State Renewable Energy Standards Under Attack from GOP Legislators

Legislators in Montana, Colorado, Minnesota and Missouri are trying to weaken or dismantle RPS policies, creating instability in clean energy markets

Credit: Alex Snyder

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Includes correction added May 23

Republican legislators in Montana, Colorado, Minnesota and Missouri are separately trying to weaken or dismantle the renewable portfolio standards in their states, which are seen as crucial to U.S. efforts to reduce greenhouse gas emissions and develop a globally competitive clean economy.

Officials pushing the bills say that energy prices soar and consumers suffer when utilities are required to allocate a certain percentage of electricity from renewable sources like wind and solar. Clean energy groups counter that lowering the bar on state renewable energy policies would stifle new investment and kill jobs.

If passed, the bills would go against the trend among most states to strengthen standards and attract clean energy developers by creating a market for renewables, said Jessica Shipley, a fellow at the Washington-based Pew Center on Global Climate Change.

“I suspect [the bills] have to do with the recent tough economic times and the concern that regulations impose additional costs on businesses,” she told SolveClimate News. “But I wouldn’t consider it a big movement to repeal RPS across the board.”

Twenty-seven states and the District of Columbia have mandatory standards in place, and seven states have renewable portfolio goals, according to U.S. EPA figures. In the last two years, states such as California, New York, Nevada and Colorado have voted to increase or even double their requirements.

Shipley said that states act as a kind of laboratory of best practices and success stories for federal climate policy. President Obama in his State of the Union address last month called for 80 percent of the country’s electricity to come from cleaner sources by 2035, such as solar, wind, natural gas, nuclear and “clean coal.”

Warren Leon, a consultant to the Vermont-based Clean Energy States Alliance, said he wasn’t surprised to hear about the repeals.

“Budgets are tight at the state level, and people are rightfully looking at ways to save money. So a lot of ideas get thrown out there,” he said.

However, he added: “Renewable generation diversifies the electricity supply and tends to make electricity prices less vulnerable to fluctuations in fossil fuel prices. In the case of New York and California, where the [energy commissions] have evaluated their RPS’s, they have found that … the net effect is to lower electricity prices.”

Montana: Wind Boom at Risk

In Montana, the total cost of power from the Judith Gap Wind Project, a 135-megawatt wind farm run by developer Invenergy, is under $40 per megawatt hour, less than the cost of power generated from traditional fossil fuels, according to data from the Montana Environmental Information Center (MEIC).

Kyla Wiens, a MEIC energy advocate, said that the attempt to repeal Montana’s energy standards would pull the rug out from under wind developers looking to build more farms and capitalize on the second-highest wind energy potential in the United States.

Montana House Bill 224 aims to end the requirement that regulated utility companies get at least 15 percent of their energy from renewable sources by 2015. The House Federal Relations, Energy and Telecommunications Committee will vote on the initiative this week and, if they approve it, send the bill to the House floor.

Wiens said that two Montana utilities, Northwestern Energy — the state’s largest — and Montana-Dakota Utilities Co., had actively opposed repealing the RPS for fear that it would interfere with projects planned to help it meet the 15 percent target. In the years since the RPS was passed, Montana’s renewable energy has jumped from 2 megawatts in 2005 to more than 400 megawatts today, almost all from wind energy projects.

“Aside from the installed capacity, there have been jobs and capital investments and property taxes paid. It has really benefited some of those counties that hadn’t seen any type of economic development” in the past, she said.

Wiens continued: Repealing the RPS “causes uncertainty, and that’s never good for investment. If that’s taken away, it looks like we have an unstable political climate for renewable energy and that … is a concern for wind developers who have planned investments for now and the future.”

Colorado: Policy Scaleback Unlikely

Although Wiens is certain the Republican-controlled House in Montana will advance the committee’s bill to the Senate, Elise Jones of the Colorado Environmental Coalition is confident that efforts to scale back Colorado’s RPS will not get far at its hearing this month.

Colorado Senate Bill 71 would undo a law passed last year under former Gov. Bill Ritter that requires utilities to get 30 percent of their electricity from renewable sources by 2020, up from a 20 percent requirement and now one of the most aggressive standards in the nation. The bill would drop requirements to the 10 percent standard that voters approved in 2004, and which utilities have already exceeded.

Rep. Shawn Mitchell, who introduced the bill, said last month: “Voters approved a substantial move toward alternative energy as a reasonable step to see if it’s practical and cost-effective. This green fantasy of pushing it up to 20 and then 30 percent … punishes voters by replacing a modest experiment with an extreme one.”

But Jones, executive director of the environmental coalition, said that Coloradans strongly supported increasing the RPS in 2007 and again in 2010, and, for the most part, are backing the state’s push for a clean energy future.

