Renewable energy advocates, industry representatives and environmentalists appear largely pleased with the clean energy policy enacted by the Senate version. It's a tentative victory, however, as the bill will need to be reconciled with House version, a less favorable package teeming with contentious policy issues that will need to be resolved before a final bill can be sent to the president's desk.
The Senate voted for the first-ever federal Renewable Portfolio Standard (RPS), a bill that will require that 10 percent of the electricity generated by investor-owned electric utilities be generated by renewable energy by the year 2020.
This policy approach, already adopted by 19 states, has been very successful at fostering renewable energy development and investment throughout the U.S. A national standard could help normalize what's been an effective but complicated patchwork of state regulation and clean energy policy.
Amendments to the Senate's Energy Bill cover a number of items for ocean energy including renewable energy production incentives, Mandatory Purchase Requirements, and Production Tax Credits for energy produced from tidal, current and wave technologies. Additionally, the bill includes language, similar to the House version that encourages the Secretary of Energy to provide funding for the assessment of ocean energy technologies. And the previously mentioned RPS requirement for electric utilities also now lists Ocean Energy as a qualified renewable energy technology.
In another water-intensive, but considerably more traditional renewable energy technology, the hydroelectric power industry secured favorable changes to the hydropower licensing process.
For wind power, the Senate energy bill includes a three-year extension of the Production Tax Credit (PTC) offering the industry a longer respite from the on-again, off-again nature of the tax credit. The credit remains unchanged — it is maintained at its current value of 1.8 cents per kWh.
Not included in the bill this time is a new credit for small wind energy systems for individual businesses. Last year the Senate energy bill included a 30 percent investment tax credit for such purchases, capped at $2,000 per system. While wind power advocates would have preferred federal support on such a policy, the Senate overwhelmingly voted down an amendment from Senator Lamar Alexander (R-TN) that would have had a devastating effect on new wind power developments, particularly those in offshore waters.
That same three-year PTC extension for wind power was also expanded to include geothermal energy. This again, will provide a fixed 10-year phase of tax credits on a per kWh basis.
According to Alyssa Kagel, Outreach & Research Officer for the Geothermal Energy Association, the Senate bill also provides incentives for public power systems and rural cooperatives through its "clean renewable energy bonds" provision. These provisions would result in revitalization of geothermal power in across the Western states by spurring new power projects from New Mexico to Alaska.
Provisions that update and revise the Geothermal Steam Act will encourage more "direct use" of geothermal by homes, communities, ranchers and businesses and for power producers will reduce high administrative cost of federal royalties by directing the Department of the Interior to move to a gross proceeds royalty system.
The real challenge for renewable energy technologies is for these policy items to survive the far more secretive process of consolidation between the House and Senate energy versions of the energy bill.
