GP: RE: RPS & cost cap

["Tom Gray" <tomgray@igc.org>]

Sorry if the message was not clear--what is being considered is a NATIONAL RPS, and people in New Hampshire were being urged to contact their U.S. Senators.

 

The reason for the price cap is simply political.  Opponents of the RPS claim that it will bankrupt the American economy by forcing people to pay a few dollars more per month for electricity (just like a carbon tax, or stronger controls on air pollution, etc.).  The price cap provides a limit to how much suppliers must pay for renewable energy.

 

Tom

-----Original Message-----
From: Cornelius Suchy [mailto:c.suchy@consultants.mvv.de]
Sent: Thursday, April 18, 2002 6:25 AM
To: tomgray@igc.org; green-power@crest.org
Subject: RPS & cost cap

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.