Legislative Smart Gridlock:
Overall legislation is geared more towards a one-size fits all mentality in terms of alternative and renewable energy development. Does this need to be looked at on more of a regional basis?

This is the first time since 1978 that the U.S. has seriously looked at energy legislation. All of the solar and wind power that we see now came out of this legislation. Congressman Markey and Waxman are proposing 25% renewable energy standard (already diluted to 17%). Is it critical to get this passed initially or should we be waiting for a stronger bill?


Key Issues:
Even a 15% bill could potentially create a massive investment and economic shift in the U.S.

There is no free lunch. The cost of increasing the renewable energy portfolio to 25 % will be a 3-5% annual premium (see EIA study).

There are still substantial savings in fossil fuel projects versus renewable. It is critical to incentivize utilities to invest capital into renewable energy.

The U.S. needs legislation on the federal level to put money into smart grid and transmission. A prominent issue is connecting remote renewables to load, which occurs across state borders and requires significant heavy investment.

Should there be a new deal for energy? The administration is starting to receive backlash on spending.

Is there a working model of smart grid somewhere? Boulder, Colorado. There is a spectrum of smart grid: net metering, demand response and advanced real-time energy metering. There are a lot of up front costs but not necessarily enough immediate benefits.



State Level Issues:
In state legislation the “pain” from ignoring renewable energy legislation is not severe. Federal legislation has some “teeth”. Federal legislation increases the likelihood of meeting renewable goals.

It’s important to know how states are defining “renewable”. I.E. Pennsylvania’s legislation defines coal as renewable.

California had very aggressive renewable portfolio standards. Great time for renewable energy and bad time for states to come up with money for renewables.

There are some concerns federal legislation may infringe on states rights.


Who are the enemies? Losers are oil and coal companies. They are going to fight transmission issues because there power is going to get displaced by coal. Oil companies are fighting legislation to avoid loss in the price of oil. There is a big push back from energy companies because renewable energy is not consumptive. Once capital is built there are no resource costs to generate revenue.

Who are the friends? The solar energy and the wind industry. They are both weaker and not as well organized. Friends might be companies like genzymes, nike’s, googles, etc…


Cap & Trade Legislation
The cap and trade system might give away 85% of the permits. Is it too weak or is it more important to set a regulatory framework in place. The U.S. is currently in regulatory limbo. Companies aren’t investing because they don’t know where to invest. Copenhagen is crucial and it is important to have an comprehensive energy bill (and energy vision) going into Copenhagen.

There are market mechanisms for cap and trade that work, but the energy sector is built entirely through regulation. There needs to be a carbon price on the market but there needs to be regulatory intervention as well.