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- Jul 2, 11:19am
- US Rep. Inslee Introduces Renewable Energy Pricing Legislation
Bill Tackles Viability of Federal Pricing Head-On
by Jim Pierobon, Contributing Writer
Washington, DC, United States [RenewableEnergyWorld.com]
U.S. Representative Jay Inslee (D-WA) on Wednesday tackled head-on the question of whether Congress can mandate electricity prices with the introduction of legislation that would set "feed-in" tariffs to motivate the development and purchase of more renewable sources of electric power.
"Everyone wins with a performance-based incentive. We just need to make sure that we reward the correct activity."
Inslee's "Renewable Energy Jobs and Security Act" has three main tenets: a guarantee to interconnect renewables to the grid with uniform standards; a mandatory purchase requirement through long-term contracts with fixed tariffs; and rate-recovery through a regional cost-sharing and systems benefit charge.
By making these guarantees, Inslee said, "We can give homeowners, farmers and communities across America investment security that they can take to the bank. We know from experience in Germany, Spain and dozens of other countries around the world that this policy approach spurs unparalleled and affordable renewable-energy development."
Whether the proposal, which one informed observer called a "shot across the bow" of the utilities, even stands a chance in a future Congress remains to be seen. More practically, renewable energy suppliers and utilities will likely be watching how this proposal could shift the debate around renewables and alternatively help secure other policy approaches to renewables such as a national renewable portfolio standards (RPS), which would, in effect, apply to states that do not already have one. Twenty-six states currently have an RPS.
"Any process that prevents Congress from holding renewable energy development hostage -- as we're seeing with the debate over the tax credits -- deserves support," said Matt Ferguson, head of the Renewable Energy Practice at the Reznick Group. "Everyone wins with a performance-based incentive. We just need to make sure that we reward the correct activity."
Scott Sklar, a long-time advocate of renewable energy said, "This is an important bill because of how feed-in tariffs are working in Germany. It sets a marker to utilities that renewable energy pricing needs to be addressed."
Inslee's legislation would require utilities -- at the request of any new renewable energy facility owner -- to enter into a 20-year fixed-rate power purchase agreement. Uniform national "renewable energy payment" rates would be set by the Federal Energy Regulatory Commission at levels that would provide a 10% internal rate of return on investment for available commercialized technologies in regions constituting the top 30th percentile of renewable energy resource potential in the U.S.
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