This document discusses transitioning the U.S. energy market to majority renewable generation. It argues that while existing renewable energy policies like renewable portfolio standards and federal tax incentives have increased renewable energy use, they are not sufficient to drive further significant growth. Renewable portfolio standards set weak renewable energy targets and have jurisdictional issues. Federal tax credits face political uncertainty and exclude some investors. The document proposes putting more responsibility on utilities to procure renewable energy through regulated standards, which could help overcome challenges and stabilize the renewable energy market to facilitate a majority renewable electrical system.

1. TRANSITIONING THE U.S. TO MAJORITY RENEWABLE GENERATION
BY MADELINE LEFTON
I. INTRODUCTION
The U.S. energy market is currently in a state of transition. Though the means to develop
more renewably sourced energy is the topic of much national debate,1
in the long-term, there is a
strong desire in the U.S. to lower carbon emissions and develop a healthy renewable energy
industry.2
To facilitate this transition, many local, state and national renewable energy policies
have been enacted.3
Though the enthusiasm to supply more of the power entering the national
grid from renewable sources is evident from these policies, the obstacles are formidable. The
array of renewable policies further complicate already unclear legal and economic energy market
dynamics, and perpetuate disorganization and a piecemeal approach to a problem that would be
served well by a more comprehensive plan.
The U.S. reached the milestone of supplying thirteen percent of its electricity from
renewable sources in 2011.4
A hodge-podge of renewable development incentives made this
possible. Most notably, state enacted renewable portfolio standards (RPSs) and federal tax
incentives have been instrumental in attaining this achievement.5
These policies have allowed
renewable energy developers to enter the competitive energy market by creating a guaranteed
1
See generally Jeffrey Logan, et al., NATURAL GAS AND THE TRANSFORMATION OF THE U.S. ENERGY SECTOR:
ELECTRICITY, JOINT INSTITUTE FOR STRATEGIC ENERGY ANALYSIS, (2012), available at
http://www.nrel.gov/docs/fy13osti/55538.pdf (discussing how the natural gas market and the widespread use of
hydraulic fracturing has substantially impacted the electricity market).
2
See Blair Swezy, et al., A PRELIMINARY EXAMINATION OF THE SUPPLY AND DEMAND BALANCE FOR RENEWABLE
ENERGY, NATIONAL RENEWABLE ENERGY LABORATORY (2007), available at
http://www.nrel.gov/docs/fy08osti/42266.pdf.
3
See DATABASE OF STATE INCENTIVES FOR RENEWABLES AND EFFICIENCY, http://www.dsireusa.org, (last visited
Mar. 20, 2013) [hereinafter DSIRE], and THE OBAMA ENERGY AGENDA (2012), available at
http://www.whitehouse.gov/energy/gasprices.
4
U.S. Energy Information Administration, Annual Energy Outlook 2013, available at
http://www.eia.gov/forecasts/aeo/er/early_elecgen.cfm.
5
U.S. Energy Information Administration, Today In Energy, February 3, 2012, available at
http://www.eia.gov/todayinenergy/detail.cfm?id=4850.
1

2. market for renewable power, and mitigating high up-front or long-term investment costs.6
However, despite their success, various logistical complications embedded within these
renewable policies stymie renewable energy growth. Furthermore, existing renewable energy
development policies are designed to incubate renewable energy development. They are not
designed to sustain a fully-formed majority renewable generation market.
To facilitate a longer term, more cohesive transition from carbon to non-carbon-based
energy sources, policymakers must map out a new strategy–one that facilitates full capitalization
of the renewable energy market. This article proposes that in light of jurisdictional
complications, generation logistics, and the current utility regulatory scheme, the onus of
securing more renewable power in an efficient, reliable, legal way, should be on utilities. This
article sets forth a utility regulatory scheme that allows for more uniformity in the procurement
of renewable energy. Obligating utilities to build or buy renewable energy, in conformity with
procurement requirements, will serve to overcome many of the unique challenges currently
impeding development of the renewable energy market. Ensuring more stability in the renewable
energy market will quell volatility that presently stunts market potential, ultimately yielding
more renewable power and a route to a majority renewably powered U.S. electrical system.
Because the energy market is so fiercely competitive, a critical step to developing
renewable power is simply allowing room in the market for renewables. RPSs have done just
that, by guaranteeing demand.
The U.S. has a rather fragmented approach to energy regulation as a result of the federal
and state jurisdictional overlay, profoundly impacting market operations. Generally, states have
the police power to regulate their own electricity systems, including generation, transmission and
distribution, as well as retail sales of power, so long as the electricity in question does not impact
6
Id.
2

3. interstate commerce.7
The federal government then affirmatively polices all electricity market
functions that cross state lines, thus wholesale sales of power and projects that impact the greater
national energy market are regulated federally.8
However, the federal government also can police
state energy policies if they “unjustifiably . . . discriminate against or burden the interstate flow
of articles of commerce.”9
The summation of these jurisdictional divisions adds up to the
impossibility of a national renewable energy plan, as well as a fierce political debate, forever
percolating, highlighting the tension between state and federal division of power. As a result, a
piecemeal approach in state plans has evolved, in an attempt to move forward on renewable
energy development, despite the regulatory prohibitions.10
Unfortunately, due to the unique
physical attributes of electricity, and the likelihood for a state energy market to have an impact
beyond its own borders, many renewable energy policies are unconstitutional.11
Up to now renewable energy portfolio standards, renewable energy credits, and
development tax credits have been effective drivers of renewable energy development, but as
they are currently designed and implemented, these incentives are not sustainable in the long
term.12
Section 45 of the Internal Revenue Code (IRC) provides an income tax credit for
electricity produced from qualified wind power, solar energy, small irrigation power, geothermal
energy, open-loop and closed-loop biomass production, municipal solid waste, hydropower
7
Federal Power Commission v. Florida Power & Light, 404 U.S. 453 (1972).
8
Id.
9
Oregon Waste Sys., Inc. v. Dep't of Envtl. Quality of State of Or., 511 U.S. 93, 98 (1994).
10
See DSIRE
11
See Steven Ferrey, Sustainable Energy, Environmental Policy, and States' Rights: Discerning the Energy Future
Through the Eye of the Dormant Commerce Clause, 12 N.Y.U. ENVTL. L.J. 507 (2004).
12
See Eric Lantz, and Elizabeth Doris, STATE CLEAN ENERGY PRACTICES: RENEWABLE ENERGY REBATES,
NATIONAL RENEWABLE ENERGY LABORATORY (2009), available at
http://www.nrel.gov/tech_deployment/state_local_activities/pdfs/45039.pdf, and RENEWABLE ENERGY INCENTIVES,
TAX POLICY CENTER, URBAN INSTITUTE AND BROOKINGS INSTITUTION (MAR. 8, 2013), available at
http://www.taxpolicycenter.org/taxtopics/conference_renewable_energy.cfm.
3

