U.S. renewable portfolio standards face legislative challenges

Renewable portfolio standards require, generally, that electric utilities purchase a certain percentage of their energy supplies from renewable sources, such as wind, biomass, and solar. Presently, 27 U.S. states and the District of Columbia require their utilities to meet certain thresholds of renewable energy in their portfolios.

In several states, however, lawmakers have been moving to repeal or water down those standards. Reuters reports that Colorado, Minnesota, Missouri and Montana are all considering legislation which would eliminate or reduce the obligation of utilities to purchase electricity from renewable sources.

Colorado legislation originally required a renewable component of 10%, most recently amended in 2010 to 30% (by 2020). The Colorado senate is currently considering legislation currently that would roll the 30% requirement back to 10%. As this standard has already been met, presumably there would be no more legislative incentive for further renewable development.

In Minnesota, a bill has been introduced to repeal the state renewable mandate entirely. The legislation currently in force requires Minnesota utilities to meet a 25% renewable standard by 2025.

In Missouri, the repeal effort is not aimed at the threshold (the current requirement is 15% by 2021, including 2% by solar), but instead at repealing a provision currently in Missouri law that requires all of those renewable sources to be geographically located within Missouri. The proposal would allow Missouri utilities to meet their renewable obligations by using renewable energy credits. This proposal would be more in line with laws in other states, but has attracted considerable criticism in Missouri because of the perception that the bill would have the effect of exporting the benefits of renewable energy to outside Missouri.

Finally, in Montana, the current law requires a renewable portfolio of at least 15% by 2015. A bill before the Montana Legislature would repeal that requirement entirely. Two of the largest utilities in Montana have opposed the repeal of the bill, suggesting that the bill interferes with their business planning and current projects underway, as well as creating an unstable political climate in Montana.

Not all of these bills will pass, and those that do pass may be vetoed. But it is worth continuing to watch these developments to see whether this is a trend, whether more states will reconsider their renewable mandates, or whether this is a small bump in the road as more states continue to mandate that their utilities procure larger proportions of their electricity from renewable sources.