This document contains our responses to the questions posted by Sens. Bingaman and Murkowski in their recently released white paper on a clean energy standard (CES). Based on the instruction from the Senate Energy and Natural Resources Committee for submittals, there are instances of overlap in our responses.
The six main points from the Center’s detailed responses to the clarifying questions posted by Sens. Bingaman and Murkowski:
- What should be the threshold for inclusion in the new program?
- Given that clean energy sources are available at various scales and across the country, a CES should apply to all utilities in all states.
- A federal CES should be distinct from and not preempt state programs.
- What resources should qualify as “clean energy”?
- Given the power sector’s need for long-term regulatory certainty regarding GHG emissions and the difficulty of defining “clean energy” according to multiple criteria, a CES should provide credits as a function of carbon intensity.
- A CES should provide credit to carbon capture and storage (CCS) retrofits.
- How should the crediting system and timetables be designed?
- A CES should provide credit only to new clean energy facilities and incremental output from existing facilities. Generation from existing clean energy facilities should be excluded from the “base quantity” of electricity sales to which the CES percentage targets apply.
- How will a CES affect the deployment of specific technologies?
- Modeling results suggest that a CES can promote the deployment of a balanced mix of natural gas, renewables, and nonrenewable non-emitting technologies. The roles of specific technologies will depend on their availability and relative costs.
- How should Alternative Compliance Payments, regional costs, and consumer protections be addressed?
- A CES that provides credits as outlined above can minimize regional disparities. The more compliance flexibility that a CES includes, the smaller the impacts will be for households and businesses. For example, providing temporal compliance flexibility through credit banking and limited borrowing can make a CES more cost-effective An Alternative Compliance Payment should be set at a level that provides cost containment while still meeting the nation’s goals for technology deployment and emissions reduction and should escalate in real terms.
- How would the CES interact with other policies?
- A CES that effectively required that 80 percent of U.S. electricity come from clean energy by 2035 would likely achieve power-sector GHG emission reductions consistent with U.S. goals for broader GHG emission reductions required to address concerns about climate change (e.g., an 80 percent economy-wide reduction by 2050).
- A CES would not address all of the challenges (e.g., market failures and barriers) facing clean energy technologies and should be complemented by technology-specific policies and support for clean energy research and development.