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DEBATE RAGES ON IN ISOLATION

The bullish stance of the American Wind Energy Association (AWEA) on a fair energy market place suffered a major setback when it was not endorsed by a coalition of environmentalists, small consumers and others in the renewable energy industry. The intention had been to present a united front to the California Public Utilities Commission (CPUC) on how to deregulate the state's electric utility industry.

However, AWEA's "renewables portfolio standard" has gained the backing of some key allies committed to pushing renewables such as wind through market stimulation measures rather than subsidy programmes. Such measures steer renewables clear of getting tangled in bureaucracy or bogged down in debate on how best to divvy up the subsidies on the table.

xThe association made separate comments to the CPUC on deregulation. But these are being backed by the Union of Concerned Scientists, California Solar Energy Industries Association and Public Citizen. AWEA decided on its separate course after the broader grouping ended up producing a document so watered down on renewable energy policies that the association and its allies felt forced to make a stronger statement.

xIf adopted, AWEA's standard would require all electricity retailers to buy specified amounts of renewable energy, including wind. On the opposite side of the fence, large industrials oppose this approach. They view it as an open chequebook. Strangely, this stance has been supported by the Sierra Club and Environmental Defense Fund. They have been courting these large industrials to support continued funding for clean power programmes in a more competitive electric utility industry, instead of backing AWEA's attempts to level the energy market playing field.

The lobbying by these environmentalists has effectively thwarted any chance for AWEA's standard to be included in a policy document entitled "Framework For Restructuring in the Public Interest," despite the fact that such a standard enjoyed some support at the CPUC.

The AWEA standard has been developed by Berkeley-based consultant Nancy Rader. She notes that it is simple and relatively free from red tape. By relying on market forces to select technologies for new power generating plant it also avoids the pitfalls of government programmes where officials are often required to "pick winners," with disastrous results. She points out that those who sell electricity to customers are "in the best position to assemble a portfolio of resources" that include renewables. Using the standard also does away with the need to collect and distribute public funds, although taxpayers are still faced with a future in which the real costs of providing the world with electricity are passed on to them.

The restructuring framework favoured by the broader coalition, which included the Center for Energy Efficiency and Renewable Technologies (CEERT), is unclear on how to maintain 1993 levels of resource diversity, though it states the above market costs associated with renewables would be collected from ratepayers in a separate charge on bills.

According to Hap Boyd of wind company Zond Systems, a member of CEERT, there are legal problems with Rader's approach. "The biggest problem is with AWEA's standard applying to all suppliers, no matter where they are. That kind of state mandate raises some constitutional questions," says Boyd, referring to US laws governing interstate trade. "I think where we'll end up is a modified portfolio standard applied to the local distribution companies." That is also the approach favoured by the Independent Power Producers.

Bill Magavern, director of Public Citizen's Critical Mass Energy Project, voiced concern, nevertheless, about the weaker commitment to wind and other renewables now featured in the Framework for Restructuring. Some environmentalists are too quick to abandon strong positions he says, referring to the stances of Sierra Club and the Environmental Defense Fund. "It's a mistake to think that the industry train is the only one moving. You may end up compromising too much, too soon," he warns.

But there still seems room for compromise. Jan Hamrin, an independent energy consultant and long time friend of the wind industry, claims the adopted framework is good for the transition to a more competitive electricity market. "There is still the opportunity to encourage a portfolio standard down the line if voluntary measures fail," she says.

Hamrin notes that the large energy brokers -- firms such as Destec and Enron -- say they will fight AWEA's proposal to make them responsible for complying with a renewables mandate. From her vantage point, the main positive outcome for wind is strong support from residential consumers. "This is the first time groups like Toward Utility Ratepayer Normalisation and United Consumers Action Network have signed on to a fairly aggressive renewables programme," she says. The groups have frequently opposed subsidies for wind and other renewables in the past. Hamrin also notes that the approved framework is better than she expected. "The renewables folks have been fighting with each other for over a year. Many suggestions were a lot worse," she comments.

Perhaps the most distressing aspect of this debate is that the CPUC seems to be showing little interest in any of it. So far, commissioners have failed to schedule any hearing, or even acknowledge the importance of issues raised by either the framework or AWEA's separate filing.

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