Waxman moves House closer to Senate on renewables
New York, 21 May: The loosening of renewable energy targets in the proposed US House of Representatives climate and energy bill brings its provisions closer to Senate renewables proposals – making federal targets more likely, say observers.

Last week, Congressmen Henry Waxman and Ed Markey published their American Clean Energy and Security Act. Targets for a federal renewable electricity standard (RES), one of the most controversial elements of the bill, were lowered in a bid to placate south-eastern and mid-western representatives. It also would allow more of the goal to be achieved through energy efficiency, bringing the provisions closer to a proposal by Senator Jeff Bingaman.

Utilities selling more than 4 million megawatt hours of electricity would be required to obtain 6% of their electricity requirements from renewable sources and energy efficiency initiatives by 2012, increasing by 2020 to 15% from renewable energy sources and 5% from energy efficiency improvements, if the Waxman-Markey bill was implemented. 

This represents a weakening of the 25% target seen in the original Waxman-Markey proposal – a moved designed to alleviate the concerns of House members from the south-east and mid-west who argued their states did not have the renewable resources to comply.

“Everyone knew the original proposal was too aggressive,” said William Bumpers, head of the global climate change practice of Baker Botts in Washington, DC. Allowing utilities to spend more on energy efficiency to meet the targets is a “good compromise”, he said.

State governors can petition the US Federal Energy Regulatory Commission to increase the portion of compliance that can be met through efficiency measures to up to 40% of the target for electric suppliers located within their states.

But American Wind Energy Association CEO Denise Bode expressed disappointment that this meant that the 2020 target for renewables could be as low as 12%, which would eliminate more than 100,000 jobs that would have been created to meet a 25% target, she said.

Meanwhile, the Senate Energy and Natural Resources Committee was due today to consider Bingaman’s proposal for a federal RES and efficiency standards. The proposal would require electric utilities to produce 20% of their power from renewable resources such as wind and solar by 2021, but would allow utilities to achieve five percentage points of the requirement from energy efficiency.

From a procedural standpoint, legislators could decide to separate the RES provisions from the House bill and reconcile that portion of the legislation with the Senate bill to pass that more quickly. The similarities between the two legislative proposals should make reconciliation “a little easier”, Bumpers said.

But Waxman and House Speaker Nancy Pelosi have vowed to pass a comprehensive energy bill that includes a greenhouse gas (GHG) emissions cap-and-trade programme. Intense negotiations have resulted in provisions for free allowances for industry, boosting the bill’s chances of passing in the House, observers said.

Democrats on the House energy and commerce committee, chaired by Waxman, are finalising the language this week. Several members, including moderate Democrat Rick Boucher, have voiced support for the legislation, increasing the chances that Waxman will be able to move his bill through the committee by his 25 May target date.

Meanwhile, the committee adopted an amendment on Wednesday to establish the Clean Energy Deployment Administration within the Department of Energy, which would facilitate access to affordable financing for clean energy and energy efficiency technologies.