Clean Energy Standard Update

Since President Obama's State of the Union address announcing the Administration goal of setting a Clean Energy Standard (CES) deliberations have shifted to Congress. The President has called for utilities to meet a target of 80 percent of their electricity from sources such as solar, wind, natural gas, nuclear and so-called clean coal by 2035 but the real work now begins in moving this through the legislative process. Bipartisan congressional leadership is where this will have to begin and end if the President's goal is to become a reality. In the Senate, most of the anticipated action will take place in the Senate Energy & Natural Resources Committee (SENR) where the bipartisan leadership of Chairman Bingaman and Ranking Member Murkowski are essential for success. Senator Bingaman met with President Obama at the White House shortly after the State of the Union to discuss the CES but has remained guardedly supportive of the President's proposal. Senator Murkowski remains in a listening mode but open to the discussion. Today, Majority Leader Harry Reid indicated that Murkowski and Bingaman "have an agreement on the standard." However, within hours of that statement Murkowski stated that the Majority Leader had "jumped the gun." Reaching bipartisan agreement will come down to definitions of what is "clean." "Clean" in the White House agenda focuses on air emissions, primarily greenhouse gas emissions. However, opponents of that approach are more focused on the broader lifecycle of environmental impacts associated with any given energy source. Some don't consider coal even with carbon capture & storage to be clean noting coal ash and other challenges to the sector. Others don't consider nuclear "clean" citing waste issues in particular. Secretary Chu during testimony today before SENR on the DOE budget was specific in describing eligible clean energy sources as including nuclear as noted here in a section of his written testimony: "A Clean Energy Standard will provide a clear, long-term signal to industry to bring capital off the sidelines and into the clean energy sector. It will grow the domestic market for clean sources of energy – creating jobs, driving innovation and enhancing national security. And by drawing on a wide range of energy sources including renewables, nuclear, clean coal and natural gas, it will give utilities the flexibility they need to meet our clean energy goal while protecting consumers in every region of the country." In the Senate, feasibility of a CES will largely come down to how many votes will be gained by broadening the definition of "Clean" as envisioned by the Obama Administration versus the number of votes that will be turned off by such an approach. One can expect Senate hearings and negotiations to begin in earnest on a CES in mid-to-late March at the earliest. Feasibility of the Clean Energy Standard in the House of Representatives appears to be more a matter of overcoming distaste by Republican leadership for perceived government mandates of such a legislative approach. House Energy and Power subpanel chairman Ed Whitfield, speaking this morning to National Electricity Forum made his view known on a CES: "My preference is that we not try to establish a federal standard. Now there are some on my committee that disagree with that, I know that some in the Senate disagree with that. So that's another issue that we'll be looking at as we move forward."

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