Bingaman will float clean energy mandate bill early next year

Source: Katie Howell • E&E • Posted: Thursday, December 1, 2011

Senate Energy and Natural Resources Chairman Jeff Bingaman will wait until next year to introduce legislation that would require utilities to generate a portion of their electricity from low-carbon sources.

The New Mexico Democrat this morning said he will likely float the clean energy standard, or CES, measure early next year. The comments came after the Energy Information Administration today released an analysis Bingaman requested of eight different CES policy options.”The EIA has provided us with a thorough and thoughtful analysis of key policy options for a clean energy standard,” Bingaman said in a statement. “The insight that EIA experts have included in this report will help inform the CES legislation I am developing and planning to introduce early next year.”The 33-page report he requested in August details the results of models the independent Energy Department statistical arm conducted on a base CES design and seven variations.The base case and most of the variations would require utilities to generate 80 percent of their electricity from low-carbon sources — such as renewables, nuclear power, and coal with carbon capture and sequestration — by 2035.

The standard would employ a credit-trading scheme where utilities could either generate electricity using cleaner-burning fuels or buy the credits from another utility. The base standard would grant full credits for renewable generation and new hydropower and nuclear generation and partial credits for natural gas-fired and coal-fired generation. The variations address different credit schemes and utility-size differences.

The EIA analysis found that the base case would drastically reduce coal-fired electricity generation over the next 25 years, boost renewable generation and reduce carbon dioxide emissions. But it would cause electricity prices to rise in the later years of the standard and a natural gas price increase in the early years of the standard.

Bingaman has been working since the beginning of this year to craft CES legislation after previous efforts to implement a stricter renewable-only electricity standard were dashed last year.

A broader CES, which has received support from the White House and both sides of the aisle in Congress, was once seen as a potential path forward on energy legislation in the current Congress. But political will to move on such a measure has all but dried up. Still Bingaman, who is retiring at the end of next year, and his aides have stressed the importance of initiating discussions about such a standard.

“I do think it’s a discussion that’s very much worth having,” Bob Simon, the Energy and Natural Resources Committee’s Democratic staff director, said earlier this month at an event in Washington. “I think our outlook is we’ll put out a proposal that is a constructive start for the discussion” (E&ENews PM, Nov. 17).

Click here to read the report.