Stakeholders Should Prepare for Greater Challenges to State Renewable Standards

With the new year starts a new round of state legislatures convening. And with that comes new challenges to the state Renewable Portfolio Standards (RPS) adopted by 31 states.

Last year marked a contentious one in many statehouses where efforts were made by “free market” advocates to weaken or eliminate state-imposed mandates requiring specific percentages of each state’s electrical power be generated from renewable resources like wind, solar and biomass.

Of the 27 pieces of anti-RPS legislation introduced across the country, all were defeated except for a measure in Ohio, where renewable energy stakeholders at least succeeded in fending off a bill that would have repealed the RPS, though the measure that did pass weakened the state’s existing requirements. Elsewhere, RPS supporters were successful in insuring the standard in their states continued the role of promoting the development of a an industry that is still relatively new. It is a sector that is creating jobs, generating new revenues for state and local governments, and providing cleaner, low-carbon alternatives that will save states health and clean-up costs down the road. State legislators would be mistaken to underestimate the economic power of renewable power production.

The American Wind Energy Association (AWEA) says the sector has generated about $118 billion in private investment across the country while supporting about 73,000 jobs. AWEA’s latest figures indicate that some $17.3 billion is invested annually in new wind facilities. Meanwhile, the Solar Energy Industries Association (SEIA) says the sector invests nearly $20 billion per year into the economy while employing some 143,000.

The numbers may be considerably smaller than those of the fossil fuel industry, but its continuing growth maintains renewable energy development as a major component of a state’s economy and brings green energy into the mainstream.

Ohio is already feeling the repercussions of the decision made by lawmakers last year – and endorsed by Gov. John Kasich – to freeze and modify standards that 1) required utilities to get 25 percent of their electricity from advanced sources by 2024, including half from renewable technologies, and 2) imposed an energy efficiency requirement calling on utilities to reduce electricity use by 22 percent by 2025.

By freezing the annual targets at 2014 levels until 2016, extending the deadlines by two years, removing a requirement for the amount of renewable electricity that must be generated in-state, and establishing a commission to review the standards and consider additional modifications, lawmakers have rendered a state that only a year ago was rich in renewable energy investment into one that is seeing that investment come to a virtual standstill.

The Pew Charitable Trust says in a report released this week that – as clean energy advocates tried to warn the legislature last year – investments in renewable energy technologies in Ohio that totaled $1.3 billion from 2009 to 2013 have come almost to a halt due to the policy uncertainty resulting from the freeze and modifications. Some $750 million was invested in wind and solar projects in 2012, the report shows, while in 2013, no money was invested in wind, and solar and other projects drew less than $100 million. Also put at risk are thousands of renewable energy jobs in the state, the report shows.

Developments in Ohio have set the stage for new battles this year. A severe challenge was mounted last year against Kansas’ RPS requiring utilities to get 20 percent of their electricity from renewable resources by 2020, and though unsuccessful, the fight is expected to be renewed again this year. In Colorado, some legislators say they want to drop the RPS for larger utilities from 30 percent by 2020 to 15 percent by 2020, and for rural electric co-ops, from 20 percent by 2020 to 15 percent by 2020.

Many analysts anticipate challenges to state standards will be more intense this year. But each state’s renewable energy industries carry more political strength than ever – a byproduct of their increasing impact on each state’s economy. Renewable energy interests are seen as more than capable of taking on fossil fuel and utility interests.

Much of the legislation drafted to weaken or kill state standards comes from model bills created by the American Legislative Exchange Council (ALEC), an association of more than 2,000 conservative state lawmakers, as well as private industries that stand to gain from the status quo.

But it is the stance taken by ALEC opposing renewable energy standards – among other positions – that has cost the organization some of its biggest business members, including Microsoft, Google, Facebook, Yelp, Yahoo and Occidental Petroleum, which, in recent months, joined about 90 other companies that have cut their ties with ALEC because it has lost touch with economic reality.

As the legislative year progresses, 25x’25 urges all renewable energy stakeholders and advocates to show their support for industry-sustaining Renewable Portfolio Standards. Join us in reminding state lawmakers that an RPS brings with it strong economic activity, more state and local tax revenues, an increase in jobs and a diversity of resources that can insure a state will meet all of its future energy needs.

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