Energy And Clean Technology Alert: States Define The Future Of Renewable Electricity Use


Recent actions in the U.S. Congress, in combination with actions

over the last decade in a majority of states, have made it clear

that, in the years ahead, an increasingly greater share of the

electricity consumed in the United States will be produced using

renewable fuels. If enacted, energy legislation now under

consideration in both the U.S. House and Senate would create

minimum requirements for the use of renewably generated electricity

throughout the United States, and would allow states to maintain or

enact their own requirements in excess of the federal


This remarkable policy consensus is the product of renewable

energy requirements enacted in recent years in a majority of

states. As de Tocqueville rightly named them, these

"laboratories of democracy" have together provided a

template for a federal renewable energy standard, and a clear

indication of the profound transformation that that standard will

have on America's electricity use.1

Renewable Portfolio Standards (RPS) are legal requirements that

electric utilities and other electricity providers obtain a minimum

percentage of their total electricity supply from generation

sources that use renewable fuels. RPS enumerate the specific

generation technologies that are judged to be

"renewable," the percentage of total electricity

consumption that must be supplied with eligible fuels, and the

mechanisms that are permitted to achieve compliance, such as the

use of renewable energy credits (RECs) and "alternative

compliance payments."

RPS have been passed and signed into law in 29 of the 50

states.2 Among a selection of nine states with some of

the greatest renewable energy requirements, approximately 11% of

all electricity consumed in those states will be generated using

renewable fuels by 2010, and by 2020, renewable fuels will provide

at least 24% of all electricity consumed.3

Over the last decade, a clear and consistent design has emerged

for RPS, despite differences in details imposed state to state.

This design now provides the template for the RPS included in each

of the federal energy bills. State RPS include roughly similar

definitions of renewable fuels, and the eligible technologies that

use them, consumption requirements that must be met with them, and

the mechanisms that may be used to achieve compliance.

For example, most states include wind, solar, biomass, hydro,

biofuels (under some conditions), and marine or hydrokinetic

renewable generation among eligible technologies. The majority of

states employ multi-tiered volume requirements to categorize

eligible technologies based on the vintage of the generation

facility and the type of fuel source. For example, the most highly

valued credits (often referred to as Class I resources) tend to be

reserved for new energy facilities that generate electricity from

the most "environmentally friendly" sources, particularly

solar and wind generation. A significant number of states contain

provisions that permit the use of...

To continue reading