D.C. Citizens United for Clean Energy

Myth: The RES will be costly to consumers.
Fact: A renewable energy standard will have virtually no impact on electricity prices. Several studies conducted by the federal government’s own Energy Information Administration (EIA) show that a national 10% by 2020 RES would not significantly impact electricity prices and could save consumers money on their energy bills. EIA’s most recent analysis, in May 2003, found that the 10% RES would have no impact on electricity prices through 2017, and would be less than one-tenth of a cent per kilowatt-hour higher than business as usual after that. A March, 2003 study by Synapse, an energy consulting firm, found that a Maryland RES similar to the one introduced in the District would actually result in a negligible impact on electric bills or even result in a slight decrease in customers electric bills.

Fact: The RPS can reduce natural gas prices and total consumer energy bills. EIA’s national RPS studies show that increased renewable energy use creates new competitors to traditional power plants, reducing the demand for natural gas, and helping to lower its price. According to EIA, reaching 10% renewable electricity could reduce consumer natural gas prices by as much as 6% ($0.26 per million Btu) in 2020 compared to business as usual. Lower natural gas prices for electricity generators and other consumers offset the slightly higher cost of renewable electricity technologies. Even using high estimates of renewable energy technology costs and future natural gas price projections below even today’s costs, EIA last year found that a 10% RES can reduce both natural gas and electricity bills, saving energy consumers $13.2 billion between 2002 and 2020 (net present value).

Myth: Renewable sources are not reliable and they will impose additional costs on consumers.
Fact: The RPS creates competition and demand for both intermittent and continuously available renewable energy sources. The US electric system is designed to handle unexpected swings in energy supply and demand far larger than those imposed by renewable sources. Several important renewable energy sources, such as geothermal, bioenergy, biomass and landfill gas systems can operate around the clock. Solar energy is also generally most plentiful when it is most needed—during periods of peak electricity demand. Renewable energy can increase the reliability of the overall system, by diversifying our resource base and using supplies that are not vulnerable to periodic fuel shortages or other supply interruptions. There are several areas in Europe where wind power alone already supplies over 20% of the electricity with no adverse effects on the reliability of the system. Several states have found that renewable installations, even above the levels contemplated in this RES, does not affect their transmission models.

Myth: The requirements in the bill are impossible to meet and will force rate increases on consumers.
Fact: The Renewable Energy Standard allows electric retailers to buy and sell renewable energy credits (RECs) throughout the electricity region served by suppliers in Pennsylvania, New Jersey and Maryland. This market-based system allows companies to buy or sell clean energy from anywhere in the Mid-Atlantic region at the least possible cost in order to meet their requirement. For example, a utility in the District could buy renewable energy credits from wind farms in Western Maryland or landfill gas generated electricity from New Jersey. .

Fact: The region has significant renewable energy potential. This Mid-Atlantic region is blessed with a rich and diverse pool of renewable energy resources that can be developed to enable electricity suppliers to meet their renewable requirement. For example, according to the Department of Energy, the state of Maryland has the technical potential to generate 15 percent of its energy needs from renewable sources. Pennsylvania could generate 60 percent and the states of Delaware and New Jersey could generate 50 percent and 26 percent of their energy needs respectively.

Fact: The RES is technologically and economically feasible. The 11% renewable energy standard would represent a significant increase in renewable energy generation from today’s level of about 2% of electricity sales (not including hydropower). Our current level of renewable energy generation is shamefully low compared to our abundant, cost-effective renewable energy potential. New Jersey has already adopted a RES much more aggressive than that proposed for the District. The legislatures of both Pennsylvania and Delaware are also contemplating aggressive RES legislation.

April, 2004