4. production, and marine and hydrokinetic renewable energy facilities that is sold by the producer
to an unrelated party. 13
Or, a producer may elect to utilize a 30 percent investment credit instead
of the production tax credit.14
Federal tax credits have provided an enticing opportunity to invest
in renewable energy production; however, the very nature of a tax credit leaves out a great many
potential investors if they lack tax liability.15
Additionally, though the U.S. has a long history of
subsidizing energy markets, there is the hope that renewables will become financially sound on
their own and not require the false security of tax credits to prosper.16
On the state level, many renewable energy portfolios have been adopted to develop a
local renewable energy market. However, their effectiveness is questionable. Many state RPS
policies are rife with jurisdictional issues that expose them to commerce clause and dormant
commerce clause challenges. Furthermore, “because RPS policies have not consistently required
accountability and states are not effectively complying with these self-imposed, mandatory
requirements, they appear to be more of a political tool used to provide a false sense of
accomplishment in the development and use of renewable energy.”17
Looking to utilities, and putting a greater onus on them to foster the renewable energy
market might be the best way to move into the next phase of bringing more renewable energy
into the grid. Utilities already have a quasi-public-private orientation.18
Utilities are accustomed
13
26 U.S.C.A. § 45 (2010).
14
26 U.S.C.A. § 48 (2010).
15
See John Farrell, FEDERAL SOLAR TAX CREDITS RULE OUT HALF OF AMERICANS, INSTITUTE FOR LOCAL SELF
RELIANCE (2011), available at http://www.ilsr.org/federal-solar-tax-credits-rule-out-half-americans/.
16
See eg., DIRECT FEDERAL FINANCIAL INTERVENTIONS AND SUBSIDIES IN ENERGY IN FISCAL YEAR 2010, US
ENERGY INFORMATION ADMINISTRATION (2011), available at
http://www.eia.gov/analysis/requests/subsidy/pdf/subsidy.pdf, and, Jigar Shah, Are Subsidies Holding Back U.S.
Solar Deployment?, CLEANTECHNICA (2012), http://cleantechnica.com/2012/10/04/are-subsidies-holding-back-u-s-
solar-deployment-cleantechnica-exclusive-from-jigar-shah/.
17
Melanie Grant, Where Are They Now? A Look at the Effectiveness of Rps Policies, 2011 B.Y.U. L. REV. 849, 850
(2011)
18
Arkansas Elec. Co-op. Corp. v. Arkansas Pub. Serv. Comm'n, 461 U.S. 375 (1983).
4

5. to government-imposed demands.19
Also, utilities can plan comprehensively to set up a long-
term foundation for the renewable energy market to rely on. Utilities could revise their
operations by setting procurement standards, to bring more renewables online, in a
comprehensive, organized way.20
Section II of this article explains why existing renewable energy policies will not
substantially bring more renewable energy onto the grid, and may in fact inhibit more growth in
the renewable energy market. Section III explains why utilities, specifically in bundled or
regulated markets should play a bigger role in bringing renewable energy onto the grid. Section
VI details how utilities should fulfill the obligation to bring more renewable energy onto the grid.
Section V concludes by positing that the introduction of more renewable energy to the grid will
require a new regulatory scheme that mandates procurement of renewable energy, yet allows for
natural market conditions to determine pricing.
II. THE INADEQUACIES OF EXISTING RENEWABLE ENERGY POLICIES
Existing renewable energy development policies in the U.S. have laid a foundation for
the renewable energy market to gain traction but fall far short of stimulating the true potential of
the renewable energy market. For example, clean energy policies under the Obama
Administration aim to invest in developing new green technologies, rather than deploying
existing renewables to rapidly increase the amount of renewable electricity on the grid.21
On the
19
Fed. Power Comm'n v. Hope Natural Gas Co., 320 U.S. 591 (1944).
20
See, e.g., 3799 PUR Util. Reg. News 1.
21
The principal green energy program under the Obama Administration is $34 .5 billion in loan guarantees under
Section 1703 of Title XVII of the Energy Policy Act of 2005,which authorizes the U.S. Department of Energy to
5

6. state level, renewable policies are still in their infancy. For example, California is heralded for its
relatively aggressive RPS, which targets a goal of supplying thirty-three percent of California’s
total electricity from renewables by 2020, and stops there.22
Encouragingly, California is on
target to meet its objective,23
but existing renewable energy policies must be updated in order for
the renewable energy market to significantly mature beyond currently outlined goals.
Renewable portfolio standards are a widely-deployed renewable energy development
policy in the U.S.24
. RPSs play an instrumental in the growing supply of renewable power.25
However, despite their success, RPSs suffer from some design flaws. RPSs have not dismantled
the high energy market barriers to allow for smaller-scale renewable generation projects, as they
were expected to. A major flaw with RPSs is their inclination for federal and state jurisdictional
entanglements, frequently rendering portions of RPSs as unconstitutional. The other major
renewable development policy is a federal tax credit for investment in or production of
renewable energy. Like RPSs the federal tax credit incentives are structured to benefit larger
investment schemes, leaving out smaller investors. Additionally, political waffling substantially
undermines the potency of federal tax credits. Repeatedly, the federal tax credits have come
close to expiring or have actually expired. Despite being renewed, the political unreliability of
the policy has resulted in an incredibly disruptive boom and bust cycle, severely destabilizing
renewable energy market growth.
support “innovativeclean energy technologiesthat aretypically unableto obtain conventional private financing dueto
high technology risks.” See 10C .F.R ..§609 .2 (defining an “eligible project” as a project “that employs a
New or Significantly Improved Technology that is not a Commercial Technology . . .”).
22
Dsire, California, http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=CA25R&re=1&ee=0.
23
California Public Utilities Commission, Renewables Portfolio Standard Quarterly Report, 1st
and 2nd
Quarter 1012
at 4, available at http://www.cpuc.ca.gov/NR/rdonlyres/2060A18B-CB42-4B4B-A426-
E3BDC01BDCA2/0/2012_Q1Q2_RPSReport.pdf.
24
North Carolina Solar Center and Interstate Renewable Energy Council (2012) “Summary Maps.” Database of
State Incentives for Renewables & Efficiency (DSIRE).
25
Union of Concerned Scientists (2009) “Renewable Electricity Standards at Work in the States.”
6

