Housing and Economic Recovery Act Cashes in on Clean Energy

Fellow Picken Planners,

Recently the Housing and Economic Recovery Act of 2008 was signed into law. One thing most people might have missed with this Act is the H.Amdt. 748 Amendment that requires electric suppliers, other than governmental entities and rural electric cooperatives, to provide 15 percent of their electricity using renewable energy resources by the year 2020.

So what does that mean?? Well in a July 2007 report—Cashing In on Clean Energy—the Union of Concerned Scientists (UCS) used an Energy Information Administration (EIA) model to examine the long-term effects on the economy and the environment examining the effects on consumers and the environment of the 15 percent by 2020 national standard.

They present results under two scenarios—a “higher renewable energy case” and a “lower renewable energy
case”—in order to account for the range of impacts that could occur depending on how states implement
provisions that (1) allow energy efficiency to count toward a portion of the annual targets, and (2) allow
additional renewable energy generation from states with targets that are higher than the national
standard. Under both cases, our analysis found that the 15 percent national standard would
provide important consumer and environmental benefits for America.

Consumer Savings
Under the 15 percent national standard higher renewable energy case, consumers in all sectors of
the economy would experience a reduction in both their cumulative electricity and natural gas costs
compared with business as usual. Cumulative savings would reach $13 billion by 2020 and, by
2030, would grow to $27.7 billion ($8.6 billion for households, $12.6 billion for commercial customers, and
$6.5 billion for industrial customers)

The national renewable standard saves consumers money by reducing the demand for fossil fuels through energy
efficiency and renewable energy, creating new competitors in the U.S. energy market. As a result, energy companies are limited in their ability to raise fossil fuel prices in the future. Compared with business as usual, natural gas (and coal) therefore cost less for electricity generation as well as for other purposes (e.g. home heating), benefiting both electricity consumers and natural gas consumers. Under the 15 percent national standard higher renewable energy case, average consumer prices for both electricity and natural gas would be slightly lower than business as usualin nearly every year of the forecast, with an average annual reduction of 1.1 percent for electricity and 0.6 percent for natural gas.

So hopefully this is a good sign of the changes to come!