Activists warn of deregulation shortcomings

Current appropriation levels do not provide adequate funding to meet public power's demand for the Renewable Energy Production Incentive Program.

September 3, 1999
Web posted at: 5:02 p.m. EDT (2102 GMT)

The environment stands to lose out in a deregulated electricity market unless strong incentives for renewable energy are included in restructuring legislation, a coalition of energy activists said Wednesday.

"In a deregulated market, the pressure is going to be to supply the cheapest priced electricity possible. Thus investments in renewable energy will be decreasing," said Eric Wesselman of the Union of Concerned Scientists.

The Union of Concerned Scientists and 15 other member organizations of the Sustainable Energy Coalition sent a letter Wednesday to Rep. Joe Barton, R-Texas, that critiques the incentives for renewable energy included in the draft version of his Electricity Competition and Reliability Act.

Barton's legislation would reauthorize the Renewable Energy Production Incentive program û a program that supports the commercialization and use of renewable energy electricity generation systems. Qualified electrical cooperatives that generate and sell renewable electricity can participate in the program and receive payments of 1.5 cents per kilowatt-hour.

Rep. Joe Barton's Electricity Competition and Reliability Act does not go far enough to ensure incentives for renewable energy, activists say.

"The Renewable Energy Production Incentive Program alone, included in the draft bill, will not provide enough certainty for renewable energy investors or developers," wrote the coalition.

The incentive program relies on the annual appropriations process to secure its funding. Current appropriation levels do not provide adequate funding to meet public power's demand for the program, according to the coalition.

Barton's decision to rely on the Renewable Energy Production Incentive was garnered from testimony given by House members and public interest groups at hearings of the House Commerce Committee's Subcommittee on Energy and Power, said Samantha Jordan, a spokeswoman for Barton.

To ensure that renewable energy does not fall at the wayside in a deregulated utility market, the coalition recommends that Barton include a trust designed to restore industry investment in energy efficient technologies and a mechanism that ensures that a percentage of the nation's electricity is produced from renewables.

"There is this demand to create cheap power, but what about the externalities, water pollution, air pollution ... older plants can produce cheap electricity but they pollute a lot more," said Wesselman.

Jordan said that the coalition's concerns would be considered as the final draft of the bill is authored this fall. While no date is set for introduction of the legislation, it looks like it should be before the House by the end of the year, she said.

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