From: H. Josef Hebert, Associated Press
Published June 14, 2007 12:00 AM

Senate Debates Requirement for Utilities To Use More Renewable Fuels

WASHINGTON -- Senate Democrats proposed a requirement Wednesday that 15 percent of the nation's electricity be produced by wind, biomass and other renewable energy sources.


Democrats were trying to include the renewable fuel requirements on a broader energy bill before the Senate, but they faced strong opposition from senators who worried that such a national mandate would raise electricity costs in some states.


Sen. Jeff Bingaman, D-N.M., the proposal's chief sponsor, said getting utilities to use more renewables "will reduce our dependence on traditional polluting sources of energy" and make a start in cutting carbon dioxide linked to global warming.


Bingaman's proposal requires all utilities to ramp up renewable fuel use to 15 percent by 2020. Renewable energy sources, mostly from wind turbines, account for about 3 percent of the electricity produced today, compared to more than 50 percent that comes from burning coal, according to the Energy Department.


The proposal was sharply criticized by a Republican senator who said it would force a mandate onto utilities, mainly in the Southeast, that they will be unable to meet because they have little sources of wind power, one of the fastest-growing renewables.


"Some regions cannot meet the renewable mandate because they don't have adequate renewable resources," said Sen. Pete Domenici, R-N.M. He circulated a study commissioned by the Edison Electric Institute, the utility trade group, that shows 27 states would be unable to comply with the 15 percent renewables requirement.


Domenici proposed that utilities, instead, have to meet a 20 percent "clean fuel" requirement that would include electricity produced from nuclear reactors and hydropower as well as renewables, and that states be allowed to "opt out" of the national program.


Twenty-three states already require utilities to move toward meeting minimum renewable fuel use requirements, including nine states whose standards equal or exceed Bingaman's proposal. For example, California will require 20 percent of electricity from renewables by 2010. Oregon and Minnesota recently established a mandate of 25 percent.


Senators opposed to the federal requirement argued that those are states where wind power or other renewable sources are in abundance. Much of the South and parts of the Midwest do not have these same resources, they argued.


"You cannot impose the same regulated wind requirement on a state that has no wind," said Domenici.


Bingaman countered that there are plenty of renewable fuels other than wind and that, for example, states in the South have huge resources of biomass such as shrubs and trees.


To counter opponents' claims that the renewables requirements would cause electricity prices to soar, Bingaman produced a report from the federal Energy Information Administration that said otherwise.


The agency's analysis of Bingaman's proposal said that overall electricity prices would increase less than 1 percent and that natural gas prices would decline. Accumulated residential electricity expenses through 2030 would increase less than half of 1 percent, according to the analysis.


The study also said a 15 percent national renewable mandate on electric utilities would result in a 50 percent increase in wind power, a tripling in the use of biomass and a 500 percent increase in the use of solar power, while cutting greenhouse gases 6.7 percent below what they otherwise would be by 2030.


Opponents challenged the EIA findings on cost, which they said looked at national average prices and not regional price impacts.


Sen. Lamar Alexander, R-Tenn., read a letter from a utility official in Chattanooga who feared that a requirement to use renewable fuels would force higher electric prices and "have an enormous impact on our community."


These "unnecessary electric power costs ... will drive jobs out of Tennessee," Alexander said.


Source: Associated Press


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