One More Chance for the RES

Bill Opalka | Jul 30, 2010


The renewable energy industry and its Congressional supporters insist they have enough support in the U.S. Senate to include a nationwide mandate for utilities to acquire a percentage of their generation from renewable sources.

Their best chance to get one enacted has fallen by the wayside in recent weeks.

Instead, the scaled-back energy legislation, the so-called "spill bill" recently introduced, deals mostly with the Gulf of Mexico disaster and has provisions for energy efficiency and electric vehicles. Carbon caps and a renewable electricity standard (RES) were left out.

"The RES is the one thing in energy policy that united everybody," said Denise Bode, CEO of the American Wind Energy Association (AWEA).

She added that the development of clean energy jobs that a RES would encourage is an issue that cuts across party lines. "This is a critical time for our industry and incomprehensible that it is not put in place to generate manufacturing jobs," she said.

AWEA claims it has a firm count of 62 supporters, including six Republicans. But Senate Majority Leader Harry Reid, a Nevada Democrat, has his doubts.

"I can count and we don't have 60 votes," Reid said last week while ironically announcing a clean energy conference in Nevada.

AWEA and its supporters hope to introduce an amendment to Reid's bill, but the situation regarding parliamentary maneuvers is uncertain.

"We expect Republicans to introduce  a competing bill for the oil spill, but we're not clear if any of this is meant to develop a policy or to score political points in advance of an election," said  Monty Humble, counsel to Alston & Bird and former general counsel and senior vice president for T. Boone Pickens' Mesa Power Group.

The wind industry just experienced its worst six-month period in three years and 2011 only promises to get worse, as government stimulus funds start to run out.

And that's a story for another day, as congressional action to extend a grant program, another renewable energy priority though decidedly more short term than an RES is also stalled.

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Funding the Unfunded Mandate

First comes the unfunded mandate in the form of an RES. Then:

  • The mandate gets passed to Public Utility/Service Commissions for regulatory oversight
  • "Developers" appear offering utilities the electrical output of renewable energy projects
  • Utilities, under the coercive power of the government, sign power purchase agreements
  • Power purchase agreements necessarily establish premium pricing given the high commercial cost of renewable projects including real estate, ongoing operations & maintenance, transmission line costs, etc.
  • The "developer", having secured a contract AND a 30% taxpayer-funded subsidy against the cost of the ENTIRE project....get's financing.
  • Public Utility/Service Commissions, exercising regulatory oversight, grant utilities the "gift" of passing the high cost of the unfunded mandate directly to ratepayers. Unfunded mandate problem solved!


In essence, the government has established a money laundering (vote buying) scheme and NONE of the co-conspirators (greenware vendors, utilities, politicians, unions, engineers, do-gooders, Greenies, etc.) is going to kill the goose as long as the prospect of getting a golden egg exists. THAT is why this idiocy is self-perpetuating...and right under the nose of an ignorant public.

Think this is exaggeration? Go check out the Cape Wind WHOLESALE power cost to National Grid ($0.207/kWh) and note that the Massachusetts AG is questioning the contract because "Neither party had an incentive to bargain for terms that yield cost-effective terms for ratepayers''.

The concept of "all-things-green-at-any-cost" is already here, being propped up by the slush fund that goes by the name of "Recovery and Reinvestment Act", i.e. the "Stimulus Bill".

What's not to like?