7. Finally, grid balancing is a practical problem that both policies fail to address and tend to
exacerbate. RPSs and federal tax credits both promote distributed generation, yet do not outline
how utilities are to account for the sudden introduction of inconsistent power onto the grid, even
though utilities are still accountable for preventing blackouts and maintaining grid reliability.
The following section details why these policies are problematic to the point of restricting
growth in the renewable energy market.
a. Existing Mandates Too Weak to Drive More Growth: If You Mandate It, It Will
Be Built.
RPSs are a popular legislative policy, employed by individual states to outline renewable
energy goals, such as how much renewable energy capacity and from which sources a state
wishes to develop or promote.26
Generally, RPSs set a target percentage of renewable energy
capacity in a state energy market, to be comprised of a designated mix of renewable generation
sources, and achieved by a certain date, as well other compliance requirements. RPSs have
proven to be an effective way for states to develop a renewable energy market within their
borders.27
The strength of RPSs lies in their flexibility. RPSs allow states’ to tailor renewable
energy development to the specific goals of their electorate and to account for regional nuances.
RPSs can empasize locally available resources, like sun in the Southwest or wind in the
Midwest.28
Because of their ability to reflect the unique renewable goals of a state, to date, thirty-
26
MOST STATES HAVE RENEWABLE PORTFOLIO STANDARDS, US ENERGY INFORMATION ADMINISTRATION (2012),
available at http://www.eia.gov/todayinenergy/detail.cfm?id=4850.
27
Gireesh Shrimali, et. al., HAVE STATE RENEWABLE PORTFOLIO STANDARDS REALLY WORKED? SYNTHESIZING
PAST POLICY ASSESSMENTS TO BUILD AN INTEGRATED ECONOMETRIC ANALYSIS OF RPS EFFECTIVENESS IN THE U.S.
(2012) available at HTTP://WWW.USAEE.ORG/USAEE2012/SUBMISSIONS/ONLINEPROCEEDINGS/SHRIMALI%20ONLINE
%20PROCEEDINGS%20PAPER.PDF.
28
See Melissa Powers, Small is (Still) Beautiful: Designing U.S. Polices to Increase Localized Renewable Energy
Production, 30 WISC. INT’L L.J. 101, (2012) [hereinafter Powers] and see, DSIRE.
7

8. seven states have enacted some form of RPS.29
The adoption of RPSs has played an important role in increasing renewable energy
capacity in the US. “Regional growth in renewable electricity generation is based largely on two
factors: availability of renewable energy resources and the existence of State RPS programs that
require the use of renewable generation.”30
Since the year 2000, renewable energy capacity has
increased in the U.S. from under five percent31
to over twelve percent in 2011. In states that have
RPSs, the market is estimated to exceed 115 gigawatts of renewable generation by 2025.32
This
number is significant, but, considering that the U.S. generates over four million gigawatts a
year,33
ample room for growth remains in the renewable energy market.34
As effective as state RPSs have been up to now in cultivating growth in renewable energy
markets, if they are not reassessed to implement new goals, their impact stands to greatly
diminish. Many formerly progressive RPS goals have already been, or are rapidly projected to be
met.35
Iowa was the first state to enact an RPS, in 1984, calling for 105 megawatts, or about two
percent of its energy capacity to be generated by renewable sources.36
Since it was enacted,
Iowa’s RPS benchmark has been surpassed many times over. Two other states, Maine and Texas
have achieved their RPS goals.37
Tellingly, twenty-four states are modifying their RPSs, many to
29
See, DSIRE, (follow “RPS Data Spreadsheet” under Dec. 2010)
30
ANNUAL ENERGY OUTLOOK, US ENERGY INFORMATION ADMINISTRATION (2012), available at
http://www.eia.gov/forecasts/aeo/MT_renewable.cfm#renewable.
31
2009 RENEWABLE ENERGY DATA BOOK, US DEPT. OF ENERGY, available at
http://www1.eere.energy.gov/maps_data/pdfs/eere_databook.pdf, and RENEWABLE ENERGY, INSTITUTE FOR
ENERGY RESEARCH, available at http://www.instituteforenergyresearch.org/energy-overview/renewable-
energy/#_edn2.
32
Id.
33
ELECTRICITY IN THE UNITED STATES, US ENERGY INFORMATION ADMINISTRATION, available at
http://www.eia.gov/energyexplained/index.cfm?page=electricity_in_the_united_states.
34
http://www.instituteforenergyresearch.org/energy-overview/renewable-energy/#_edn2.
35
Bill Opalka, The State of Renewable Standards, ENERGYBIZ, available at
http://www.energybiz.com/magazine/article/243447/state-renewables-standards.
36
DSIRE at Iowa http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=IA01R
37
DSIRE.
8

9. increase overall capacity targets,38
indicating that the demands made in RPSs will be met. Thus,
where RPSs goals are meak, there is a profoundly missed opportunity to encourage renewable
energy development.
Other criticisms of RPSs are that they contribute to imbalance in the national market, and
their suspect correlation to the actual deployment of renewable energy. Because RPS designs
vary so widely between states, there is a fair degree of discord and incompatibility between the
various policies.39
“State RPS programs share the common goal of encouraging renewable
energy supply, but design variations among states are so stark that there is even some debate
over what exactly constitutes an RPS, and whether certain states qualify as having one.”40
The
resulting variation leads to substantially less than ideal market conditions. For example, “REC
prices have been highly variable across states.”41
As state RPSs grow stale, their incentives will fail to harness the full potential that the
renewable market can bear, and potentially stand to inhibit growth.42
Thus, states would do well
to streamline their RPSs and simply implement aggressive general capacity goals to eliminate
perceived market dischord, and continue spurring renewable market growth. Though RPSs are
only part of the current mix of renewable energy development incentives, considering the rapid
increase of RPS induced growth, neglecting to update RPS standards will likely result in
momentum loss, and stagnation in the renewable market.43
38
Id.
39
Ryan Wiser and Galen Barbose, Renewable Portfolio Standards in the United States, LAWRENCE BERKELEY
NATIONAL LABORATORY (April 2008), available at http://escholarship.org/uc/item/1r6047xb#page-1.
40
Id.
41
Id.
42
Id.
43
ANNUAL ENERGY OUTLOOK, US ENERGY INFORMATION ADMINISTRATION (2012), available at
http://www.eia.gov/forecasts/aeo/MT_renewable.cfm#renewable.
9

