On September 21, 2010, Jeff Bingaman (D-NM) and Sam Brownback (R-KS) introduced the Renewable Electricity Promotion Act of 2010, which proposes to establish a Renewable Electricity Standard (“RES”) for electric utilities within the United States.  The proposed bill would require “electric utilities that sell electricity to electric consumers for a purpose other than resale” to obtain a certain percentage of their electricity from renewable energy or energy efficiency improvements.  The bill proposes the following RES targets:

Calendar Year   Minimum annual percentage:
2012 through 2013    3%
2014 through 2016    6%
2017 through 2018    9%
2019 through 2020    12%
2021 through 2039     15%

The minimum annual percentage requirements are calculated based on the electric utility’s “base quantity of electricity”, which means the electric energy sold by the utility to electric customers.  According to the proposed bill, the utility’s base quantity of electricity would not include the following: (i) electricity generated by a hydro-electric facility, (ii) the quantity of electricity generated by a fossil-fuel facility that is equal to the proportion of greenhouse gasses produced by such facility which are captured or geologically sequestered, (iii) electricity generated by a nuclear plant placed in service after the enactment of the bill.

Utilities are only permitted to meet up to 26.67% of their requirements through energy efficiency improvements to their systems.  According to the proposed bill, qualifying renewable energy includes: solar, wind, geothermal energy, ocean energy, biomass, landfill gas, qualified hydropower, marine and hydrokinetic renewable energy, incremental geothermal, qualified waste-to-energy or other “renewable energy source based on innovative technology, as determined by the Secretary [of Energy] through rulemaking.”  The bill provides that the participants may comply with the RES through generation or purchase of renewable energy or energy efficiency savings, purchase of renewable energy or energy efficiency credits, or making alternative compliance payments at a rate of 2.1 cents per kilowatt hour.

Although there is bipartisan support for the proposed bill, it is still unclear whether there are enough votes in the Senate to pass the bill. Senator Bingaman has stated that he believes “the votes are present in the Senate to pass a renewable energy standard” and that he believes the votes are also present in the House.  The Senator notes that once the sponsors of the bill have secured the necessary support, he hopes to pass the bill following November’s mid-term elections.

For more information or questions regarding the proposed bill or any related topic, please contact Craig Kline at 212-704-6150 or Craig.Kline@troutmansanders.com.