
power won't be accounted in the mandate, and small utilities are
exempt, Menendez said the actual renewable mandate will translate
into a 9% requirement in 2021.
Bingaman, like some Democrats, would like much higher targets.
The committee chairman, having weathered a raft of unsuccessful
attempts to pass a renewable mandate in the Senate in previous
years, calculated his compromise as the path to passage.
Although Bingaman may want to push for a 25% standard, "he just
recognizes the balance that has to be maintained if we're really
going to move anywhere," said Sen. Sam Brownback, R-Kan. More
stringent standards would translate into higher utilities bills,
and, "boy, if that starts to happen to too many people, I think you
lose the whole thing."
Many Republicans and some Democratic Senators - particularly
from southeastern states that don't have the same natural renewable
energy endowments others have - want to include nuclear power in
the mandate or boost the amount credit companies can get for
energy-efficiency gains. Although both options would lead to a cut
in greenhouse-gas emissions and address energy-security concerns,
critics say they would dilute incentives for fueling a "green
economy."
Signaling the close vote expected on the floor, the amendments
to include nuclear power and boost efficiency failed in the
committee by 12-11 votes.
The GOP is also pressing for expanded oil and gas access in
federal waters, beyond simply a new inventory of resources that
Bingaman has currently offered.
The renewable mandate is part of a bigger package, said ranking
member Sen. Lisa Murkowski, R-Alaska. "You have to remember that
this is not just in a vacuum," she told reporters when asked if she
would support the chairman's compromise.
"We need a meaningful domestic production piece," Murkowski
said.
Robert Dillon, spokesman for the panel's minority, said, "Some
members said if they could get some real production out of this,
they could hold their noses and vote for the renewable
mandate."
The panel will next week consider the oil and gas segment of the
energy bill.
The committee did approve a Republican amendment that would
allow companies to seek temporary relief from the mandate if
bottlenecks in transmission prevented renewable-production growth.
Energy analysts warn that a lack of grid capacity represents one of
the biggest barriers to renewable-energy growth in the years
ahead.
Murkowski said there was also potential for wide support for an
amendment that would allow 100% of the target in the first few
years of the program to be met through efficiency gains.
Southern utility companies, including Duke Energy Corp. (DUK)
and Southern Co. (SO), have lobbied against a federal renewable
portfolio standard, saying it would put an unfair burden on states
and consumers.
Wind turbine manufacturers such as GE Energy, a unit of the
General Electric Co. (GE), India's Suzlon Energy (532667.BY) and
Denmark's Vestas Wind Systems (VWS.OS), as well as solar firms such
as Norway's Renewable Energy Corp. ASA (REC.OS), and
U.S.-headquartered First Solar Inc. (FSLR) and Evergreen Solar Inc.
(ESLR) would benefit under a renewable portfolio standard.
Bingaman said he hoped to pass the entire bill out of committee
next week.
-By Ian Talley, Dow Jones Newswires; (202) 862 9285;
ian.talley@dowjones.com