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Electric utilities are opposing a 20% Renewable Portfolio Standard (RPS) amendment to the Senate Energy Bill, S. 517. The energy bill currently includes a provision that would require utilities to sell 10% of their electricity from renewable energy sources by 2020. Senator Jeffords plans to introduce an amendment that will raise that requirement to 20% by 2020. Utilities say they can't do it, but here is the truth about their false claims. Claim: A 20% requirement would dramatically raise consumer electricity prices. Reality: A 20% renewable electricity standard by 2020 would cost consumers almost nothing. The Department of Energy's Energy Information Administration (EIA), in a report completed at the request of Senator Murkowski (R-AK), found that consumer prices for electricity under a 20% standard would be largely the same as business-as-usual (if there were no renewable energy standards at all). BAU would result in a retail electricity cost of 6.5 cents per kilowatt-hour in 2020, and a 20% standard would result in 6.7 cents per kilowatt-hour: only a 3% increase from BAU, and no more than electricity prices in 1999. The chart below is taken from the EIA report and shows how little effect a 10% or 20% RPS would have on consumers' electricity bills in 2010 and 2020.(1) Claim: It is unrealistic to expect utilities to sell 20% of their power from renewable sources in 20 years when we are currently at only 2%. Reality: The Union of Concerned Scientists (UCS) recently completed a study, Renewing Where We Live, which shows that the U.S. has more than sufficient potential to produce 20% of our electricity from renewable sources. Adopting a 20% standard will put the U.S. on track to be competitive with other countries-many of which have poorer resources and less land area-that have adopted similar or more aggressive standards. The United Kingdom plans to increase renewable energy from 2.8% of electricity use today to 10% by 2010, and a recent government report proposed increasing to 20% renewable energy by 2020.2 Denmark and Finland are planning for 30% renewable energy by 2010. The European Union goal is 22% by 2010. Regions in Denmark, Spain, and Germany already get nearly 20% of their electricity just from wind turbines.(3) State governments are also adopting renewable electricity standards. Nevada's standard requires that 15% of its electricity will come from renewable energy by 2013. Connecticut and Massachusetts both have standards that ramp up to 1% annual increases in renewable energy. The Western Regional Air Partnership-a coalition comprising the Governors of eight western states as well as regional Tribal leaders-recommend both state and national level renewable energy standards of 20% by 2015 as a means to reduce regional air pollution.(4) Claim: A 20% RPS will hurt consumers and reduce economic growth and employment. Reality: : A national RES would have substantial economic benefits. Both EIA and UCS analyses found that under a 20% RES, total consumer energy bills would be lower in 2020 than business-as-usual because the RES would reduce natural gas prices. Lower energy bills will make the American economy more competitive and increase economic growth and employment. A 20% RES would create 80,000 new, high quality jobs in the wind industry alone; spur $80 billion in new capital investment; and provide $1.2 billion in new income for farmers, ranchers and rural landowners and $5 billion in property tax revenues for communities. Furthermore, creating a healthy renewable electricity industry would position U.S. renewable energy firms to compete successfully with European and Japanese companies for a multi-billion international market in renewable energy. Conclusion: A 20% Renewable Electricity Standard is achievable, affordable and good policy for the United States. Studies by EIA and UCS demonstrate that a 20% RPS is achievable and affordable and would bring significant environmental, security, and economic development benefits to the United States. A national renewable electricity standard is backed by strong support from the public and a wide range of business and community leaders. Polling by the Mellman Group showed that an overwhelming majority (70%) of the public supports a 20% national standard.5 In addition, over 700 businesses, organizations, and academic and elected officials have voiced support for a national renewable energy standard. 1. U.S. Energy Information Administration, "Impacts of a 10-Percent Renewable Portfolio Standard," February 2002, SR/OIAF/2002-3. http://www.eia.doe.gov/oiaf/servicerpt/rps/pdf/sroiaf(2002)03.pdf. Because EIA assumed a cost cap of 3 cents per kilowatt-hour and the RPS would sunset in 2020, the actual renewable energy share of electricity sales in 2020 was 8.4% under the 10% RPS scenario and 11.7% under the 20% RPS scenario. EIA found that removing the sunset would increase the percentage of renewable energy and reduce the costs of the RPS. 2. Matthew Jones, "UK to Accelerate Pace of Renewable Energy Target", February 14, 2002. Reuters News Service. http://www.planetark.org/dailynewsstory.cfm?newsid=14528&newsdate=14-Feb-2002 3. American Wind Energy Association, "Wind Energy Press Background Information", May 11, 2001. 4. Western Regional Air Partnership, Recommendations of Air Pollution Prevention Forum to Increase the Generation of Electricity from Renewable Sources. June 30, 2000. http://www.wrapair.org/forums/Ap2/group_reports/FinalDraftRR.pdf 5. The Mellman Group, "Public Attitudes Toward Energy and the Arctic", February 2002. Up to Top HOME | Email Signup | About Us | Contact Us | Terms of Use |
