Jun 15 2007

Senate bill would set minimums for renewable power Alabama Power, state regulators oppose it

Birmingham News

By Mary Orndorff

Utility companies would have to get 15 percent of their power from renewable sources such as wind and solar under a proposal now pending in the Senate. 

But the measure is opposed by Alabama's largest utility and its state regulators.

Advocates say the 15 percent mandate would increase the use of more environmentally friendly power and lessen the reliance on limited and dirtier fossil fuels such as coal.

Opponents, including the Southern Co., Alabama Power's parent, say Southeastern states can't meet the tougher standard. The high cost of failing to meet that standard would be passed onto consumers. Edison Electric Institute, which represents U.S. shareholder-owned electric companies, has said the cost in Alabama could be $7.9 billion over 23 years. 

The debate in the Senate on the proposal from Sen. Jeff Bingaman, D-N.M., breaks largely along geographic lines, pitting states with reliable mountaintop breezes and steady sunshine against those without.

"This ... standard would reduce our dependence on traditional polluting sources of electricity. It would reduce our dependence on foreign energy sources. It would reduce the growing pressure on natural gas as a fuel for the generation of electricity. It would reduce the price of natural gas," Bingaman said. "Those are some of the benefits."

Bingaman's proposal, known as the renewable portfolio standard, is an amendment to an overall energy policy bill and could come to a vote next week.

Alabama's senators will be voting against it.

"The goal is worthy but my analysis is that the burden will fall disproportionately on constituents in my area of the country, particularly my state," Sen. Jeff Sessions, R-Ala., said Thursday.

Utilities that didn't meet the standard would have to pay, a cost that would show up in monthly power bills, said Sen. Richard Shelby, R-Ala.

"They don't call it a tax, but that's what it is," Shelby said. "We don't have a lot of wind (or sunshine). Nature decides a lot of that and to punish our hardworking people because of that, that defies logic to me."

Phased in until 2020:

More than 20 states, mostly in the West and Northeast, already have some requirement for the use of renewable energy, but Bingaman's bill would be a national standard. It would phase in over several years, from 3.75 percent in 2010-12 to 15 percent by 2020.

The types of power that would qualify are wind, solar, ocean, geothermal, biomass and landfill gas. Only increases in hydropower would be eligible, not what is already being produced. Nuclear is not included, either.

The list is too limited for states such as Alabama, according to the opponents, because of too many cloudy days and not enough steady winds.

Alabama Power and Atlanta-based Southern Co. are carefully lobbying against the standard, saying they support the goal of using more renewable energy sources but they oppose the rigid standard.

"It doesn't take into account that many renewable sources are inconsistent in performance and reliability, depending on the region," said Mike Tyndall, a spokesman for Southern Co.

Southern Co. generates about 1 percent of its power from renewable sources such as methane gas and biomass, like burning switch grass, and zero from solar or wind. To get to 15 percent, the four-state utility with 4.3 million customers would need 6,600 wind turbines or 190 square miles of solar panels or 5,800 square miles of switch grass, according to information the company is providing to Congress.

For utilities that don't meet the standard, it would cost 2 cents per kilowatt hour to reach compliance. Southern Co. estimates its cost would be $13 billion over 23 years.

Sessions said a "secret, unstated" goal of the renewable standard is to drive up the price of electricity so high that people use less of it.

"That's not good. Our goal as a nation should be safe, clean energy that is available at a cost as low as possible," Sessions said.

Higher consumer prices:

The Alabama Public Service Commission joined regulators from other Southern states in opposing the 15 percent standard, arguing that utilities in Alabama would be forced to buy credits because they couldn't produce enough wind or solar power to meet it.

"Correspondingly, our retail electricity consumers will end up paying higher electricity prices with nothing to show for it," they wrote to Congress.

The Tennessee Valley Authority generates less than 1 percent of its power from solar, wind and methane gas projects in its territory. Although TVA has not taken a formal position on the renewable standard, it provided Congress information that it would cost the utility $70 million in 2011 and $410 million in 2020.

Employees and political action committees affiliated with Southern Co. combined to be the top source of campaign contributions to Shelby's re-election account over the past five years, at $73,750, according to a tally from the Center for Responsive Politics. They are the second largest contributor over the same time frame to Sessions, at $34,600.