In Defense of State Renewable Portfolio Standards

To those sustainable energy advocates who are witnessing and defending against the attacks on the federal Renewable Fuels Standard (RFS), it should come as no surprise that similarly misguided assaults are being directed at state-adopted Renewable Portfolio Standards (RPS).

An RPS (sometimes referred to as a Renewable Electricity Standard, or RES) is a policy designed to increase electricity generation from renewable resources, including wind, solar, geothermal, biomass, and in some cases, certain types of hydroelectricity, landfill gas, municipal solid waste, marine energy and energy efficiency. This policy requires or encourages electric utilities to supply a certain minimum share of their electricity from eligible renewable resources by a certain year.

Currently, 29 states and the District of Columbia carry an RPS, and while programs vary widely from state to state in structure, enforcement mechanisms, size and application, most aim to encourage the development and use of renewable energy resources. (Another five states have renewable electricity goals.) As a result, says the DOE’s Energy Information Administration, states with RPS policies have seen an increase in the amount of electricity generated from eligible renewable resources.

Why is an RPS important? Because well designed policies that encourage renewable energy development are helping create a sector that boosts the economy. More renewable energy leverages investment, creates jobs and helps the environment.

Yet, there are efforts in a number of states that would re-impose a “business-as-usual” approach to energy development and repeal, reduce or freeze existing RPS targets in numerous states. Groups such as the American Legislative Exchange Council (ALEC), a coalition of conservative state legislators, and the Heartland Institute, an equally conservative think tank that has written model legislation that is being touted by ALEC to repeal standards in targeted states, claim RPS policies are costly and hurt business growth.

The strongest threats to state Renewable Portfolio Standards currently appear to be in North Carolina, Missouri, Kansas and Arizona. Other states with reported anti-RPS activity include Montana, Wisconsin, Michigan, Ohio, Pennsylvania, Washington and Oregon. Some shots have also been fired in Texas, Massachusetts and Connecticut. In Virginia, where there is no mandate, the state attorney general is leading an effort to repeal the state’s modest renewable energy goal.

In North Carolina, the chairman of the House Public Utilities Committee says he will push a bill that would freeze the state’s modest renewable energy standard. The state’s current RPS is three percent, but would grow another three percent every three years until it reaches 12.5 percent in 2021. Those supporting the freeze say it eliminates the state picking “winners and losers” in the North Carolina energy sector. Renewable energy advocates in the state are mounting a campaign to oppose the freeze, citing the RPS’ role in diversifying the state’s energy capabilities, creating jobs and enhancing energy security, all at a relatively low cost – an argument they say is strong enough to keep the “freeze” bill from gaining ground.

Elsewhere, an Arizona Corporation Commissioner has introduced a measure that would change the way the state’s largest utility calculates the amount of total power consumption before applying the state’s renewable energy standard of 15 percent by 2025. The proposal would exclude retail sales to its largest customers of 3 megawatts or more in demand when calculating its compliance with the renewable standard. Critics of the plan say it would effectively cut the standard of 15 percent down to 13.5 percent. While the amendment to state regulations made by Pierce at a recent commission meeting was tabled due to legal issues raised by staff, the measure received some support from other commission members, indicating it might get a favorable outcome if it returns.

The range of drivers behind these kinds of counterproductive efforts could vary from legacy energy interests intent on preserving market share, to misinformed policy makers thinking they are doing the right thing, to free-market “purists” who don’t understand that there is basically no such thing as a free-market in the energy sector (the oil and gas industry also benefits from government subsidies and tax supports).

It is critical that all stakeholders – not just sustainable energy champions and environmentalists, but the agriculture community, energy technology leaders and public health interests as well – come together to repel these attacks. RPS policies drive economic growth by creating new businesses and the jobs that come with them. They are a principal tool in pushing the United States back to the top of the global clean energy economy.

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