10. b. Market Participant Diversity Is A Distracting Goal: Problems with Net-metering,
Feed-in-Tariffs and Federal Tax Credits
A host of development incentive policies are often enacted to achieve state renewable
energy goals, in an effort to not only increase electrical capacity, but also diversity of market
participants.44
Most states have enacted multiple incentive policies to entice newcomers to
develop renewable projects,45
due to policymaker concern over market dominance and high
market entry barriers.46
Despite the various financial incentives that have been deployed, such as
feed-in-tariffs and net-metering, potential market participants still find themselves prohibited
from entering the renewable energy market by insufficient access to capital.47
Unhelpfully, many
renewable energy development incentives fail to address this aspect of the problem. Potential
suppliers of renewable energy are faced with high initial investment costs, but popular renewable
development incentives employ long-term amortization, and frequently cap investment
recovery.48
Thus, potential market participants are limited to those who have access to funding
upfront, and can stand to weather a delayed return on their investment.49
Pursuing the goal of
diverse market participants has resulted in policies running up against unconstitutionality, and a
harrowing outlook for the traditional utility in their responsibility to maintain grid balance.50
i. Net-metering
44
Carolyn Fischer and Louis Preonas, COMBINING POLICIES FOR RENEWABLE ENERGY: IS THE WHOLE LESS THAN
THE SUM OF ITS PARTS? (2010), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1569634.
45
DSIRE.
46
See David Moskovitz, RENEWABLE ENERGY: BARRIERS AND OPPORTUNITIES, WALLS AND BRIDGES, WORLD
RESOURCES INSTITUTE, July 1992,
47
Thomas Lord, Are Renewables Elitist?, ENERGYPULSE, (March 30, 2013)
http://www.energypulse.net/centers/article/article_display.cfm?a_id=146.
48
Barriers to Renewable Energy Technologies, UNION OF CONCERNED SCIENTISTS, 1999,
http://www.ucsusa.org/clean_energy/smart-energy-solutions/increase-renewables/barriers-to-renewable-
energy.html#2.
49
Id.
50
Steven Ferrey, Nothing but Net: Renewable Energy and the Environment, Midamerican Legal Fictions, and
Supremacy Doctrine, 14 DUKE ENVTL. L. & POL’Y F. 1 (2003). [hereinafter Nothing but Net].
10

11. One policy commonly employed to entice smaller, distributed market participants is net-
metering.51
Net-metering is a popular development policy that allows utility customers to be
credited the amount of any electricity they put into the grid.52
Ideal net-metering participants are
homeowners who can afford the upfront cost of installing some sort of small renewable
generation device such as a wind turbine or solar panels.53
Net-metering program implementation
varies depending on the state.54
But, because the net-metering terms are preset, a customer-
generator cannot negotiate the terms of their investment, essentially limiting the program to those
who are not participating for financial gain. The dilettante customer-generator dynamic is even
more apparent since frequently net sales are capped or even barred entirely.55
ii. Feed-in-Tariffs
Feed-in-tariffs (FITs) are the most popular policy used to facilitate renewable energy
market participation, in the world.56
FITs are better suited than net-metering as a tool to finance
larger-scale projects, especially projects that are built with the intent to yield a commercial
profit.57
The key to the effectiveness of FITs in driving renewable energy development are their
relative stability and their infusion of some certainty to an investment scheme.58
The goal of FITs
is to increase the likelihood that a renewable project will ultimately become profitable.59
The
stability of FITs is a bonus that allows potential investors to more accurately calculate what costs
to expect before a project is underway. This enables investors to anticipate a time frame to
51
Nothing but Net.
52
Nothing but Net.
53
Nothing but Net.
54
Id.
55
DSIRE, (CA, and NM programs), (California’s net metering program is considered generous in permitting up to a
5% recovery/profit from the utility for net-sales to the grid.)
56
A POLICYMAKER’S GUIDE TO FEED-IN TARIFF DESIGN, NATIONAL RENEWABLE ENERGY LABORATORY (July
2010) available at http://www.nrel.gov/docs/fy10osti/44849.pdf. [hereinafter, NREL Guide]
57
Id.
58
Id.
59
Id.
11

12. expect a return on the investment.60
Despite the suitability of FITs to investor needs, there are some very limiting drawbacks
as well. Like net-metering, FITs increase the appeal of investing in renewable energy
developments only to a narrow, self-selecting group.61
“It is generally assumed that the
guaranteed terms offered by FIT policies will help developers and investors overcome the high
up-front costs by financing a larger portion of the project with debt financing. However, FIT
policies do little to address up-front costs directly.”62
Since potential investors are left to secure
up-front costs without aid, this limits participation to much larger investors with access to
capital.63
Thus, adjusting FITs to be more enticing will not capture more investors, but will only
sweeten the deal for current participants.64
Beyond the limited appeal of the investment scheme, a very destabilizing aspect of FITs
is that their constitutionality is highly suspect.65
By design, the rate of return set by a FIT is
supposed to guarantee competitive market rates for electricity produced by renewable sources.66
These guaranteed rates of return “should probably exceed wholesale electricity prices [for] the
FIT [to] successfully promote renewable electricity generation. Since FERC has exclusive
authority over wholesale prices, FITs would seem to directly interfere with federal authority and
thus violate the Supremacy Clause.”67
This jurisdictional uncertainty has tainted the viability of
FITs, resulting in FERC declaring that California’s FIT was preempted by PURPA and in light
60
Id.
61
Toby Couture and Karlynn Cory, STATE CLEAN ENERGY POLICIES ANALYSIS (SCEPA) PROJECT: AN ANALYSIS
OF RENEWABLE ENERGY FEED-IN TARIFFS IN THE UNITED STATES, NATIONAL RENEWABLE ENERGY LABORATORY
at 1 (2009), available at
http://www.nrel.gov/tech_deployment/state_local_activities/pdfs/tap_webinar_20091028_45551.pdf.
62
Id. at 4.
63
Id.
64
Id.
65
NREL Guide.
66
Id.
67
Id.
12

13. of federal supremacy over wholesale sales of electricity.68
iii. Federal Tax Credits
On the federal level, promoting renewable energy has been achieved through production
tax credits (PTC) and investment tax credits (ITC).69
Adopted in 1992, the PTC is a federal
attempt to incentivize investments in renewable energy. PTCs are awarded to qualifying
producers of renewable energy, but if the producer lacks tax liability, they can sell the PTC to a
third party.70
The PTC is designed to encourage investment in renewable projects by stabilizing
their probability of successful, long-term operation, buffering sales of renewable energy from
potentially ruinous market fluctuations.71
Conversely, the ITC, a newer federal program, is designed to ease the burden of initial
start-up costs for renewable development.72
ITCs ultimately allow for recovery of up to thirty
percent of the eligible costs of a renewable energy property placed into service.73
Unlike the
PTC, “the sale of electricity is not required to realize the ITC. Furthermore, the time commitment
to the project need only be five years to capture the full credit.”74
Investors who utilize the ITC
“are not exposed to the risks of decreased demand or production complications,” minimizing
potentially ruinous impediments for a young renewable development.75
The structure of the PTC and ITC sufficiently incentivize investing in renewable
development, however, the political climate surrounding the tax credits is toxic. The first
68
Id. and, In re: California Public Utilities Comm’n, Order on Petitions for Declaratory Order, No. EL10-64-00, 132
FERC ¶ 61,047 (July 15, 2010).
69
Erin Dewey, Sundown And You Better Take Care: Why Sunset Provisions Harm The Renewable Energy Industry
And Violate Tax Principles, 52 B.C. L. REV. 1105 (2011) [hereinafter Dewey].
70
Id.
71
Id.
72
Id.
73
Id.
74
Id.
75
Id.
13

