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Friday, November 26, 2010

Options for a Federal Renewable Electricity Standard


Richard J. Campbell
Specialist in Energy Policy

The choice of power generation technology in the United States is heavily influenced by the cost of fuel. Historically, the use of fossil fuels has provided some of the lowest prices for generating electricity. But growing concerns over greenhouse gas emissions and other environmental costs associated with burning fossil fuels are leading some utilities and energy providers to deploy more renewable energy technologies to meet power demands.

State governments have generally led the way in encouraging deployment of renewable energy technologies. Many states are essentially picking up where federal research and development dollars left off, using a Renewable Portfolio Standard (RPS) to create a market for renewable energy via mandatory requirements. While most RPS goals are expected to be met, about 12 states have existing provisions expiring by 2015, and approximately 14 states and the District of Columbia have existing RPS or related provisions scheduled to expire by 2020.

Wide-scale deployment of renewable energy technologies is at the heart of policy discussion for a national Renewable Electricity Standard (RES), which would require certain retail electricity suppliers to provide a minimum percentage of the electricity they sell from renewable energy sources or energy efficiency. Green jobs growth from renewable and clean energy development is one of the goals of RES policy development; however, embedded energy efficiency requirements could also act to reduce the need for new renewable electricity generation facilities. An alternative Clean Energy Standard would provide incentives to certain advanced coal and nuclear facilities while also targeting retirement of older, polluting fossil fuel generation. Most of the opposition to an RES concerns the potentially higher cost to consumers of compliance using renewable electricity technologies.

The United States has traditionally relied primarily on market forces and temporary tax incentives to encourage the development and deployment of new technologies. This strategy is the “business as usual” model. However, several other forces are in play that call into question the “business as usual” model for innovation and deployment of renewable energy technologies. Even with generous tax incentives, non-hydro renewable electricity constituted approximately 4% of U.S. electric power industry capacity as of 2009. If renewable electricity is to play a larger role in the electricity future of the United States, many maintain that federal action may be necessary. As a result, some observers have argued for governmental intervention to bolster and accelerate U.S. activities relating to renewable energy.

A federal RES could offer an opportunity to drive renewable energy market growth by creating a compliance requirement nationally, bridging the gap of expiring or lower state RPS standards into future years. A Feed-in Tariff (FIT) is an alternative incentive concept to drive renewable energy growth via a mandatory purchase requirement by electric utilities. However, current U.S. law limits options for a national FIT.

The future global clean energy market has been estimated by 2020 to have sales as high as $2.3 trillion, and, as such, would be one of the world’s biggest industries. Many nations are moving to secure a share of the expected rewards. Many argue what still appears to be missing is a longterm U.S. national energy policy that fully considers the costs and benefits of paths forward. The vision and clarity of a U.S. plan of action coming out of a well-defined national energy policy could provide the transparency and regulatory certainty the investment community has long claimed as necessary to help finance the modernization of the U.S. electricity sector.



Date of Report: November 12, 2010
Number of Pages: 31
Order Number: R41493
Price: $29.95

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Monday, November 22, 2010

Options for a Federal Renewable Electricity Standard


Richard J. Campbell
Specialist in Energy Policy

The choice of power generation technology in the United States is heavily influenced by the cost of fuel. Historically, the use of fossil fuels has provided some of the lowest prices for generating electricity. But growing concerns over greenhouse gas emissions and other environmental costs associated with burning fossil fuels are leading some utilities and energy providers to deploy more renewable energy technologies to meet power demands.

State governments have generally led the way in encouraging deployment of renewable energy technologies. Many states are essentially picking up where federal research and development dollars left off, using a Renewable Portfolio Standard (RPS) to create a market for renewable energy via mandatory requirements. While most RPS goals are expected to be met, about 12 states have existing provisions expiring by 2015, and approximately 14 states and the District of Columbia have existing RPS or related provisions scheduled to expire by 2020.

