BY WHAT AUTHORITY CAN STATES FAVOR RENEWABLE
energy in a restructured electricity market?
Renewable resource funding marks a major point of contention in utility deregulation. Environmental groups fear that without some form of compulsion or subsidy, or both, renewable resources will not survive in an energy economy based on least direct consumer cost. However, utilities do not want to be saddled alone with the chore of carrying all renewables to market.
To satisfy the various constituencies, state regulators are mandating the collective maintenance of the so-called "stranded benefits" of renewable energy and demand-side management. The techniques the states are using vary widely - from encouragement to compulsion. But there are legally right, wrong, and highly suspect ways of fulfilling these policy directives.
Many states are plunging ahead to implement the quickest or most controllable option, without analyzing the legality of their initiatives in advance.
California, for example, has earmarked $540 million by legislative action for renewable energy projects. fn1 Legislation in Massachusetts would fund renewable energy development for tens of millions of dollars annually. The Wisconsin Public Service Commission has allocated $210 million annually for energy conservation, development of renewable resources, and support of low-income customer assistance. All of these initiatives would impose a systems benefit charge, a levy on each kilowatt-hour of retail electricity sales, to fund in-state renewable energy development, as an avowed purpose of the programs.