The final House bills include a 15 percent renewable fuels requirement for electric utilities, which really sticks it to southern states where access to alternative energy sources like wind is limited. Bloomberg, on passage:
Under Republican control, the House killed previous bids to pass a renewable electricity mandate before the proposal reached the chamber’s floor and today’s approval was a breakthrough.
It was a setback, however, for the nation’s largest utilities, which include Southern Co. and American Electric Power Co. The industry argued that passage would raise power rates and create a particular disadvantage for parts of the country, such as the Southeast, with limited wind-power potential.
“This isn’t even close to being over,” said Tom Kuhn, president of Edison Electric Institute, the lobbying group for publicly traded utilities, in a statement. “The House vote is going to throw a wrench into House and Senate efforts to reconcile their two bills and produce something acceptable to both chambers.”
From the New York Times.
The utilities provision, or the so-called renewable electricity standard amendment, was among the most contested measures in the energy bill. Sponsored by Representative Tom Udall, Democrat of New Mexico, and several others, it will force utilities to make a significant share of their electricity from solar, wind, geothermal, water and other nonfossil fuel sources, although they can meet part of the requirement through conservation measures.
The standard applies only to investor-owned utilities and exempts rural electric cooperatives, municipal utilities, the Tennessee Valley Authority and the state of Hawaii from the mandate.
Why are rural electric co-ops and municipal utilities exempt?
Oh, yes: Tax increase — $16 billion. Prepare to pay more at the pump.
* A rhetorical question. The RECs and municipal utilities represent traditional constituencies for the House majority. Politics, not principle, shaped the renewable fuels requirement.
UPDATE (9:40 p.m.): The NAM and the Edison Electric Institute issued a news release yesterday on the renewable fuels requirement.
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