Renewable Energy Portfolio Standard (RPS) Under an RPS, retail electricity suppliers (electric utilities) must provide a minimum amount of electricity from renewable energy resources or purchase tradable credits that represent an equivalent amount of renewable energy production. The minimum requirement is often set as a percentage share of a supplier’s total retail electricity sales. The second degree amendment to H.R. 6 passed by the House on December 6, 2007, proposed a national RPS target that aimed to reach 15% of total electricity sales by 2020. Up to 4 percentage points of the 15% target could be met with energy efficiency measures. This provision was stripped out by the Senate and was not included in the final version of the bill. (For more details on issues related to the RPS provision, see CRS Report RL34116, Renewable Energy Portfolio Standard (RPS): Background and Debate Over a National Requirement, by Fred Sissine.)
Energy Tax Subsidies.
The House-passed second degree amendment to H.R. 6 contained provisions that would have repealed about $22 billion of oil and gas subsidies that were designed to offset the cost of supporting a variety of energy efficiency and renewable energy tax incentives. These proposed incentives would have included a four-year extension of the renewable energy electricity production tax credit. Most of those provisions were stripped out by the Senate and were not included in the final bill. Enough tax revenue offsets were included to cover the estimated cost of the CAFE provision. (For more details about the proposed renewable energy incentives, see CRS Report RL34162, Renewable Energy Issues in the 110th Congress, by Fred Sissine. For more details about the proposed repeal of oil and gas subsidies, see CRS Report RL33578, Energy Tax Policy, by Salvatore Lazzari.)
Brief Summary of Legislative Action
On January 18, 2007, the House passed the 14-page CLEAN Energy Act (H.R. 6) by a vote of 264-163. The bill proposed to repeal certain oil and natural gas subsidies, thus generating revenue for an Energy Efficiency and Renewables Reserve. The Reserve was designed to reduce foreign oil dependence and serve other purposes. The actual uses of the reserve would have been determined at a later date by further legislation.
On June 21, 2007, the Senate passed its first degree amendments to H.R. 6 as the proposed Renewable Fuels, Consumer Protection, and Energy Efficiency Act of 2007. This action transformed H.R. 6 into a 500-page omnibus energy policy bill, with a primary focus on energy efficiency and renewable energy. The Senate’s amendments were drawn primarily from the proposed Energy Savings Act of 2007 (S. 1321).2 The key provisions of the Senate-passed H.R. 6 were appliance efficiency standards, an increase of the renewable fuel standard to 36 billion gallons by 2022, and an increase of the combined corporate average fuel economy standards to 35 miles per gallon (mpg) by 2020.
On August 4, 2007, the House passed the omnibus energy policy bill, H.R. 3221, which had two divisions and 13 titles. Division A contained provisions of the New Direction for Energy Independence, National Security, and Consumer Protection Act. An adopted floor amendment (H.Amdt. 748) added a 15% renewable energy portfolio standard (RPS). Division B, the Renewable Energy and Energy Conservation Tax Act of 2007, was also added as a floor amendment and contained the House-approved version of H.R. 2776. It added four titles to H.R. 3221 that included a four-year extension of the renewable electricity production tax credit and other efficiency and renewables incentives.
Because the House omnibus bill (H.R. 3221) and the Senate omnibus bill (H.R. 6) had different bill numbers, the bills could not be taken directly to conference committee.3 However, after the House completed action on H.R. 3221, informal bipartisan negotiations over the omnibus energy bills began between the House and Senate. Key issues included CAFE, the renewable fuel standard, the RPS provision in H.R. 3221, and a proposed repeal of certain oil and natural gas subsidies to offset costs for new energy efficiency and renewable energy tax incentives.