14. political problem surrounding the tax credits is their impermanence. Despite the effectiveness of
the PTC and ITC programs, and how necessary they are to entice investors, they are temporary
programs, subject to sunsetting.76
Sunsetting provisions are expiration dates on laws, meaning a
law must be reevaluated and affirmatively renewed by Congress to persist.77
Some argue that
sunset provisions are a helpful tool to promote responsible legislation by reinforcing political
accountability.78
It is thought that sunset provisions force legislators to evaluate the actual cost of
enacting legislation, thus promoting circumspection.79
However, critics of the provisions argue
that they serve to reduce political accountability by allowing legislators to underestimate revenue
needs.80
Also, it is argued that the provisions reduce the reliability of revenue projections by
allowing legislators to look at the laws in a more piecemeal context.81
Lastly, it is argued that
sunset provisions encourage congressional misconduct by creating a new lobbying opportunity
each time a law is reviewed.82
The PTC and ITC are politically divisive and subject to sunsetting because they represent
the very core of what some consider violations of free-market principles and all that is
‘unAmerican.’83
“Opponents of [a federal renewable policy] have called it everything from “a
new energy tax” to “a huge wealth transfer.”84
Subsidizing renewable development strikes
opponents as something akin to socialism.85
76
Id.
77
Id.
78
Id.
79
Id.
80
Id.
81
Id.
82
Id.
83
The Effects of Federal Renewable Portfolio Standard Legislation on the U.S. Economy, AMERICAN TRADITION
INSITUTION (January 28, 2011), available at http://www.atinstitute.org/the-effects-of-federal-renewable-
portfoliostandard-legislation-on-the-u-s-economy/, and Pelosi’s Big Bad Energy Idea, THE FOUNDRY (March 5,
2009), available at http://blog.heritage.org/2009/03/05/pelosi’s-big-bad-energy-idea/.
84
Lincoln L. Davies, Power Forward: The Argument for a National RPS, 42 CONN. L. REV. 1339 (2010).
85
Jim Rossi, The Shaky Political Economy Foundation of A National Renewable Electricity Requirement, 2011 U.
14

15. Manipulation of the PTC and ITC programs undermines the predictability of cost
calculations that investors rely on.86
However, this manipulation is only secondary to greater
problem that results from the sunset provisions. Each time approving an extension of the PTC
and ITC programs is up for a vote, the political climate is such that they are treated like political
footballs, with the likelihood of renewal remaining elusive up to the last hour.87
“Uncertainty
over [tax credit] continuation still exists because each renewal in Congress has introduced
political posturing and debate.”88
The fallout of the uncertainty over tax credits is that investors
lose the very reliability and sense of security that the credits are intended to provide. 89
When
extensions have been approved, the extensions have only been granted for relatively short
periods of time, often one to two years.90
The cause for concern that the tax credits may not be
renewed is real: in 2000, 2002, and 2004, Congress failed to extend the PTC, legitimizing the
uncertainty and severely undermining the reasonableness of investors relying on them.91
“Those
in the renewable energy industry agree that sunsetting of the PTC has impacted the industry and
that a permanent PTC would result in more long-term investment in renewable energy.”92
As a result of the mixed signals from Congress, the renewable industry has responded by
entering a boom-bust cycle, engaging in periods of frenzied development, followed by radio
silence. “Lapses in the PTC then cause a dramatic slow down in the implementation of planned
wind projects. When the PTC is restored, the wind power industry takes time to regain its
Ill. L. Rev. 361 (2011) (argues that a national renewable portfolio standard (RPS) for electric power is not likely to
ADVANCE its purported goals, nor is it likely to be adopted by Congress in its present proposed form).
86
Dewey.
87
Id. and Wind Credit with Bipartisan Backing Gets Lost in Election Year Fray, GREENWIRE (July 3, 2012),
available at http://www.eenews.net/public/Greenwire/2012/07/03/1 [herinafter Election Year Fray].
88
Id.
89
Dewey.
90
Dewey.
91
Phillip Brown, U.S. RENEWABLE ELECTRICITY:HOW DOES THE PRODUCTION TAX CREDIT (PTC) IMPACT WIND
MARKETS? congressional research service (2012), available at http://www.fas.org/sgp/crs/misc/R42576.pdf.
92
Id.
15

16. footing, and then experiences strong growth until the tax credits expire. And so on.”93
Each time
the tax credits are up for renewal, investment in renewable projects comes to a screeching halt.94
“Staggered renewals have caused investors to rush to complete projects before the PTC
expiration, leading to a boom-and-bust investment cycle, particularly since 1999, whereby the
PTC was renewed only on a 1-3 year basis and was repeatedly allowed to expire.”95
These short-
term extensions tend to result in short-term development, as project developers and investors are
under more pressure to capture the value of tax credit incentives in a relatively limited window
of time.96
In sum, various development incentive policies ultimately are having a ruinous effect on
the fledgling renewable industry; the boom-and-bust cycle resulting from political volatility
undermines steady growth, and FITs have constitutional problems. And, these programs as well
as net-metering aim to diversify market participants, but ultimately fail to do so. Furthermore, all
of these policies are intended to encourage distributed generation which as the next section will
explore, has the potential to undermine grid stability and dismantle the utility system as we know
it.
4. Utilities Left Holding the Bag: the problem of grid balancing in a DG era
One of the many goals that promoting renewably sourced generation will accomplish is
the opportunity to transition from a predominantly centralized generation system to a
93
Union of Concerned Scientists, Renewable Energy Tax Credit Extended Again, but Risk of Boom-Bust Cycle in
Wind Industry Continues (Feb. 14, 2007)
94
Dewey.
95
Id.
96
Phillip Brown, U.S. RENEWABLE ELECTRICITY:HOW DOES THE PRODUCTION TAX CREDIT (PTC) IMPACT WIND
MARKETS? CONGRESSIONAL RESEARCH SERVICE (2012), at 6, available at
http://www.fas.org/sgp/crs/misc/R42576.pdf.
16

