Pennylvania's Alternative Energy Portfolio Standard: Getting Pennsylvania to a Sustainable Energy Future

A renewable portfolio standard ("RPS") specifies a percentage of energy that must be provided by certain renewable energy sources. The Commonwealth followed a growing number of states that have established an RPS. Twenty-one states and the District of Columbia have established and RPS.

by Robert B. McKinstry

Pennsylvania's law, which establishes an "alternative energy portfolio standard" is unique in several respects. Like the other states, it has established an RPS that requires that suppliers and distributors of electricity provide a certain percentage of electricity generated with renewable sources such as solar, wind, geothermal, biomass and low impact hydroelectric. Pennsylvania's 8% standard for its RPS is ambitious and includes a minimum requirement for solar that is particularly ambitious. Pennsylvania is the first in the nation to include energy conservation in its alternative energy standard. Pennsylvania also recognized that use of waste and waste coal to generate energy can achieve muliple environmental goals. Finally, it recognized that meeting our energy needs will require more effiicient use of fossil fuels in the short run and use of traditional renewable resources, such as large scale hydroelectric, and includes those sources in its standard.

Pennsylvania integrated its RPS into its use of market-based mechanisms for supply of electric generation. It therefore explicitly authorized trading of renewable energy credits. This legally recognized trading regime will work with a voluntary regime already in place.

Regulations have now been promulgated for Pennsylvania's experiment. The 2006 Goddard Forum explored the legal, institutional, financial, and technical challenges that will be faced in implementing this program and examined next steps in bringing Pennsylvania and the nation to a sustainable energy future.

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Goddard Forum 2006