Wide-scale deployment of renewable energy technologies is at the heart of policy discussion for a national Renewable Electricity Standard (RES), which would require certain retail electricity suppliers to provide a minimum percentage of the electricity they sell from renewable energy sources or energy efficiency. Green jobs growth from renewable and clean energy development is one of the goals of RES policy development; however, embedded energy efficiency requirements could also act to reduce the need for new renewable electricity generation facilities. An alternative Clean Energy Standard would provide incentives to certain advanced coal and nuclear facilities while also targeting retirement of older, polluting fossil fuel generation. Most of the opposition to an RES concerns the potentially higher cost to consumers of compliance using renewable electricity technologies.

The United States has traditionally relied primarily on market forces and temporary tax incentives to encourage the development and deployment of new technologies. This strategy is the “business as usual” model. However, several other forces are in play that call into question the “business as usual” model for innovation and deployment of renewable energy technologies. Even with generous tax incentives, non-hydro renewable electricity constituted approximately 4% of U.S. electric power industry capacity as of 2009. If renewable electricity is to play a larger role in the electricity future of the United States, many maintain that federal action may be necessary. As a result, some observers have argued for governmental intervention to bolster and accelerate U.S. activities relating to renewable energy.

A federal RES could offer an opportunity to drive renewable energy market growth by creating a compliance requirement nationally, bridging the gap of expiring or lower state RPS standards into future years. A Feed-in Tariff (FIT) is an alternative incentive concept to drive renewable energy growth via a mandatory purchase requirement by electric utilities. However, current U.S. law limits options for a national FIT.

The future global clean energy market has been estimated by 2020 to have sales as high as $2.3 trillion, and, as such, would be one of the world’s biggest industries. Many nations are moving to secure a share of the expected rewards. Many argue what still appears to be missing is a longterm U.S. national energy policy that fully considers the costs and benefits of paths forward. The vision and clarity of a U.S. plan of action coming out of a well-defined national energy policy could provide the transparency and regulatory certainty the investment community has long claimed as necessary to help finance the modernization of the U.S. electricity sector.



Date of Report: November 12, 2010
Number of Pages: 31
Order Number: R41493
Price: $29.95

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Document available via e-mail as a pdf file or in paper form.
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Penny Hill Press  or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.

The Low Income Home Energy Assistance Program (LIHEAP): Program and Funding


Libby Perl
Specialist in Housing Policy

The Low Income Home Energy Assistance program (LIHEAP), established in 1981 as part of the Omnibus Budget Reconciliation Act (P.L. 97-35), is a block grant program under which the federal government makes annual grants to states, tribes, and territories to operate home energy assistance programs for low-income households. The LIHEAP statute authorizes two types of funds: regular funds, which are allocated to all states using a statutory formula, and emergency contingency funds, which are allocated to one or more states at the discretion of the Administration in cases of emergency as defined by the LIHEAP statute.

States may use LIHEAP funds to help households pay for heating and cooling costs, for crisis assistance, weatherization assistance, and services (such as counseling) to reduce the need for energy assistance. According to the most recent data available from the Department of Health and Human Services (HHS), in FY2006, 49.6% of funds went to pay for heating assistance, 3.6% of funds was used for cooling aid, 17.8% of funds went to crisis assistance, and 10.0% was used for weatherization. The LIHEAP statute establishes federal eligibility for households with incomes at or below 150% of poverty or 60% of state median income, whichever is higher, although states may set lower limits. However, in both the FY2009 and FY2010 appropriations acts, Congress gave states the authority to raise their LIHEAP eligibility standards to 75% of state median income. In FY2008, the most recent year for which HHS data are available, an estimated 33.5 million households were eligible for LIHEAP under the federal statutory guidelines. According to HHS, 5.4 million households received heating or winter crisis assistance and approximately 600,000 households received cooling assistance that same year.

For FY2011, the Senate Appropriations Committee reported the FY2011 Departments of Labor, Health and Human Services, and Education (LHE) appropriations bill (S. 3686) on August 2, 2010. The bill would provide $3.3 billion for LIHEAP. Of this amount, approximately $2.7 billion would be distributed as formula grants and $590 million as emergency contingency funds. The formula grants would be divided between “old” formula ($2.2 billion) and “new” formula ($505 million). The House LHE Subcommittee would provide a total of $5.1 billion for FY2011, although the division of funding between formula grants and emergency contingency funds is not specified. As of the date of this report, LIHEAP is funded under the FY2011 Continuing Resolution (P.L. 111-242) at the FY2010 level ($4.5 billion in formula grants). However, because S. 3686 would provide less funding for LIHEAP than in FY2010, states have received first quarter allocations based on the $2.7 billion level.

