GP: RPS & cost cap

[Cornelius Suchy <c.suchy@consultants.mvv.de>]

It is encouraging to hear that states such as New
Hampshire embark on a RPS, a support mechanism compatible with a free
market system. That's why I wonder why one actually needs a price cap at
all. The market forces should take care of this. The only reason is that
you need to have a penalty for those utilities that do not comply. In
order to be effective, this penalty - in effect a price cap - should be
higher than the expected market price of the certificate. 1.5 US cents
per kWh is unlikely to be high enough. Utilities will then rather pay the
penalty than purchasing credits or investing into renewables
themselves.
Cornelius.

At 18:36 17.04.2002 -0400, Tom Gray wrote:
> [...]
> OPPOSE NICKLES
> What: The amendment reduces the cost cap in the RPS from 3 cents to
> 1.5
> cents. The cost cap at 3 cents ensures a portfolio of renewable
> energy
> sources will be used to meet the standard, instead of just the
> cheapest
> (in this case wind). Setting the cost cap below 3 cents would result
> in
> utilities purchasing credits rather than investing in generation of
> renewable resources, cutting potential gains from capital investment
> and
> job creation.
> Factoid:  Texas RPS has a credit of 5 cents per kilowatt-hours as
> does
> Massachusetts.
>
> ***The Nickles amendment is just another Kyl type attempt to weaken
> and/or make ineffective the Renewable Portfolio Standard. Oppose 
> the
> Nickles amendment and retain the current 3 cent/kWh cost cap and
> ensure
> jobs and energy diversity benefits of the RPS.