Push for Renewable Energy No Longer Driven Solely by Policy

Energy Partner Jerry Bloom authored the Daily Journal article “Push for Renewable Energy No Longer Driven Solely by Policy” published on June 8, 2016. The article discusses the growing trend in utility ownership of renewable energy projects and the need for change in the regulatory and legal landscape.

For decades, the utilities and municipalities were primarily exclusive purchasers of renewable energy under wholesale, long-term power purchase agreements based upon federal and state laws. In 1978, Congress passed the Public Utilities Regulatory Policies Act requiring utilities to purchase capacity and energy from two classes of qualifying facilities—cogenerators and small power producers. Decades later many states have passed renewable portfolio standards, which establish state programs requiring the utilities to purchase renewable energy.

Mr. Bloom explains that a new phenomenon emerged years ago, which was motivated by the public’s concern with climate change and sustainability. He points out that the first to act were residential customers who installed solar generating units on the roofs of their homes. More recently, national and international commercial and industrial (C&I) companies have adopted sustainability goals and a critical component of their strategy is the purchase of renewable energy.

“The importance of this development cannot be overstated,” Mr. Bloom says.

In some cases, C&I customers purchase renewable energy and the associated renewable energy credits (RECs) to meet regulatory mandates. In other cases, C&I companies are voluntarily seeking the purchase of renewable energy to reduce or neutralize their emissions footprint. Customers find that renewable energy costs are equal, if not less costly; allowing them to respond to the demands for green products and services. 

The article states that while most consumers prefer to remain customers of their servicing utility, many utilities do not provide customers with the option to purchase renewable energy. Therefore, C&I customers go directly to the developers of renewable energy projects and purchase energy and the associated RECs.

“Integration of renewable energy is no longer driven solely by policy and the adoption of laws and regulations. The new driver is consumer demand for green products and services and this will necessitate changes in the regulatory and legal landscape across many parts of the country,” he says.

Mr. Bloom also notes a developing trend in utility ownership of renewable energy projects and utilities seeking permission from their regulators to offer green products and services to their customers. Whether consumers obtain renewable energy products from private developers or directly from the servicing utilities, renewable energy will continue to grow as a significant resource in meeting our energy demands.