Senators Consider Expensive Renewable Energy Mandates

Published October 4, 2010

With time rapidly running out on the 111th Congress, supporters of wind, solar, and biomass energy mandates are desperately trying to round up Senate votes for a bill that would force utilities nationwide to increase their production of renewable energy.

Expensive Energy Mandates
Under a bill introduced September 21 by Senators Jeff Bingaman (D-NM) and Sam Brownback (R-KS), utilities would be required to generate at least 15 percent of their electricity from renewable sources by 2021.

Bingaman is chairman of the Senate Energy and Natural Resources Committee, and Brownback is retiring from the Senate and running for governor of Kansas. Other leading cosponsors include Byron Dorgan (D-ND), Susan Collins (R-ME), Tom Udall (D-NM), and Mark Udall (D-CO). The bill has 25 cosponsors in all, including 20 Democrats and four Republicans.

The bill’s renewable electricity standard (RES) would be phased in during the next 30 years. Qualifying renewable energy sources would include wind, solar, biomass, landfill gas, incremental hydropower, hydrokinetic energy, new hydropower at existing dams, and waste-to-energy.

The federal RES of 15 percent would come at the expense of fossil fuels, forcing utilities to engage in what is known as fuel switching. Even with their generous subsidies, however, renewable energy sources are not cost competitive with power derived from coal, oil, or natural gas, and the measure would thus raise electricity prices for consumers and businesses. Thus no action is expected on the measure until after November’s midterm elections, with many lawmakers understandably skittish about going on the record as forcing a hike in energy prices during a recession. 

Competing Interests Target Bill
Bingaman and his allies face other problems as well. He and Brownback are insisting on a “standalone” bill, and they are determined to keep their measure from being amended. If their bill becomes a legislative Christmas tree, adorned with gifts to favored constituencies or causes, it could end up repelling more people than it attracts. The bill, however, has already garnered the attention of senators interested in offering amendments that could bring the legislation down like a house of cards.

Sen. Mary Landrieu (D-LA), for example, says she cannot support a RES bill unless it includes a provision lifting the Obama administration’s economically devastating moratorium on deepwater oil and gas drilling.

Sen. Kit Bond (R-MO) says he would like to attach an amendment to the legislation barring EPA from regulating greenhouse-gas emissions. Bond’s move would be bitterly opposed by Senate supporters of such regulations.

The bill could also be amended with just enough climate-related language to enable it to be merged with the House-passed Waxman-Markey cap-and-trade-bill during the lame duck session in November. But that would keep cap-and-trade opponents from supporting the RES legislation.

In addition, whatever bill emerges in the lame duck session, if one does come through, will require 60 votes for passage—a high mountain to climb.

Renewable Record of Failure
Meanwhile, lobbyists for the renewable energy industry are swarming all over Capitol Hill, hoping to persuade lawmakers to pass an RES bill that guarantees them a market share. Investors are showing a growing reluctance to back renewable energy projects, fearing the days of generous subsidies may be coming to an end.

Cash-strapped governments in Europe are already cutting back on renewable energy subsidies, and the U.S. Congress that is expected to emerge from the November 2 midterm elections is likely to be far less friendly to the subsidy-dependent renewable energy sector.

“In a dangerous game of ‘follow the leader,’ national policy makers are trying to force on the country the failed renewable portfolio standard approach of California and other states,” said Tom Tanton, president of T2 & Associates, a California-based energy and technology consulting firm.

“The states with renewable portfolio standards are also the states with much higher than average electricity rates,” Tanton observed. “Pushing even more expensive options onto U.S. consumers during a recession is as harmful to our recovery as a permanent, major tax increase.” 

Bonner R. Cohen, Ph. D ([email protected]) is a senior fellow at the National Center for Public Policy Research.