New York, NY – June 13, 2007 — Over the next few weeks Congress will take up the Democrat’s Energy Bill. Among the most controversial issues is a national Renewable Portfolio Standard (RPS), requiring utilities to use more renewable resources to produce the nation’s electricity. Congress has debated - and rejected - an RPS 17 times in the last 10 years. But this year, bipartisan support and increased pressure to address global warming give the proposal a fighting chance.

The Network for New Energy Choices (NNEC) and experts from Virginia Tech and the National Commission on Energy Policy have released a comprehensive analysis of 23 state-based RPS policies that arrives at recommendations for crafting an effective federal standard and avoiding the pitfalls that have thwarted some state efforts.

 Renewing America:  The Case for Federal Leadership on a National RPS makes some startling claims based on empirical data from over a decade of state-level action. Download the full report here: Renewing America R.P.S Report

The report evaluates lessons learned from state programs over the last two decades and applies them to the current debate over how to craft a federal law. Among its key findings:

+ Including Clean Coal and Nuclear Raises the Price of a National RPS

A federal standard that includes coal and nuclear will prevent uniform, national rules for trading renewable energy credits since most state-level RPS mandates do not recognize these fuels as eligible renewable resources. Instead of consistent trading standards, a national RPS that includes coal and nuclear will cost utilities and increase consumer electricity prices by creating more inconsistency and discouraging a national market for renewable energy.

+ Reducing the Percentage Actually Increases Costs to Utilities and Consumers

More than 20 peer-reviewed studies show that an RPS saves utilities money by offsetting significant amounts of expensive natural gas. Renewable resources (with stable fuel prices) can take pressure off of the tight natural gas market and serve as a “hedge” against volatile natural gas prices, saving consumers as much as $49 Billion by 2020. However, this potential “hedge” value is realized only when the RPS mandate is high enough (15%-20%) to offset a significant amount of natural gas. At lower levels, renewable resources simply do not offset enough gas to generate a cost savings.

+ Counting Energy Efficiency Toward an RPS Discourages Renewable Energy

Including energy efficiency in an RPS standard has the unintended effect of “double-counting” the efficiency efforts and discounting the renewable energy investments. This is because most RPS mandates already implicitly include efficiency by setting the RPS goal as a percentage of electricity demand. Allowing efficiency efforts to be used to meet the goal as well gives them twice as much value as investments in renewable energy: Efficiency efforts get counted once on the “front-end” by decreasing total electricity demand (and thus the effective level of the RPS goal). Then, they get counted a second time on the “back-end” by being applied to the (now lower) RPS mandate. The result is a sneaky way of reducing the RPS level while decreasing the value of renewable energy in meeting the federal mandate.

You can download the full report here: Renewing America R.P.S Report