In FY2010, Congress appropriated $5.1 billion for LIHEAP (P.L. 111-117), the same amount that was appropriated in FY2009. Of this amount, approximately $4.5 billion was appropriated as regular funds and $590 million as emergency contingency funds. The FY2010 appropriation also maintained the distribution of regular funds set out in the FY2009 appropriations act, with approximately $840 million allocated according to the “new” LIHEAP formula and the remainder—approximately $3.67 billion—distributed according to the proportions of the “old” formula. Three distributions of emergency contingency funds were made during FY2010—see Table A-1.

This report describes LIHEAP funding, current issues, legislation, program rules, and eligibility.



Date of Report: November 8, 2010
Number of Pages: 28
Order Number: RL31865
Price: $29.95

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Tuesday, November 16, 2010

Clean Coal Authorizations, Appropriations, and Incentives


Anthony Andrews
Specialist in Energy and Defense Policy

Molly F. Sherlock
Analyst in Economics


Coal-burning power plants provide nearly half of the electricity generated in the United States. They are also responsible for emitting carbon dioxide, a greenhouse gas associated with global warming. A major goal of current federal support and incentives for coal is managing carbon dioxide emissions. The term “clean coal” is applied to technologies that would capture the COfrom burning coal and sequester it underground in geologic reservoirs.

Most of the current clean coal related programs have been authorized through four titles under the Energy Policy Act of 2005 (P.L. 109-58). Title III (Oil and Gas) directed the Secretary of Defense to develop a strategy for using fuel produced from coal. Title IV (Clean Coal Power Initiative) intended to demonstrate advanced clean coal-based power generation technologies on a commercial scale. Title IX (Research and Development) included programs for coal related technologies, carbon capture, and coal mining. Title XVII (Incentives for Innovative Technologies) offered loans to eligible projects that “avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases” while employing new or improved technologies (which included coal gasification).

Recent appropriations made over $900 million available for Department of Energy clean coal programs, and recent economic stimulus legislation appropriated an additional $3.2 billion. Department of Defense certification of coal-based synthetic jet fuel potentially offers a stimulus for private investment in coal-to-liquid jet fuel plants. The Department of Energy has also announced loan guarantee opportunities for innovative technologies to capture and sequester carbon. Investment tax credits have also been available for investments in clean coal facilities. The American Clean Energy and Security Act (H.R. 2454) would establish a government chartered corporation to research carbon storage through fees charged to customers of coalburning utilities.



Date of Report: November 1, 2010
Number of Pages: 16
Order Number: R40662
Price: $29.95

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The Federal Government’s Role in Electric Transmission Facility Siting


Adam Vann
Legislative Attorney

The location and permitting of electricity transmission lines and facilities have traditionally been the exclusive province of the states, with only limited exceptions. However, the increasing complexity of the interstate transmission grid, as well as widespread power outages in recent history, has resulted in calls for an increased role for the federal government in transmission siting in an attempt to enhance reliability.

The Energy Policy Act of 2005 (EPAct; P.L. 109-58) established a role for the Department of Energy (DOE) and the Federal Energy Regulatory Commission (FERC) in making transmission siting decisions. The act directed DOE to create “transmission corridors” in locations that would help to ease strain on the interstate electricity transmission grid. The act also granted FERC secondary authority over transmission siting in the corridors. This new federal role in a decisionmaking process that had previously been the province of state governments was predictably met with resistance from those seeking to protect local and regional interests. However, the process of creating “transmission corridors” and increasing the federal role in transmission siting has moved forward. Indeed, there have been calls for further expansion of the federal role in transmission siting by some policymakers and commentators.

This report looks at the history of transmission siting and the reason behind the movement toward an increased federal role in siting decisions, explains the new federal role in transmission siting pursuant to EPAct, and discusses legal issues related to this and any potential future expansions of the federal role.



Date of Report: October 28, 2010
Number of Pages: 17
Order Number: R40657
Price: $29.95

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Document available via e-mail as a pdf file or in paper form.
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Penny Hill Press  or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.