17. decentralized or distributed generation system.97
As opposed to generation sources such as coal
plants or nuclear power plants, capable of providing energy to entire cities, distributed generation
is the principle of smaller, more discrete generation sources.98
Many generation sources can be
considered distributed generation, but a unifying principle is that it generally occurs outside of a
“centralized generation facility,” and is “built outside the distribution network on the
transmission grid.”99
Common distributed generation “technologies include combined heat and
power (CHP), small wind installations, small solar plants, fuel cells, and other forms of
decentralized power sources that either generate electricity or displace fossil fuel generation.”100
Distributed generation is alluring for a variety of reasons. Relying on a distributed
generation system might greatly improve the ability of the US electricity system to respond to
disruptions, big and small, decreasing power outages from natural disasters, or events like
terrorist attacks.101
Another benefit of distributed generation is the potential for reduced
environmental impacts.102
“By their very nature, distributed generation sources can operate in a
number of different landscapes and thus place less pressure on specific areas or ecosystems.”103
Minimal or relatively minimal environmental impacts of distributed renewable energy projects
are a key factor in boosting their appeal, compared to generation sources such as a coal plants.104
97
THE POTENTIAL BENEFITS OF DISTRIBUTED GENERATION AND RATE-RELATED ISSUES THAT MAY IMPEDE THEIR
EXPANSION, US DEPT OF ENERGY (February 2007), available at http://www.ferc.gov/legal/fed-sta/exp-study.pdf.
98
Dennis L. Arfmann, Tiffany Joye, Eric Lashner, The Regulatory Future of Clean, Reliable Energy: Increasing
Distributed Generation, 40 COLO. LAW 10, at 31. [hereinafter Arfman]
99
Id.
100
Id.
101
Powers, and THE POTENTIAL BENEFITS OF DISTRIBUTED GENERATION AND RATE-RELATED ISSUES THAT MAY
IMPEDE THEIR EXPANSION, US DEPT OF ENERGY AT 7-1 (February 2007), available at
http://www.ferc.gov/legal/fed-sta/exp-study.pdf.
102
Powers.
103
Id.
104
Id.
17

18. “Additionally, the smaller size and design of distributed generation and the potential to locate
distributed generation within urban areas typically result in less opposition from neighbors and
others concerned about aesthetic impacts.”105
Despite the many real benefits of decentralized generation, there remains a major
challenge in implementing such a system. Functionally, a predominantly distributed generation
system would require an entirely new regulatory approach to grid balancing, and a major
overhaul of existing grid infrastructure to incorporate ‘smart-grid’ technology.106
The problem
with those two prospects are that the technology that is required to implement such a transition is
not fully developed, such a transition would be incredibly costly, and political support is for such
a task is inconsistent, if not downright hostile.107
Though a smart-grid, and an accompanying
regulatory scheme are likely to happen in the future,108
pushing the system to change before the
renewable market is mature enough to warrant the transition is a troubling prospect that will
likely cause more problems than necessary.
Another problem with a decentralized generation system stems from the physics of
balancing the electrical grid. The electrical grid must consistently maintain certain flows of
electricity. Too much or too little electricity in the system will result in power outages.109
Because the technology to efficiently store electricity in large quantities does not yet exist,
balancing the grid requires minute by minute attention.110
Since investor-owned utilities are
105
Id.
106
See, Smart Grid, US DEPT OF ENERGY, available at http://energy.gov/oe/technology-development/smart-grid.
[herinafter SmartGrid]
107
Id, and Arfman, and ESTIMATING THE COSTS AND BENEFITS OF THE SMART GRID, ELECTRIC POWER RESEARCH
INSTITUTE, at 1-4 (2011), available at http://ipu.msu.edu/programs/MIGrid2011/presentations/pdfs/Reference
%20Material%20-%20Estimating%20the%20Costs%20and%20Benefits%20of%20the%20Smart%20Grid.pdf.
108
SmartGrid.
109
Electricty 101, US DEPT OF ENERGY, available at http://energy.gov/oe/information-center/educational-
resources/electricity-101#sys3.
110
Id.
18

19. responsible for almost eighty percent of transmission in the US, the task of balancing the grid
primarily falls to them.111
Grid balancing is already difficult, requiring constant care. If the US
transitions to a distributed generation system, even with smart grid technology, regulating the
flow of electricity would become incredibly unwieldy. Keeping track of each relatively tiny
source of energy, from say an individual house, has the potential to wreak havoc on transmission
management attempts, and utilities would be left scrambling to sort it out.
Adding insult to injury, in addition to regulating much of the grid, utilities also must buy
and distribute the power of their distributed generation competitors.
Section 210 of PURPA provided a legal framework for … [qualified facilities] to
interconnect to the transmission system and sell electricity to a regulated utility.
PURPA mandated that local utilities purchase excess power generated by the QFs
at the utility's avoided cost rate. This reform created largely unregulated sources
of electricity to compete with existing regulated utilities. Congress passed the
Energy Policy Act of 2005 (EPAct) and tightened certain restrictions of PURPA.
Under the EPAct, a public utility is no longer obligated to enter into a new
contract with or purchase power from a QF that has nondiscriminatory access to
certain types of developed markets112
Thus, not only must utilities care take for grid balancing, but they are also obligated to
buy electricity from independent power producers, who are essentially their competitors.
Up to now, independent power producers have supply about twenty-five percent of the
electricity on the grid,113
but if distributed generation becomes the norm, utilities face an
incredible burden to maintain grid balance.
All in all, if the US is going to transition to a predominantly renewably sourced energy
system, the current renewable energy incentives and grid balancing polices cannot facilitate that
111
Id.
112
Arfmann at 31, 34.
113
Electricty 101, US DEPT OF ENERGY, available at http://energy.gov/oe/information-center/educational-
resources/electricity-101#sys3.
19

20. change. RPSs work. Across the US, RPSs are close to compliance, or are on track to be so in the
near future. But RPSs not aggressive enough to get more renewable energy on the grid. They
also need to be updated to minimize the discordance between various state RPSs, and eliminate
unconstitutional tendencies, both of which serve to undermine energy market stability. Federal
incentives are also not the key to getting more renewables on the grid as they are so volatile
politically that they too wreak havoc on market stability. In the end, the utilities have been left to
pick up the pieces. For a real renewable energy revolution, a new policy must address these
concerns.
III. WHY UTILITIES SHOULD BE A BIGGER PART OF THE PICTURE: NO NEED TO
REINVENT THE WHEEL
The previous section detailed some of the major deficiencies in existing renewable energy
development policies, thus why they cannot be relied on to facilitate a major transition to
renewably sourced generation in the US. The following section explains why utilities need to
play a bigger role in the regulatory scheme to transition more renewable energy onto the grid.
Transitioning more renewable energy onto the grid will be significantly easier if existing
infrastructure is effectively utilized. Utilities already dominate the electricity-generation,
-transmission, and -distribution markets. Simply augmenting the physical and regulatory
frameworks that exist is the most efficient way to integrate more renewable energy onto the grid
in the fastest amount of time.
a. Mechanics – physical infrastructure is there – use the path of least resistance
The traditional, regulated utility is responsible for generation, transmission and distribution in the
20

