Two Senate Bills Propose National Renewable Portfolio Standard

by Akin Gump Strauss Hauer & Feld LLP
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Senator Tom Udall (D-NM) sponsored legislation on October 29, 2013, that would institute a nationwide renewable portfolio standard for the country’s investor-owned utilities.  The proposal, called the Renewable Electricity Standard Act of 2013, would require utilities that make annual retail sales of more than one million MWh to service a designated portion of their load with power from renewable sources.  The threshold starts at six percent in 2014 and gradually escalates to twenty-five percent by 2025.  Suppliers would be able to comply with the requirements by purchasing federal renewable energy credits from other entities that have earned credits by producing energy from renewable sources.  “Renewable sources” would be defined to include solar, wind, ocean, tidal, geothermal, biomass, landfill gas, hydrokinetic, and incremental hydropower resources.  Senators Mark Udall (D-CO) and Benjamin Cardin (D-MD) co-sponsored the legislation. 

If passed, the legislation would implement the first national renewable portfolio standard.  Twenty-nine states and the District of Columbia currently have established state-level renewable portfolio standards, and eight states have set forth “renewable portfolio goals” (see map).  The federal law would not preempt state laws with more ambitious standards than the proposed national plan, such as California’s thirty-three percent renewable requirement by 2020. 

Senator Edward Markey (D-MA) introduced a similar piece of legislation, called the American Renewable Energy and Efficiency Act, on October 31, 2013.  This proposed bill would require retail electric suppliers to meet six percent of their load with energy from renewable sources by 2015.  The bill proposes a gradual escalation in the renewable requirement similar to the Udall bill, resulting in a 25 percent by 2025 standard. 

Senator Markey’s bill would require both electric and natural gas utilities to meet a separate energy efficiency requirement.  The bill would establish a baseline representing the annual quantity of power or natural gas delivered by the supplier during the three calendar years immediately preceding the compliance year. The bill would require retail electric suppliers to achieve cumulative electricity savings of one percent by 2015, escalating to cumulative savings of fifteen percent by 2025.  Retail natural gas suppliers would be required to achieve cumulative savings of 0.5 percent by 2015, escalating to ten percent by 2025.  These savings could be achieved through measures such as building energy codes, appliance standards, utility efficiency programs, reduced losses in transmission and distribution, etc. 

Both bills have been referred to the Senate Committee on Energy and Natural Resources, and could provide a boost to the renewable energy industry.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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