In testimony before a congressional sub-committee late last month, Randy Swisher of the American Wind Energy Association (AWEA) stressed that any restructuring legislation must include measures to encourage the use of renewables. Specifically, AWEA supports a federal RPS requiring that 5% of America's power comes from renewable sources by 2005 and 10% by 2010.
On October 22, the same day that President Bill Clinton unveiled the US negotiating position on climate change policy, Swisher testified that new electricity sector legislation should also include a National System Benefits Trust Fund, along with other measure to encourage renewables and protect the environment. AWEA backs utility restructuring, he said, but that certain measures such as the RPS are necessary to cut pollution, lower energy imports and provide jobs in the 21st century.
Customer choice, the fundamental concept underlying restructuring, "will be good for the economy, good for the consumer, and good for the electric industry. If properly designed, it can also be good for the environment," he said. Swisher was testifying before the House Subcommittee on Energy and Power. He noted that fossil fuel power plants are still the major cause of air pollution, that net imports of natural gas have tripled in the last decade. In addition, he said, markets for renewables and especially wind have been growing steadily overseas and will continue to do so, according to the World Energy Council. A robust US renewables base would allow the US to compete internationally while also providing domestic jobs.
The right to know
An RPS would require that electricity generators obtain a minimum percentage of their power from renewables. A National Systems Benefits Trust would provide funding for energy efficiency and emerging renewables such as PV and small wind systems. AWEA also advocates consumer "right to know" legislation that would force power suppliers to disclose what type of fuel was used to generate the electricity they sell.
In September, AWEA had lashed out at the Natural Gas Supply Association (NGSA) for its "misleading" attack on the concept of an RPS. NGSA had disseminated a report and press releases the month before that said an RPS would significantly up the cost of electricity, disrupt the electric system and increase negative impact on the environment. AWEA first pointed out that NGSA's claim -- that an RPS for 10% of power to come from renewables would hike consumer electricity bills by 12% -- was based in part on an arithmetic error. NGSA agreed, and acknowledged that its estimate should have been 8%.
AWEA analyst Nancy Rader notes that NGSA also failed to address a critical issue -- that its estimate applied only to the cost of electricity generation, which is only about 40% of the total delivered cost of electricity. That means, she says, the cost impact of a 10% RPS shrinks to 3.2% of consumers' bills. That is typically a dollar or two a month, an amount that US consumers have consistently said they are willing to pay, she says. In fact, a sophisticated analysis by the Tellus Institute found that the costs of a 10% RPS in 2010 would be $1.30 a month for the average home, says AWEA.
On September 19, key legislators involved with restructuring pledged a major push on the mammoth task. It has been hampered over the past year by utility opposition and the complexity of various issues. So far 11 states, including California, have begun or are close to starting to encourage restructuring and consumer choice. The atmosphere of uncertainty, however, is slowing the efforts of those who are or who want to become players in the emerging electricity market.