21. US.114
Investor owned utilities (IOUs) are the single largest caretaker for these services,
responsible for eighty percent of transmission and supplying fifty percent of US generation.115
The IOU system is so entrenched that it serves approximately seventy-five percent of the US’s
energy needs.116
The costs associated with transmission in the US, which predominantly fall to
IOUs, are enormous. The US electrical grid consists of over 200,000 miles of high voltage
transmission lines.117
The exact values of the transmission system are variable, relative to
location, above ground or underground lines, high voltage capacity, and so on, however, capital
expenditures in the transmission market were valued at $128.9 billion in 2011 alone.118
In terms
of per unit costs, “the median cost of transmission” from a sample of potential wind generation
projects was estimated at “$300/kW, roughly 15% of the cost of building a wind project.”119
Another capital-intensive component of utility infrastructure is distribution services.
Distribution services are the meters, power lines, substations, and pole mounted transformers that
deliver electricity to consumers. “Distribution costs range significantly between utilities and
between locations within utilities.”120
Comparing four utilities, “average marginal distribution
capacity costs (MDCC) range from $74 to $556 per kW, and individual planning area marginal
114
THE ELECTRIC ENERGY MARKET COMPETITION TASK FORCE, REPORT TO CONGRESS ON COMPETITION IN
WHOLESALE AND RETAIL MARKETS FOR ELECTRICITY 10 (2006), available at http://www.ferc.gov/legal/fed-
sta/ene-pol-act/epact-final-rpt.pdf.
115
Electricty 101, US DEPT OF ENERGY, available at http://energy.gov/oe/information-center/educational-
resources/electricity-101#sys3.
116
REGULATORY ASSISTANCE PROJECT, ELECTRICITY REGULATION IN THE US A GUIDE 9 (2011), available at
www.raponline.org/document/download/id/645.
117
Edison Electric Institute, Electricity Transmission,
http://www.eei.org/OURISSUES/ELECTRICITYTRANSMISSION/Pages/default.aspx.
118
Andrew Mills, Ryan Wiser, and Kevin Porter, THE ELECTRIC POWER TRANSMISSION AND DISTRIBUTION (T&D)
EQUIPMENT MARKET 2011-2021 (February 2009), available at http://www.visiongain.com/Report/626/The-Electric-
Power-Transmission-and-Distribution-(T-D)-Equipment-Market-2011-2021.
119
The Cost of Transmission for Wind Energy: A Review of Transmission Planning Studies, ERNEST ORLANDO
LAERENCE BERKELEY NATIONAL LABORATORY, available at http://eetd.lbl.gov/ea/emp/reports/lbnl-1471e.pdf.
120
COSTING METHODOLOGY FOR ELECTRIC DISTRIBUTION SYSTEM PLANNING, THE ENERGY FOUNDATION at 1
(2000), available at http://sites.energetics.com/MADRI/pdfs/CostMethodFinal.pdf.
21

22. costs from a low of $0 to a high of $1,795 per kW.”121
Considering the monumental value of the existing US electricity system, the renewable
energy market would do well to capitalize off of that preexisting infrastructure. Transitioning to
a fully renewable energy system is an incredibly expensive endeavor, and will “require an
enormous commitment of valuable materials, such as steel and rare metals, to one sector of our
economy.”122
Renewable energy market viability will be realized much sooner if it is unburdened
by such daunting infrastructure costs.
b. Private/regulatory infrastructure
In addition to a large physical presence, power lines being never too far from view in any
one spot in the US, utilities also represent an expansive regulatory structure designed with public
benefit as a central aim. “Like other network industries…the regulation of electricity was based
on the central political economic idea that the industry had natural monopoly characteristics and
that electricity served the public interest.”123
Regulated utilities in the US are the domain of
private industry, however, they receive a significant amount of public oversight and government
regulation.
The utility business represents a compact of sorts; a monopoly on service in a particular
geographical area (coupled with state-conferred rights of eminent domain or
condemnation) is granted to the utility in exchange for a regime of intensive regulation,
including price regulation, quite alien to the free market . . . . Each party to the compact
gets something in the bargain. As a general rule, utility investors are provided a level of
stability in earnings and value less likely to be attained in the unregulated or moderately
121
Id. (the four utilities compared were Texas’s CP&L, Missouri’s KCP&L, Californias PG&E, and Indiana’s PSI).
122
Hannah Wiseman, Lindsay Grisamer, E. Nichole Saunders, Formulating A Law of Sustainable Energy: The
Renewables Component, 28 PACE ENVTL. L. REV. 827, 839 (2011).
123
Joseph P. Tomain, The Past and Future of Electricity Regulation, 32 ENVTL. L. 435 (2002).
22

23. regulated sector; in turn, ratepayers are afforded universal, non-discriminatory service
and protection from monopolistic profits through political control over an economic
enterprise.124
The regulators tasked with monitoring utility behavior are the Federal Energy Regulatory
Commission (FERC), and State Public Utility Commissions (PUCs), any one utility being
regulated by one or both. Some of the major regulatory structures imposed on utilities are
outlined in the Federal Power Act (FPA), the Public Utility Regulatory Policies Act (PURPA),
and various FERC issued orders. The reasoning behind such exacting regulation lies the fact that
“most utility consumers cannot “shop around” between multiple providers as a result of the
natural utility monopoly, [thus] regulation serves the function of ensuring that service is
adequate, that companies are responsive to consumer needs, and that things like new service
orders and billing questions are handled responsively.”
For the purposes of this article, the focal point on electricity regulation is limited to
procurement mandates and electricity pricing.
i. Procurement and least cost standards
Regulated utilities are under an obligation to supply reliable, inexpensive power to the
public. Utilities are under an obligation to buy electricity or build generation capacity to fulfill
that obligation of to ensure reliable, inexpensive electricity for customers. Mandating that
regulated utilities buy power in circumscribed regulatory plans has consistently been a way to
align political and customer interests with utility behavior. In a series of FERC orders and cases,
the courts have resoundingly affirmed procurement mandates, or electricity purchasing
mandates, in their constitutionality.125
124
Jersey Central Power & Light Co. v. FERC, 810 F.2d 1168, 1189 (1987).
125
See, FERC P 61191 (F.E.R.C.), 2012 WL 4039274, and American Forest and Paper Association v. FERC, 550
F.3d 1179 (2008), and 135 FERC P 61234 (F.E.R.C.), 2011 WL 2418554 (terminating a utility’s mandatory
purchase obligation only where market dynamics granted qualifying facilities alternative access to the grid).
23

