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The Renewable Portfolio Standards Act

From dKosopedia

Act IX of Energize America



To create a fair, consistently regulated and competitive energy market that meets the strategic needs of energy security for the United States and dramatically reduces greenhouse gas emissions.


The Renewables Portfolio Standard (RPS) is a flexible, market-driven policy that can ensure that the public benefits of wind, solar, biomass, and geothermal energy continue to be recognized as electricity markets become more competitive. The policy ensures that a minimum amount of renewable energy is included in the portfolio of electricity resources. By increasing the required amount over time the RPS can help make the electricity industry increasingly sustainable. Because it is a market standard, the RPS relies almost entirely on the private market for its implementation. Market implementation will result in competition, efficiency and innovation that will deliver renewable energy at the lowest possible cost. Renewable Energy Credits, or "RECs," are central to the RPS. A REC is a tradable certificate of proof that one kWh of electricity has been generated by a renewable-fueled source. Credits are denominated in kilowatt-hours (kWh) and are a separate commodity from the power itself.

The Renewable Standards Portfolio Act will provide a consistent but flexible market framework for the nation’s future energy infrastructure. Nineteen states already mandate that small amounts of retail electricity sold within their borders come from renewables, and other states are considering similar requirements. With milestones set at 5, 10 and 15 years, and assisted by tradable Renewable Energy Credits, this act will require all but the smallest utilities to generate 15% of their electricity from renewable energy sources by 2020. Companies that generate power from qualifying renewable facilities will be issued RECs that they can hold for their own use or sell to others. Plants that fail to meet the targets will be forced to either purchase RECs from others that have exceeded their goals, or pay fines.


The Renewable Standards Portfolio Act is a linchpin in the migration to a clean and abundant energy future, as it provides clear and compelling long-term objectives and opportunities for the renewable energy industry. This Act will spur significant private sector investment in renewable energies and will unleash much of the public financing required for Act 4 – Community-Based Energy Investment Act.


The Renewable Standards Portfolio Act will cost an estimated $50M through 2020, primarily in program oversight within the Department of Energy.

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This page was last modified 03:06, 2 June 2006 by Arthur Smith. Content is available under the terms of the GNU Free Documentation License.

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