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United States

Clinton plan smiles on wind

A Renewable Portfolio Standard (RPS) for 5.5% of electricity generation in the US by 2010 is included in the Clinton administration's long awaited principles for utility restructuring, announced on March 25. The federal RPS proposal excludes hydro power, but includes a price cap and is set to expire in 2015.

The restructuring plan creates a "flexible mandate" for states to start retail competition by January 1, 2003. States may, however, opt out of the mandate. The administration expects the introduction of competition in retail supply to save $20 billion per year in electric bills.

Not only does the plan stimulate a market for clean power by setting a minimum standard for the amount of renewables in the supply mix, it also provides cash support. A $3 billion Public Benefit Fund, funded by a $0.001/kWh fee and implemented as a matching grant program with states, will provide money for the development and demonstration of emerging technologies, particularly renewables, as well as pay for low income assistance, energy efficiency programs, and consumer education.

Furthermore the principles: require disclosure of emissions and fuel sources; allows recovery of "prudent, legitimate and verifiable" stranded costs; gives greater authority to the Federal Energy Regulatory Commission to regulate market practices and mergers, but repeal the Public Utility Holding Company Act; repeals the "must buy" provision of section 210 of the Public Utility Regulatory Polices Act (under which many of the California wind contracts were born), but preserves existing contracts; requires distribution companies to offer net metering for small (less than 20 kW) renewable systems; and implements a credit trading system for NOx emissions.

The principles do not address carbon emissions. The administration is promoting a carbon cap-and-trade system to be in place by 2008, but will broach the issue with Congress separately. It expects competition alone to reduce greenhouse gas emissions by 25 to 40 million metric tons by the year 2010.

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