A Renewable Portfolio Standard (RPS) ensures that a minimum amount
of renewable energy is included in the portfolio of electricity
resources serving a state or country, and -- by increasing the required
amount over time -- the RPS can put the electricity industry on a path
toward increasing sustainability. Portfolio standards have been
primarily a result of state-based electric restructuring efforts but some regulated states enacted renewable energy mandates in the 1990's - most notably Minnesota, Wisconsin and Iowa. Those have evolved into state RPS policies over time.
None
of the exisiting RPS rules is the clear winner as the best or model
rule. Arizona's most recent iteration of an RPS has a special provision
that requires onsite generation to provide 30 percent of the energy
required under the RPS. Nevada's RPS has an interesting provision
designed to take advantage of their most available renewable resource -
the sun - we like that built-in local flavor aspect of an RPS. Some
states have substantial percentage goals of 20 percent or more - we
like those agressive strategies.
We feel that the
following conditions should be met when installing a Renewable
Portfolio Standard.
New Rules Project's RPS Criteria:
- A good RPS will lead to an absolute annual increase in renewable energy generating capacity.
- Over time a good RPS will lead to an increase of installed renewable energy capacity on a per capita basis.
- Qualifying
facilities under an RPS should NOT include waste-to-energy facilities
(incinerators) or high-head hydopower resources.
Please Note: We are not
listing information on all the RPS rules that have been enacted across
the country. Some of them are similar to each other and/or weaker than
those we have listed. Below you will find a representative sampling of
the most interesting of the bunch. For a complete listing of states
with RPS laws, we suggest this page at UCS or this page at DSIRE
The Arizona Corporate Commission (ACC) adopted an EnvironmentalPortfolio Standard in 2001 that required utilities to have 1.1 percentof sales from renewables by 2007. The program did not work. A new planwas announced in August 2005. The ACC’s new plan will require utilitiesto procure 15% of the state’s electricity from renewable resources by2025. The ACC voted to require that 30% of the EPS requirement be metby local onsite renewables installed by homes and businesses.
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On June 8, 2001, Nevada enacted the country’s most aggressive renewable
portfolio standard at the time. The law required that 15 percent of all
electricity generated be derived from new renewables by the year 2013.
Five percent of the RPS must be from solar energy projects. In June
2005, Nevada raised the requirements of the RPS to 20 percent of sales
by 2015. The bill also allows certain energy efficiency measures to
qualify for up to one-quarter of the total standard in any particular
year.
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In
April 2006, the New Jersey Board of Public Utilities (BPU) issued new
regulations that as a whole requires 22.5 percent renewable energy by
2021. Most interesting is a requirement for photovoltaics to meet 2.12
percent of the state's cosumption - representing about 1,500 MW by 2020.
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Connecticut
originally passed an RPS law in 1998 but it proved to be flawed. The
most recent changes to their RPS legislation was in 2007 and make Connecticut's one of the most agressive in the nation (as of January 2009). The new law requires
electricity providers to generate 27% of all retail electricity sales
from renewable energy by 2020.
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In September 2004, The New York State Public Service Commission (PSC)
adopted a renewable energy portfolio standard that requires 25 percent
of the state's electricity to be supplied from renewable energy sources
by 2013. The NY RPS will require about 3,700 megawatts (MW) of new
renewable fueled electricity projects to come on-line between 2006 and
2013. The NY RPS also requires a portion of the renewables to come from
customer-sited generation.
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In
early March 2004, New Mexico Governor Bill Richardson signed into law a
measure (SB 43) that requires investor-owned electric utilities to
produce or buy increasing amounts of renewable energy. Renewables must
make up 5 percent of the utilities' sales by 2006, and 10 percent by
the year 2011. The law leaves a tiny hole that would allow utilities to
ignore the new law through a provision for a PRC-established
"reasonable cost threshold" beyond which a utility would not be
required to add renewable energy to its energy supply portfolio.
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In July 2005, the Texas Legislature doubled their previous goal for the
amount of wind power, solar power and other forms of renewable energy
in the state's energy mix. The new portfolio standard calls for the
state to obtain 5,880 MW, or about five percent of the state's
electricity, from renewable energy by 2015. Of the total, 500 MW must
come from renewable energy sources other than wind energy.
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On September 12, 2002, a bill was enacted (SB 1078) requiring
California to generate 20 percent of its electricity from renewable
energy no later than 2017. The law requires sellers of electricity at
retail to increase their use of renewable energy by 1 percent per year.
In 2005, state regulators expressed a desire to accelerate the timeline
and meet the RPS by 2010. The Governor has endorsed this accelerated
schedule and has set a goal of achieving a 33 percent RPS by 2020 for
the state as a whole.
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In November 2001, voters in San Francisco cast their ballots in favor
of becoming a world leader in solar electricity. Seventy-three percent
of voters approved of Proposition B to allow San Francisco to issue
$100 million in revenue bonds to finance enough renewable energy to
supply about 25 percent of the government's needs. If fully implemented
San Francisco will become the largest single producer of solar energy
in the U.S.
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Iowa's 1983 Alternate Energy Production law required the state's
investor-owned utilities to purchase of electricity from renewable
energy projects. After years of stalling by the utilities, Iowa is now
becoming a leading state for wind energy development.
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The 2007 Minnesota legislature has adopted the strongest renewable energy standard (as of January 2009) that applies to all the state's
utilities - 25% renewables by 2025 (30% by 2020 for Xcel Energy) giving a total renewable requirement of
about 27.5% of electricity sales by 2025.
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