Waxman-Markey Bill’s Tentative Compromise on Renewable Energy Offers a Weak Standard

Waxman and MarkeyWhen Representatives Waxman and Markey introduced their energy bill concept, they included a requirement that utilities deliver 25% renewable-derived power by 2025.  According to the New York Times, a tentative agreement with Democrats unenthusiastic with the orginial proposal would reduce the target to 15% by 2020.

And the 15% gets watered down even further.  States that are simply having trouble making that target can reduce it to 12% if they accomplish a higher level of energy efficiency improvements — something that they should be doing anyway.  In addition states with nuclear power, and those able to develop carbon-captured coal-fired projects  can subtract power from the facilities from the “base” upon which the 15% or 12% is calculated.   That means that what starts as a 15% goal could actually become a whole lot smaller.  Let’s suppose that a state that has already reduced its target from 15% to 12% gets a quarter of its power from nuclear plants.  In such circumstances, the 12% renewable energy target would only apply to 75% of the delivered power.    Then, that state’s renewable energy obligation would be reduced to 9% of delivered power — about a third of what the bill would have required in its earlier form.  For comparison,  consider California, which is shooting for 20% by 2010, and (most likely) 33% by 2020.  None of the hedges that would be available under the tentative federal agreement apply under California’s current program.

In crafting public policy, one always has to ask when a third of a loaf is better than none.  No clear answer here, yet.  Regardless, the authors’ efforts to achieve a national renewable energy standard are critically important.

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Reader Comments

One Reply to “Waxman-Markey Bill’s Tentative Compromise on Renewable Energy Offers a Weak Standard”

  1. You would have thought that these power companies would be investing huge amounts of money into green power production: solar, wind, hydro – but they aren’t. They seem to be more determined to maintain the status quo rather than to genuinely innovate.

    To be fair, running a power generation network is not easy and it is very easy for us consumers to take a pot-shot at them and say they’re not doing their bit when the reality is there are a lot of factors to take into account and a lot of renewable energies simply don’t work for generating the amount of power we need. Solar power, for instance, is a great technology for what it is, but it has some severe limitations from the perspective of a power company.

    But where are the wind turbines? Where is the micro-generation? Where is the new hydro? If the incumbant suppliers aren’t providing it, new companies will. And that means that by 2020, a lot of the existing power companies will be living on borrowed time – squeezed between higher mineral prices, a less tolerant public and new companies undercutting them with renewable power.

    The clock is ticking…

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Steven Weissman

Steve established and directed the Energy Law Program at Berkeley Law. He is currently a Lecturer at the Goldman School of Public Policy.…

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