Utility Green Power Programs Are Boasting Success
Raises Discussion Over Voluntary v. Mandatory Standards
The economic landscape is becoming brighter. Or should we say “greener.” The Department of Energy’s National Renewable Energy Laboratory says that residential and commercial consumers are choosing to buy renewable energy.
Investing in renewables carries risks, which are the investments needed to firm up wind and solar power as well as the uncertainty tied to public policies that help support growth. Utilities have therefore been apprehensive about putting capital into emerging technologies that may have a longer payback and that may not be adequately recovered through the rate base.
But now that consumers appear to be warming to the idea, companies are realizing the benefits. And that success has created a renewed push to build additional green projects and to enact the rules and regulations to enable that expansion. Wind energy represents, nationally, about 85 percent of the electricity generated for green power programs, the energy lab says.
“Participating in utility green power programs allows consumers to support renewable energy above and beyond what utilities are procuring to comply with state renewable portfolio standards,” says the energy lab’s Jenny Heeter. “These utilities are offering first-rate programs that give their customers an opportunity to support renewable energy deployment.”
When ranked in terms of renewable energy sales, or megawatt hours per year, Portland General Electric is the leader as of year-end 2012. It is followed by Austin Energy, PacifiCorp, Sacramento Municipal Utility District and Xcel Energy.
When ranked by the percentage of customer participation, the City of Palo Alto Utilities (California) ranks first, as of year-end 2012. It is followed by Portland General Electric (Oregon), Madison Gas & Electric (Wisconsin), Sacramento Municipal Utility District, the City of Naperville (Illinois) and Pacific Power (Oregon).
Voluntary efforts are one thing. Mandatory ones are another, or the existence of renewable portfolio standards. Today 29 states and the District of Columbia have such requirements. Another five states have non-binding goals. The standard creates local demand, which has led to manufacturing and support companies setting up shop in those places. Job opportunities jump as a result.
According to the Governors’ Wind Energy Coalition, state mandates could help contribute to a total of 103,000 megawatts of green energy by 2025. That would equate to 10 percent of the national generation portfolio, which critics say is overly upbeat.
“Politically, they represent a very significant change in the way we view energy policy at the state level,” says Lewis Milford, president of the Clean Energy Group, in an earlier EnergyBiz Insider story. “Ten years ago (RPS) was solely the province of the public utility commissions, but now the legislatures are fully involved in these decisions. Not only do they see the environmental benefits, but also the economic benefits, so there has been a democratization of renewables policy.”
While certain states such as California, New Mexico and Texas have strengthened their renewable portfolio standards, others such as Colorado, Ohio and North Carolina are exploring ways to ease the requirement.
The reason for the resistance is both practical and political: Practically speaking, capital is tight and utilities might prefer to invest in fuel sources that have proven to increase reliability. At the same time, the transmission grid must be expanded to accommodate the influx of green electrons to be transported. And, politically speaking, policymakers who are committed to coal-related technologies are raising obstacles so as to win compromises to advance their cause.
“There are some very significant constraints for why it’s going to be difficult to meet renewable portfolio standard targets,” says Sharon Reishus, senior director of Cambridge Energy Research Associates, at a meeting before regulators last July. “The two major ones are transmission-related and cost-related,” she adds, in an earlier EnergyBiz Insider report.
Policymakers, generally, bend to the public’s will. In this case, the American people have expressed an interest in pursuing green energy goals if they are affordable and they don’t decrease reliability. While the path was never considered to be free from potholes, it can be cleared. That is, if those policies are enacted and carried out in a methodical way, they can work. The latest data released by the National Energy Renewable Lab illustrates that.
EnergyBiz Insider has been awarded the Gold for Original Web Commentary presented by the American Society of Business Press Editors. The column is also the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has been honored as one of MIN’s Most Intriguing People in Media.