On Wednesday, July 28, EPSA president and CEO Todd Snitchler moderated a panel discussion on current federal clean energy standard (CES) proposals, featuring opening remarks by Sen. Tina Smith (D-MN) and hosted by OurEnergyPolicy. Panelists included Devin Hartman, director of Energy & Environmental Policy for the R Street Institute, Arne Olson, a senior partner at Energy and Environmental Economics, Inc., and Lindsey Walter, deputy director of the Climate and Energy Program at Third Way.
Watch a recording of the webinar here.
Throughout the hour-long virtual webinar, speakers covered the status of a CES in ongoing budget reconciliation discussions and other Congressional policy proposals, with perspectives on the policy’s benefits and drawbacks as well as how and whether it should be implemented.
Here are EPSA’s top takeaways from the event, plus recommendations for crafting an effective CES while ensuring reliable and least-cost solutions for America’s electric grid and consumers:
“A Pivotal Moment on Climate Action”
In opening remarks, Sen. Smith made clear that the U.S. is at a “pivotal moment on climate action,” highlighting the recent extreme weather events across the nation.
Sen. Smith defines a CES as setting a goal of reaching net zero in the power sector by a certain date, noting that this proposal builds in the “right kind of incentives” for more clean power to be brought on to the grid.
In closing, Sen. Smith focused on how a CES could serve as a “foundational building block” to achieve climate goals, coupled with energy efficiency incentives and transmission, among other proposals. With bipartisan support growing, she believes there is a path for a CES via the budget reconciliation process.
Snitchler shared that during this pivotal moment, EPSA member companies continue to reduce carbon emissions, and recognize the role competitive power suppliers play in mitigating climate change. Competitive power suppliers are committed to finding solutions that protect the environment and strengthen our grid – without burdening consumers.
The Success of Market-Based Approaches
“We’re committed to finding policies that harness the power of markets and competition, but deliver emissions reductions,” said Snitchler during introductory remarks.
Those policies include economy-wide carbon pricing or a well-designed CES. While a carbon price is preferred as the most effective solution, a well-designed CES could also approach the efficiency and cost-effectiveness of an economy-wide price on carbon, according to recent analysis – saving $2.8 billion annually compared to a Business as Usual (BAU) approach that includes current restrictive policies and subsidies.
What are the elements that comprise a “well-designed” CES? See EPSA’s checklist here.
Competitive electricity markets already serve as the model for an effective clean energy standard, producing billions in consumer savings annually and driving clean energy investment. These markets are a powerful foundation to encourage least-cost generation, integrate new technology and foster the innovation needed to meet future energy challenges. It’s imperative that policymakers recognize these facts and craft policies that build upon this successful model.
Looking to the Future
As different proposals for what a CES might look like continue to percolate, panelists shared thoughts on where we are – and where we’re going.
Third Way’s Walter noted the current “pricey patchwork” in place due to some states taking climate action in lieu of clear federal legislation. She joined EPSA’s call for an economy-wide solution and added that any CES must be technology-inclusive to ensure the grid decarbonizes and keeps firm, dispatchable resources online.
RSI’s Hartman noted that “If we’re serious about the clean energy transition in a results-oriented way,” competition must be part of any clean energy policy. He said it’s time “to start talking about how to reform the regulatory apparatus… and anything that ultimately infuses competition into the generation and transmission components of electric supply.
E3’s Olson said a CES is not the end-all, be-all of climate policy. Still, while it is not as efficient as an economy-wide price on carbon, he said a well-designed CES does possess strong qualities. “The question is – is it a good step that we can take now? Is it a no regrets, or least regrets step that we can take now? And I think the answer is yes. I think there’s no question that we need to scale up clean energy in a very dramatic way, quickly, and this will set us on a path to do that.”
As we confront the challenge of how to reduce carbon emissions while continuing to provide reliable and affordable electricity, we must develop and embrace practical solutions that unleash competition to deliver the best results. At EPSA, we will continue to weigh in on and facilitate thought-provoking discussions like this event with Our Energy Policy, and share competitive policies that will advance decarbonization goals – while maintaining Americans’ top energy priorities of affordability and reliability.
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