“They recognize that clean energy has brought jobs and economic prosperity, and they don’t want to turn the clock backward,” she said.

She added that newly elected Democratic Gov. John Hickenlooper, formerly the mayor of Denver and a strong proponent of sustainable development, would likely keep such legislation from advancing into law.

“Not only do we have a renewable energy standard, but we’ve increased it twice, which sends a signal to new companies that this is the place to come if you want to be on the forefront of new business opportunities with wind and solar,” Jones said.

“From wind energy to a lot of small solar installation companies, the energy standard has helped trigger decisions both for companies to move to Colorado and also to expand in Colorado.”

Minnesota: ‘We Are Worried’

In Minnesota, Rep. Tom Hackbarth introduced a bill in late January to scrap the state RPS that calls for utilities to generate at least 25 percent of their power from renewables by 2025. The day earlier, the Office of Energy Security confirmed that utilities had met 2010 standards for clean energy, or 7 percent of Minnesota retail sales.

(This paragraph includes correction made on 5/23/2011) The Minnesota Chamber of Commerce has taken no public position on Hackbarth’s bill, although it is supporting an effort to lift a moratorium on new nuclear plants, which passed in the Senate early this month, and a bill repealing a ban on building large coal-fired power plants, which cleared its first House committee last week. Newly elected Gov. Mark Dayton, the first Democrat to be elected to the position in 20 years, promised in his campaign to reject efforts to lift the nuclear ban.

Linda Taylor, clean energy director of the St. Paul-based advocacy group Fresh Energy, said that she was cautiously optimistic that the RPS initiative wouldn’t make it to the House floor when it is heard in the next four to five weeks.

“A lot of bills have been introduced that would roll back energy policy in Minnesota by about 15 or 20 years, but the vast majority of them will never get heard and probably not pass. Renewable energy and energy efficiency have strong support across political boundaries,” she said.

Still, she added: “We are worried. It is not pleasant to be in this situation where we are constantly on the defensive mode trying to keep good policy in place.”

Missouri: Farm Communities ‘In Limbo’

In Missouri, legislators are poised to remove the geographic sourcing component of Proposition C, a 2008 law that requires investor-owned utilities to provide at least 15 percent of their electricity from renewable sources by 2021, of which 2 percent must be solar energy.

The RPS maintains that utilities must either generate energy from Missouri-based renewable sources, or directly import it from out of state — a common provision among state energy standards.

Last summer, the Joint Committee on Administrative Rules voted to remove the provision that the RPS apply to “all power sold to Missouri consumers,” allowing for utilities companies to instead purchase renewable energy credits (RECs) from any wind farm or solar plant worldwide, versus utilizing actual clean energy from a Missouri development or regional plant.

The House and Senate passed similar bills last month, and the Missouri General Assembly presented Democratic Gov. Jay Nixon with their proposal on Feb. 2. The governor has until next week to approve or veto the law.

Renew Missouri, a clean energy advocacy group that wrote Proposition C, says the law would slam the door on future renewable energy development in Missouri.

A geographic sourcing provision, they argue, creates local demand and attracts projects that bring jobs and investment to the state. It also reduces air and water pollution caused by fossil fuel-burning electricity plants that give off harmful greenhouse gases, which affords Missourians the benefits of clean energy.

“We currently have communities across the state that are in limbo because [wind farm] developers are not fully moving ahead until they have more certainty as to how the rules will apply to our RPS,” said Josh Jones, an organizer for the group.

“With this new interpretation of the rule, those developers almost certainly are going to shy away from moving forward on investments as they see that the market for renewable energy in Missouri has essentially evaporated overnight,” he said.

Jones pointed to a 2008 study by the University of Missouri St. Louis that predicts the RPS would create more than 9,500 direct jobs and generate $2.9 billion in direct economic activity in Missouri over the next two decades by encouraging cleantech developers to set up shop in the state.

Missouri now has 457 megawatts in installed wind energy and less than 1 megawatt in solar capacity.

Pew Center’s Jessica Shipley, however, said that while the in-state provision does bolster clean energy sectors in Missouri, allowing utilities to purchase RECs wouldn’t necessarily weaken the RPS.

“The energy would come from somewhere else, but it would be new renewable energy generation that wouldn’t have occurred otherwise,” she said. “The ability to trade credits across the states is a valuable compliance mechanism and allows or the least-cost energy across the country.”

Correction: An earlier version of this article incorrectly reported that the Minnesota Chamber of Commerce is backing State Rep. Tom Hackbarth’s bill to repeal Minnesota’s renewable portfolio standard. According to Jim Pumarlo, director of communications for the chamber, the group has “taken no position on the bill.”