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House bill would guarantee rates for clean-energy generators
Measure is first in Congress to bring successful German policy to the U.S.

June 26, 2008

Four House members filed legislation that would provide much-needed investment security in the renewable-energy sector.  U.S. Reps. Jay Inslee (D-Wash.), Bill Delahunt (D-Mass.), Jim McDermott (D-Wash.) and Mike Honda (D-Calif.) introduced the Renewable Energy Jobs and Security Act, which would provide guaranteed renewable-energy payments to small and mid-sized clean-energy suppliers up to 20 MW in size, which is the amount of power produced by about 10 wind turbines.

Modeled after a successful German policy called a feed-in tariff, the measure has three main components designed to provide long-term investment security: guaranteed interconnection to the grid; long-term, fixed-rate contracts with electric utilities; and, a rate-recovery program through a regional cost-sharing commission to minimize the impact on consumers.  Beyond creating secure investment opportunities for small, distributed-scale renewable electricity generators many of whom do not benefit from existing tax incentives, it also would help utilities in states like Washington meet renewable energy purchase obligations.

“The cost of inaction on global warming extends well beyond the serious ecologic and human-health impacts that already are taking a toll on our environment,” Inslee said this morning during a hearing in the House Energy and Commerce Subcommittee on Energy and Air Quality.  “There also is an opportunity cost if we fail to help America’s brightest entrepreneurs quench the public demand for clean-energy technologies here in the U.S.

“With hundreds of billions of dollars in capital slated for investment in the clean-energy sector in coming decades, we’d be fools if we didn’t ensure American manufacturers would be on the receiving end of this rapidly growing market.”

Delahunt, a co-sponsor of the Renewable Energy Jobs and Security Act, continued: “It is time for the United States to take a leadership role in the new ‘clean energy’ economy.  By giving our own consumers access to proven financial incentives and boosting demand for clean energy technology we can position the United States to become a world leader in this emerging sector of the global economy that has the potential to create thousands of new ‘green-collar’ jobs here at home.” 

McDermott, another co-sponsor of the bill, added: “America faces an infrastructure challenge today not unlike what we had to overcome a century ago to enable farmers to reliably deliver their goods to markets.  It is not enough to simply say we want to develop new clean and renewable energy resources; we have to facilitate the development and improvements in the transmission infrastructure that can reliably bring these new energy resources to market.  The Renewable Energy Jobs and Security Act will help us do just that and it will benefit Northwest ratepayers.” 

The feed-in tariff enacted in Germany in 2003 has helped the European nation achieve 55 percent of the world's installed solar capacity, provide 14 percent of its electricity supply from renewable sources and create at least 140,000 jobs.  Similar policies also have been adopted by France, Spain and over 40 other countries, provinces and states. 

In the United States, measures that would enact such a system already have been proposed or considered in over a dozen states.  Enacting a federal renewable-energy payments policy would streamline what could become a patchwork regulatory structure and an unstable investment climate for the U.S. domestic renewable energy market.  It also would complement incentives for renewable-energy deployment, such as existing federal-tax credits as well as proposed plans to cap carbon emissions and set federal renewable-electricity requirements, among others.

Under the Renewable Energy Jobs and Security Act, the Federal Energy Regulation Commission would set technology-specific prices that utilities would pay renewable-energy suppliers with up to 20 MW of capacity.  Prices would be reduced incrementally every two years over a two-decade span, with the goal of reaching or approaching market rate.

The legislation has been endorsed by over 80 non-governmental organizations, renewable-energy companies and clean-energy investors.  It is expected to be referred to the House Energy and Commerce Committee.  A companion measure has not yet been introduced in the Senate.

Read the letter of support for the Renewable Energy Jobs and Security Act