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New RPS Proposals Under Consideration by Congress

Feb 9, 2009 - Stoel Rives, LLP

Enactment of a renewable portfolio standard ("RPS") has been under consideration in Congress and elsewhere for several years. In a nutshell, an RPS would require that a certain percentage of electricity sold to retail consumers must be obtained from renewable sources, such as wind, biomass, solar, and geothermal. Several states have enacted their own RPS, but to date no action has been taken at the federal level.

Last week, two significant developments occurred in Washington. First, the majority staff of the U.S. Senate Committee on Energy and Natural Resources, chaired by Senator Jeff Bingaman (D-NM), released the outline of a proposal for a federal RPS. If enacted, this proposal would require that 20% of all energy sold to retail consumers by 2020 be obtained by the seller from renewable sources. The staff also announced that a hearing on the proposal was scheduled for Tuesday, February 10, at 10 a.m. (EST). The following witnesses are scheduled to testify:

Dr. Ralph Izzo, Public Service Enterprise Group
Mr. Don Furman, Senior Vice President, Iberdrola Renewables, Inc.
The Honorable David Wright, Commissioner, representing SEARUC
Mr. Scott Jones, Executive Vice President, Forest Landowners Association
Dr. Lester Lave, Professor, Carnegie Mellon University

A link to the Committee press release follows.


In addition to this announcement, Representative Ed Markey (D-MA), chair of the House Select Committee on Energy Independence and Global Warming, together with Representative Todd Platts (R-PA), has introduced his own proposal for a federal RPS. That bill (HR 890) would go further than the Senate Energy Committee staff proposal, and would impose a 25% RPS requirement by the year 2025. A link to the language of the bill follows:


Although it is impossible to predict what Congress may or may not do, the conditions look favorable for enactment of some form of nationwide RPS. As part of his campaign, President Obama called for a 10% RPS by the year 2012. It is expected that the President will soon propose a comprehensive energy strategy to Congress, which could include an RPS.

A continuing issue in Congress?s consideration of the bills will be the relationship between the federal and state standards. As initially presented, the federal legislation would provide for the higher standard to apply. The House bill would also recognize credits granted by a state RPS. It is not clear, however, whether federal credits would be recognized when based on technologies that do not qualify for credits under the federal RPS (such as "clean coal"). The House bill also calls for reliance on state credit tracking systems. Most such systems utilize megawatt hours as a unit. The House bill, however, curiously specifies granting credits per kilowatt hour. We also note the "steps" to the maximum standard of 25% are back-end loaded, inviting controversy in the later years of the program. Doubtless, these and other issues will be debated as the legislation moves through committees.

Enactment of a federal RPS would significantly alter the demand for renewable energy on a nationwide basis. Nevertheless, it is expected that opposition to an RPS will be strong and that enactment of an RPS is not a certainty.

Stoel Rives will be monitoring this and other developments in Congress and will keep you updated. In the meantime, if you have any questions, please contact one of the following attorneys:

Portland, Oregon Ed Einowski at (503) 294-9235 or eeinowski@stoel.com Steve Hall at (503) 294-9625 or schall@stoel.com William Holmes at (503) 294-9207 or whholmes@stoel.com

Minneapolis, Minnesota Greg Jenner at (612) 373-8857 or gfjenner@stoel.com Mark Hanson at (612) 373-8823 or mjhanson@stoel.com David Quinby at (612) 373-8825 or dtquinby@stoel.com

Seattle, Washington David Benson at (206) 386-7584 or dlbenson@stoel.com Alan Merkle at (206) 386-7636 or armerkle@stoel.com

Anchorage, Alaska Jim Torgerson at (907) 263-8404 or jetorgerson@stoel.com

Boise, Idaho John Eustermann at (208) 387-4218 or jmeustermann@stoel.com

Sacramento, California John McKinsey at (916) 319-4746 or jamckinsey@stoel.com

San Diego, California Howard Susman at (858) 794-1462 or hesusman@stoel.com

Salt Lake City, Utah Julia Pettit at (801) 578-6958 or jrpettit@stoel.com


Updated: 2003/07/28