State programs to promote the development of renewable energy continue to multiply and evolve, presenting challenges, opportunities and some unexpected consequences for the US power market.
Background
At last count, 20 states and the District of Columbia have established renewable portfolio standards — called "RPS"— requiring electric utilities to supply a specified minimum percentage of their electricity from renewable fuels, such as wind, biomass and small-scale hydropower.
Although each state RPS program is unique, each program addresses six core issues. They are: what qualifies as a renewable fuel, the goal (frequently expressed as a percentage of the state’s total retail load), a phase-in schedule, the manner in which electricity retailers are allocated responsibility for achieving the goal, whether a utility that does not want to generate electricity from renewable fuels can satisfy its obligations by purchasing "renewable energy credits" from other, renewable generators, and
