U.S. SENATE MAKES HISTORY BY PASSING 
RENEWABLES PORTFOLIO STANDARD

AWEA Predicts Continued Expansion of Wind Power 
Under New Law Requiring Greater Use of Renewable Energy

        The American Wind Energy Association (AWEA) applauded today's passage by the U.S. Senate of a federal renewable energy portfolio standard ("renewables portfolio standard," or RPS) and a full five-year extension of the wind energy production tax credit (PTC) as part of the broad energy bill, S. 517. The bill also would create a new investment tax credit for small wind systems used to power homes, farms, and small business. 

The RPS included in S. 517 would require that an additional 1% of the nation's electricity come from new renewable energy sources by 2005 and increase slowly each year thereafter, until renewable energy provides 10% of the national electricity supply by 2020. A credit trading system would be established so that utilities could comply with the renewables requirement in the most cost-effective manner. The PTC, which provides an incentive of 1.5 cents per kilowatt-hour (adjusted for inflation) for electricity generated during the first 10 years of operation of a new wind plant, would be extended until Dec. 31, 2006. The new investment tax credit for small wind systems (75 kilowatts and below) would cover 30% of system costs for both residential and business uses. This tax credit was championed by Sen. Dick Durbin (D-Ill.). 

"The Senate’s passage of an RPS signals a firm commitment to fully capitalize on America’s enormous renewable resources,” declared AWEA Executive Director Randall Swisher. “The Senate energy bill will help pave the way for increased development of renewables by requiring electricity suppliers to look seriously at adding these clean, domestic energy sources to their power mix. We believe that once they do, wind will prosper because it is one of the most cost-effective renewables. In fact, with continued federal leadership and industry development, we estimate that wind energy can provide as much as 6% of the nation’s electricity by 2020, or more than half of the renewable total required in the Senate-passed bill.” 

"Senate passage of an RPS marks a milestone in U.S. energy policy," commented AWEA Legislative Director Jaime Steve. "The federal government has been talking about renewable energy for 25 years, but this proposal, if enacted into law, would be the first concrete step toward making it happen. And the inclusion of a provision to extend the PTC makes this bill a real one-two punch for development of renewables: it will be extremely helpful in encouraging wind energy's continued rapid growth." 

Steve congratulated Senate Majority Leader Tom Daschle (D-S.D.) and Senators Jeff Bingaman (D-N.M.), and Harry Reid (D-Nev.) for their leadership in winning passage of the provision: "Sens. Daschle, Bingaman, and Reid have demonstrated outstanding leadership in sticking with the RPS concept and shepherding it through the legislative process. We salute them and the rest of the 58 Senators who consistently supported the RPS." Steve also thanked Sens. Chuck Grassley (R-Iowa), Byron Dorgan (D-N.D.), Kent Conrad (D-N.D.), Jim Jeffords (I-Vt.), Max Baucus (D-Mont.), and Gordon Smith (R-Ore.), for their strong support of the PTC.

"A federal RPS has huge economic development implications for rural America," Swisher said, "promising new jobs in many wind-rich states while bringing a ‘second crop’ to many landowners and new tax revenue to many local governments." A 100-megawatt (MW) wind plant (capable of supplying the electricity needs of 28,000 homes) will provide $5 million in payments to landowners and $12.5 million in wages over its 25-year lifetime.

Some $3 billion worth of wind power investments (about 3,000 megawatts, or enough to supply the needs of 850,000 homes) are being proposed or planned for the next several years in the U.S., according to AWEA estimates. There are now wind turbine installations in 26 states providing 4,261 MW of clean, renewable wind energy to consumers nationwide.

S. 517 now goes to a joint House-Senate conference committee where differences between it and the House-passed energy bill, H.R. 4, will be resolved. The House bill has no RPS provision, but does include a five-year PTC extension.

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