24. Furthermore, utilities are under an obligation to supply the least expensive electricity to their
customers. Regulated utilities have a right to earn profits, but they are not guaranteed a profit. “A
regulated utility has no constitutional right to a profit, and a company that is unable to survive
without charging exploitative rates has no entitlement to such rates.”126
The ability to recover a
profit from services rendered can be affected by imprudence on the part of the utility. “If the
inclusion of property not currently used and useful in the rate base automatically constituted
exploitation of consumers, …then the Commission would be justified in excluding such property
summarily even in cases where the utility pleads acute financial distress.”127
Utilities must
convince a PUC that a proposed investment, whether it be for generation, or for some other
service function, is prudent before they are allowed to commence with the project. In order to be
granted permission by the PUC, the utility must demonstrate that the investment will ultimately
lead to a public benefit. This can mean that an approved investment can later prove imprudent
and the utility cannot recover its expenditures. In the case of investments in nuclear power plants
in the 1970’s, “many investments which were prudent, indeed considered essential, when made,
have now by necessity been cancelled. Forked River was one, and in 1980 Jersey Central
abandoned it, having concluded “that it must devote whatever resources it had available to ... less
capital intensive and more politically acceptable alternatives.””128
Utilities have existed under a structure that has been fleshed out over the past century.
With billions of dollars in physical and legal infrastructure in place, the renewable market will be
able to advance at a rate much faster if it utilizes existing frameworks. Based on these existing
126
Jersey Central Power & Light Company v. Federal Energy Regulatory Commission, 810 F.2d 1168 (D.C. Cir.
1987).
127
Id.
128
Id.
24

25. frameworks, a new regime can be developed that utilizes procurement mandates and least cost
planning to incorporate renewables to synch up public sentiment and utility behavior. Ultimately,
there is no need to reinvent the (electricity delivery) wheel.
IV. HOW TO MAKE UTILITIES BUY OR BUILD RENEWABLE ENERGY
The call to transition more renewables moving towards a majority renewably generated
electricity system in the US has been made. Public sentiment supports investing in renewables
and the dangers of relying on fossil fuel based energy are clearer every day. However, the
renewable market has not yet found its footing. As detailed above, the existing renewable
investment policies have led to mixed results. Renewable generation projects are being built and
their market share is rapidly increasing, but the viability of the renewable market has been
sharply undercut by inconsistent support, and political waffling. The following is a proposal to
get more renewable energy on the grid in an efficient, and short-term way by using existing
infrastructure, but simply updating it to better suit the needs of the public and the fledgling
renewable market.
a. Procurement – RPSs – stronger, longer
For the foreseeable future, investments in renewables must remain reliant on a regulatory
scheme that supports renewable generation. Currently, the relationship between renewables and
fossil fuel based generation is like David and Goliath; fossil fuel generation is so entrenched and
has benefitted from political support for so long that it would be foolish to think that renewables
could overtake the market without a well-laid plan. Because public support for renewable energy
is so strong, mandates that guarantee renewables a spot in the energy marketplace should remain
in tact, but should be strengthened. As detailed above, RPSs in conjunction with various other
25

26. incentive policies, have been very successful in securing renewables a foothold in the national
energy market. “The cost curve for renewables has steadily been coming down, however, with
both significant public investment (through tax benefits and other policies…) and scale-related
production cost declines accounting for the reductions. Wind power is the most striking
example.”129
However, a major complaint hurled against renewables is that they just don’t make
economic sense, and are too subsidy dependent; “coal is … relatively plentiful and inexpensive
(in strict financial terms) compared to natural gas resources (at historic prices), while renewable
resources remain plentiful but relatively expensive in strict financial terms.”130
Though the cost
of renewables has consistently come down, with the security of guaranteed demand via
aggressive RPSs, the renewable market will be allowed the room to start competing within more
natural market dynamics, against other fossil fuels and various renewables, alike.
If renewables have been able to garner twelve percent of the energy market under
existing RPSs,131
the potential to secure substantially all but guaranteed with more aggressive
mandates. With this in mind, state RPSs should be updated to mandate seventy, eighty, and up to
ninety132
percent renewable energy over the next few decades, but certainly well within this
century, to create a stable marketplace that will allow renewables to thrive.
b. IRPs – integrated resource plan – least cost planning
Mandating renewable benchmarks is a critical component to ensuring renewable market
129
Timothy P. Duane (FNd1), Greening the Grid: Implementing Climate Change Policy Through Energy
Efficiency, Renewable Portfolio Standards, and Strategic Transmission System Investments, 34 VT. L. REV. 711,
780 (2010).
130
Id. at 714.
131
RENEWABLE ENERGY, INSTITUTE FOR ENERGY RESEARCH, available at
http://www.instituteforenergyresearch.org/energy-overview/renewable-energy/#_edn2.
132
One hundred percent renewable energy should be the goal, but it is likely that some form of fossil fuel based
generation will remain part of the energy market, such as natural gas, for reliability and dispatch-ability purposes for
some time.
26

27. stability, but after that, renewables should be allowed breathing room to eventually stand on their
own, and move away from subsidy dependence. In conjunction with aggressive RPS mandates, it
is critical that utilities be responsive to RPS demands by buying or procuring renewable energy.
Because utilities are so centralized and well-established, utilities should continue to follow least-
cost planning mandates, and buy power or build generation facilities to meet their mandated
needs. To ensure that regulated utilities are complying with least-cost standards, they need to
plan out their generation needs for consistency with an integrated resource plan (IRP). “Whereas
traditional utility regulation focused on adjusting the prices electric utilities charged, integrated
resource planning is aimed at ensuring efficient use of electricity and the resources used to
produce it.”133
The overarching goal of an IRP is the requirement that utilities meet demand
growth by increasing supply but also by simultaneously trying to decrease demand with internal
efficiency measures.134
With least cost planning and IRPs in mind, utilities should then attempt to meet mandated
renewable demand by either building renewable generation plants or buying it from independent
power producers on the open market. Since utilities are be responsible for generating electricity
to meet their customer demand, they should develop generation proposals and bring them to their
PUC for approval. The PUC should then evaluate that proposal against other independent power
producer proposals. If the utility has the least cost plan, they should be granted approval to build
their own generation, but if independent power producers can supply electricity at a better
overall rate, then the PUC should reject the utility proposal and recommend that the utility
purchase the independently produced power.
133
Scott F. Bertschi, Integrated Resource Planning and Demand-Side Management in Electric Utility Regulation:
Public Utility Panacea or A Waste of Energy?, 43 EMORY L.J. 815 (1994).
134
Id. at 830.
27

28. The benefit of comparing utility proposals to the open market is that it will stabilize costs and
expand power resources available for serving customers. Many factors will account for whether a
utility proposal will stand up against independent suppliers, such as access to transmission lines,
siting viability, and access to various renewable resources. This will be a great equalizer.
Eventually, natural market dynamics will prevail.
V. CONCLUSION
Ultimately, the renewable market is prime for reevaluation and implementation of new goals.
The assortment of development incentives that have been utilized up to now have done a great
job of carving out a foothold in the national energy market. But the renewable market is strong
enough to be pushed harder, yet with appropriate oversight. The key to rapid development of
renewable energy is to require utilities to build or procure renewable power in increasingly large
quantity. This will cement that independent suppliers of electricity must be able to compete at
utility-scale, however, this is also the most efficient way to get the largest amount of renewable
energy on the grid in the shortest amount of time. The underlying concept that has been proven
under current conditions is that if the people demand it, renewable energy will be provided. If
more is demanded, it too will be supplied.
28