Renewable Portfolio Standards (RPS) are state mandates which require utilities to produce a certain amount of energy from renewable sources of energy, such as wind, solar and biofuel, within a specific time frame. The standards vary from state to state - for example, North Carolina mandates 12.5% clean energy production by 2021 while Colorado calls for 30% by 2020.
The Economic and Environmental Benefits of the RPS
An RPS encourages investment in clean energy sources, creates jobs (30,000 in 2012 alone), and increases the resilience of the energy grid. They also help to reduce greenhouse emissions and address climate change. And finally, an RPS can help increase competition within the energy market and level the playing field against fossil fuels that have long been recipients of government subsidies and incentives. They can also lead to lower energy prices: In the Midwest, cheaper wind energy has helped reduce wholesale electricity costs by 40 percent since 2008.
Bipartisan Support for RPS
Earlier this year, New York announced it would spend $250 million to support new alternative energy projects statewide, in addition to the 54 renewable energy generation facilities the state is already buying power from. Kansas’ RPS, meanwhile, sparked $3 billion in investments in 2012 alone, and has led to the creation of 13,000 jobs since it took effect in 2009. “Investment in the renewable energy economy is creating jobs across all employment sectors,” says Republican Kansas Governor Sam Brownback, a vocal clean energy supporter and one of nine Republican governors in the Governor’s Wind Energy Coalition.
Currently, 38 states, plus Washington, DC, have some type of standard in place, according to the Center for Climate and Energy Solutions. Seven of those are considered voluntary targets; the rest mandate a specific amount of electricity be generated from renewable or alternative sources by a given date.
Proposed Federal RPS
A national RPS, which would have required 25% of energy generation from renewable sources by 2025, was proposed in 2010. According to one estimate, that would have created 297,000 jobs, saved consumers over $64 billion, and cut emissions by 277 million metric tons each year. That effort was not successful, but it offers clear evidence of the benefits of renewable portfolio standards. Countries that do have a national RPS in place include Britain, China, Poland and Chile.
Despite widespread public support, renewable energy standards are under attack in numerous states, often at the behest of oil funded interest groups. Recently, the American Legislative Exchange Council (ALEC), a group supported by, among others, ExxonMobil and the Koch brothers, introduced the “Electricity Freedom Act.” This piece of so-called “model legislation” would repeal a state’s RPS, meaning utilities would no longer need to include renewable energy in their mix and those energy sources would lose a significant market foothold. That would kill jobs and weaken these states’ economies.
The legislation has been introduced in as many as 11 states this year. In Kansas, efforts to repeal the state’s RPS have failed. In North Carolina, the first state in the Southeast to implement an RPS, House Bill 298 has passed a committee of the state's House of Representatives 11-10. In Ohio, efforts are underway to repeal the State’s Alternative Energy Portfolio Standard.
Last year, however, ALEC-backed efforts to weaken or repeal an RPS were introduced in 19 states, and passed in Ohio, New Hampshire, and Virginia.