RES likely to fail in lame duck session

UNITED STATES: The odds of passing a national federal renewable electricity standard (RES) in the US before a new Congress takes over next year and resets the process are slim, industry observers say.

Lawmakers left Washington at the end of September to campaign for the November midterm elections without voting on a proposed Senate bill that would require utilities to acquire 15% of their electricity supply from renewable resources by 2021.

They will return in mid-November in what is commonly called a lame duck session to finish up leftover business before the newly elected crop of legislators is sworn in. But it is doubtful an RES will be among the issues resolved, says Keith Martin, a Washington-based partner at law firm Chadbourne & Parke.

"I think it is very unlikely to move during the lame duck session," says Martin. "It's such a limited period of time that they will not have time to get bogged down in a two-week debate on one bill, and there is too much disagreement in the Senate about the shape of an RES."

Many Republicans, for example, are looking to add more eligible resources to the mandate, such as nuclear power or coal produced using carbon capture and storage technology.

The election results are also likely to have an impact - particularly if, as appeared likely in the weeks leading up to the vote, the political tide moves in favour of the Republicans and they gain majorities in either the House of Representatives, the Senate or both.

"I think they would prefer to wait until January when they have more control of the process, rather than when the Democrats are still driving the bus," says Martin.

Dan Shreve, a director with the Denmark-based advisory firm Make Consulting, puts the odds of getting an RES passed this year at 20-25%. "The chance is there. I just think it is limited," he says.

The White House may try to push the bill's passage, says Shreve, given recent publicised comments by the president. Barack Obama said the administration was looking to shift its strategy away from seeking a comprehensive climate and energy bill towards a more piecemeal approach that tackles specific issues in a series of smaller bills. "The concern is if you can't move this forward, what can you move forward?" asks Shreve.

The bill's lead sponsor, Senate Energy and Natural Resources Committee chair Jeff Bingaman, has been working to muster the 60 votes needed.

The fact that the legislation on the table is "extremely diluted" may help garner enough support to pass it, adds Shreve. There has been some Republican support for the bill, but he thinks much of this is because it is a relatively weak RES.

Rob Gramlich, senior vice-president of policy for the American Wind Energy Association, says the bill's supporters have momentum. "Each week we are adding more co-sponsors."

The low target, combined with the fact that a quarter of it can be met through energy-efficiency improvements, mean the RES is unlikely to generate additional demand for wind beyond what is already required by state targets.

Despite that, industry and environmental groups have lined up to support the proposal in an effort to get something on the books and then try to expand it later, says Martin. The renewables sector is "rather glum" about the chances of moving an RES forward should the Republicans take control of either the House or Senate, he says.

One other policy wind power players will be watching during the lame duck session is the extension of cash grant payments to renewable energy projects. Proposals have been put forward in both the House and Senate that would give developers another two years to qualify for a cash grant equivalent to 30% of eligible project costs.

Under current rules, projects have to start construction this year and come online by the end of 2012 to qualify for the payment. While Gramlich is optimistic that the deadline will be extended by attaching the grants to legislation to extend expiring tax cuts, Martin is concerned the multi-billion-dollar price tag of a deadline extension and a divisive Congress could get in the way (Windpower Monthly, September 2010).

"The tax staff on Capitol Hill say the odds are 40-50% that something will go through this year," Martin says. But he adds that these odds are reducing. Despite the hard work of the renewables associations, there is a possibility the lame duck sessions will end up not doing very much, if anything.