Senate Energy and Natural Resources Committee Chairman U.S. Sen. Jeff Bingaman, D-N.M., recently introduced the highly anticipated legislation requiring utilities to supply a set percentage of their energy from clean sources.
This legislation would define the first national standard for clean energy in the U.S.
The Clean Energy Standard Act of 2012 faces major hurdles in Congress, but will likely energize Democrats and renewable-energy groups, which endured a defeat when climate legislation was stalled in the Senate in 2010.
An energy policy priority for President Barack Obama, the bill requires that large power companies supply increasing amounts of electricity from low-carbon sources like wind, solar, nuclear and natural gas beginning in 2015. By 2035, 84 percent of power produced by large utilities will come from low-carbon sources, if the legislation is implemented.
The White House applauded the bill, which has eight co-sponsors and the endorsement of several renewable-energy groups, including the American Wind Energy Association and the Center for Climate and Energy Solutions.
Though a handful of Republican lawmakers have backed previous versions of the standard, Bingaman introduced the bill without their support. Perhaps that’s a sign of the times.
U.S. Sen. Lisa Murkowski, R-Alaska, the top Republican on Bingaman’s committee, says she would support the bill only if it replaces Environmental Protection Agency greenhouse gas regulations – a long shot.
Getting substantive legislation through both houses of Congress to the president would be very difficult in this Congress. That’s not news or a surprise to any American with cable TV.
Bingaman requested an updated analysis of the bill from the U.S. Energy Information Administration. He hopes to have a hearing with administration and utility industry officials.
Bingaman’s plan grants credits based on carbon emissions, with a greater number of credits given to low-emission, clean generators. A clean generator is defined as power units with zero carbon emissions, or a lower amount of carbon emission per megawatt-hour than a modern, efficient coal plant.
The CES would reward plants for capturing and repurposing heat and other efficiency efforts, as well.
In 2015, the required percentage of power obtained from clean energy would be 24 percent, reaching more than 50 percent by 2024. If the standard is not met, the utility will make alternative compliance payments of 3 cents per kilowatt-hour. That rate would increase by 5 percent annually starting in 2016
The bill is consistent with requests from Obama to pass a clean-energy standard, a plea he made in both his 2011 and 2012 State of the Union addresses.
Utilities can meet the standards outlined in the bill by producing electricity from renewable energy, nuclear energy, natural gas (which receives half-credit under the bill) and coal with carbon capture and sequestration, although that technology has not proven to be commercially practical.
Opponents of the clean-energy standard have argued that the bill would raise electricity prices, but Bingaman said an EIA analysis indicates that the proposal will have little effect on prices during the first decade of the program. For those willing to be honest in this debate, every American utility is facing rising costs to address their dirty power plants. This CES proposal is merely one identified pathway.
Bingaman said the standard will have zero effect on gross domestic product and no cost to the government.
Our mutual growing energy needs require all parties to come together to build a bipartisan clean-energy plan utilizing the diverse American energy sources. Oklahomans should rally around a national clean-energy standard that makes our state’s natural gas and renewable-energy commodities in demand across the country.
But it’s a presidential election year and it’s Congress we are talking about, so let’s not hold our breath.
Jim Roth, a former Oklahoma corporation commissioner, is an attorney with Phillips Murrah P.C. in Oklahoma City, where his practice focuses on clean, green energy for Oklahoma.