U.S. Sen. Jeff Bingaman, D-N.M., who chairs the Senate Committee on Energy and Natural Resources, introduced the Clean Energy Standard Act of 2012 on March 1, which in addition to promoting renewables, also includes promotes nuclear power and low-carbon generation.
In announcing the legislation, Bingaman described it as a “straightforward market-based approach” that seeks to double the amount of low-carbon electricity by 2035.
Unlike some past proposals for a federal renewable portfolio standard, the bill would define “clean” energy liberally enough to include nuclear and coal power that utilizes carbon capture and storage. Combined heat and power units would also be an eligible resource.
After a greenhouse gas “cap and trade” bill stalled in Congress a couple of years ago, several lawmakers have been seeking a CO2-cutting plan that could also attract GOP support.
Although none of Bingaman’s eight cosponsors are Republicans, in the past, a clean energy standard has had bipartisan support, with Sens. Lindsey Graham, R-S.C., and Richard Lugar, R-Ind., having each proposed their own versions in the previous Congress. In his State of the Union address in 2011, President Obama endorsed a Clean Energy Standard.
The bill’s chance of success is complicated both by the fact this is a presidential election year along with the fact that Bingaman has announced that he will retire from the Senate at the end of the session.
Standard called market-driven; munis and co-ops exempt
The CES only applies to utilities that are selling electricity to retail consumers, and exempts small utilities. In 2015, only 8% of all utilities would need to meet the standard, and in 2025 only 13% of all utilities would need to meet it. Most municipal and cooperative utilities will never need to meet the minimum standard.
The standard should not cost the federal government money, according to a bill summary.
Any transactions for clean energy credits occur between utilities and generators on an open market. If any payments are made to the federal Treasury as a result of the CES, the funds from those payments are directed back to the state from which they originated to fund state energy efficiency programs.
Early in the program, much of the clean generation is projected to come from existing natural gas plants running at higher capacity and from renewables (primarily wind and biomass).
Beginning in 2015, the bill would set a standard for clean energy on the largest utilities. These utilities would need to sell a percentage of their electricity from clean sources, and each year would need to sell a slightly greater amount of clean energy.
This bill’s framework allows a wide variety of sources to be used to meet the standard; allows market forces to determine what the optimal mix of technologies and fuels should be; and makes it easy for new technologies to be incorporated, according to the bill summary.
Previous U.S. Energy Information Administration (EIA) modeling efforts indicate the CES could reduce emissions in the power sector by nearly 20% compared to a business-as-usual scenario in 2025 and by 40%.
In April 2011, the Senate Energy and Natural Resources Committee posted a white paper requesting public input on the design of a CES. Over 250 responses were received from industry groups, environmental organizations, think-tanks, private citizens, and other stakeholders.