Blowing in the Wind: How a Two-Tiered National Renewable Portfolio Standard, A System Benefits Fund, and Other Programs Will Reshape American Energy Investment and Reduce Fossil Fuel Externalities

Fordham Journal of Corporate & Financial Law, Apr 2018

Corey Stephen Shoock J.D.

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Blowing in the Wind: How a Two-Tiered National Renewable Portfolio Standard, A System Benefits Fund, and Other Programs Will Reshape American Energy Investment and Reduce Fossil Fuel Externalities

Fordham Journal of Corporate & Financial Law Corey Stephen Shoock J.D. - 2007 Article 2 Fordham University School of Law, 200 8 Copyright c 2007 by the authors. Fordham Journal of Corporate & Financial Law is produced by The Berkeley Electronic Press (bepress). BLOWING IN THE WIND: HOW A TWO-TIERED NATIONAL RENEWABLE PORTFOLIO STANDARD, A SYSTEM BENEFITS FUND, AND OTHER PROGRAMS WILL RESHAPE AMERICAN ENERGY INVESTMENT AND REDUCE FOSSIL FUEL EXTERNALITIES Corey Stephen Shoock∗ ∗ J.D., expected, Fordham University School of Law, 2008; B.A. summa cum laude (History & Political Science) The State University of New York at Buffalo, 2005 . The Author wishes to thank Courtney Patrick Mitchell, Megan Petrus, Kizzy Rosenblatt and everyone at the Fordham Journal of Corporate & Financial Law for their guidance and toil. For her deep love and loyalty the Author is forever indebted to Dr. Kari Mergenhagen, as well as to his family for their undying support and enthusiasm. The author also wishes to express his gratitude to Professor Paolo Galizzi for his expert tutelage in energy law. TABLE OF CONTENTS INTRODUCTION The manner in which the United States satisfies its energy needs over the next quarter century will determine the relative health of the country physically,1 politically,2 environmentally,3 and economically.4 By 2030, the nation will see a 36% rise in electricity consumption.5 Already the largest energy consumption sector,6 electric power sector needs will outpace the transmission grid’s distribution capacity7 and the country’s ability to absorb the deleterious financial effects of fossil fuelbased energy.8 Congress must respond. Respiratory illness, cancer, neurological disorders, and birth defects caused by fossil fuels cost the country billions of dollars a year.9 These billions of dollars, public health entitlements notwithstanding, represent a mass siphoning of capital that would otherwise, in the form of commerce or workforce participation, contribute to the domestic economy.10 The federal government is clearly complicit in allowing the status quo, for which individual policymakers ought to be ashamed. But more constructive is the fact that the solution is cognizable and can be implemented in a way that solves the mutually reinforcing crises of electricity demand,11 infrastructural antiquation,12 rising energy costs,13 and soaring public and private health care expenses,14 not to mention going a long way toward providing the environment an overdue respite.15 In applying the principles of both giants of twentieth century economic theory, demand-side and supply-side fiscal policy,16 Congress can cost-effectively and with minimal administrative oversight,17 change the course of American energy use.18 Furthermore, it can tailor its legislation to be compatible with existing industrial interests while spreading the benefits of lower emissions and reduced externality costs to the vast majority of the population.19 The states have already set the example.20 By incentivizing renewable power sources and mandating the production, distribution, and consumption of their output, the government can effectively make good on a public mandate for cleaner, cheaper, more reliable energy.21 To do this it needs to continue to implement methodology it already employs in the form of tax credits,22 capital financing assistance,23 and generalized production incentives24— all supply-side principles that have effectively resulted in the growth of the renewable energy industry to this point.25 The expansion of the supply-side tract must be met with an equally vigorous demand-side campaign.26 Like a parent giving a push to a child’s sled atop a snowy hill, Congress must simply dictate the industry’s trajectory and provide it catalytic force to supply the direction and momentum needed to encourage self-sustaining investment. Part I of this Note will address some examples of the health and environmental consequences of fossil fuels and touch on methods used for monetizing these externalities.27 In particular it will focus on coalbased energy, the market-share leader in electricity28 and the biggest threat to public health and the environment.29 As an answer to fossil fuel hegemony, Part II will examine the progress and potential of wind power,30 its technological improvement,31 receptivity to government initiative,32 response to investment structure,33 and the market wind already enjoys as exemplified in electricity consumption data.34 Part III will review state and federal renewable energy policies, with particular attention to wind power, that have supply-side and demand-side impacts.35 Part IV addresses the technical and regulatory challenges facing wind energy and other renewables, including transmission access rules,36 output variability37 and storage techniques,38 power grid integration,39 and infrastructural modernization.40 Technical solutions for many of these challenges offered by experts will be addressed.41 Finally, Part V will integrate examples of supply-side and demand policy initiatives into a comprehensive renewable energy policy proposal.42 I. THE FINANCIAL FALLACY OF FOSSIL FUELS Electricity markets in the United States are dominated by fossil fuels, and under current predictions, that fact is unlikely to change.43 In February 2007 the Energy Information Administration (the “EIA”), a branch of the Department of Energy, released their Annual Energy Outlook, a projection of electricity production to 2030.44 Using current trends, the EIA contends that fossil fuels will continue to account for the bulk of American electricity production for the next two and half decades.45 Currently, 50% of domestic electricity production comes from coal,46 with an additional 15% from natural gas,47 and 20% from nuclear sources48—making up the overwhelming majority of the domestic electricity market.49 Projections bear these trends out for the foreseeable future.50 Renewable energy, by contrast—with the exception of hydro power (e.g. Niagara Falls and the Hoover Dam)51— has largely failed to catch on because of the high costs associated with production and transmission,52 variable output,53 and the perception that a long-term market does not exist for these energies.54 Wind, photovoltaic (solar), geothermal, and biomass are the leading non-hydro sources of electricity currently available in the United States.55 Combined, however, they account for only about 2.5% of the nation’s electric power sector consumption.56 Unless the government changes how energy production costs are reflected, the status quo ought to endure for fossil fuels and renewables alike. Under current federal pricing measurements, coal is the least expensive source of electricity57 (the EIA does not compile comparable production price statistics for renewables, but the International Energy Agency estimates that utility-scale wind energy costs in the United States are close to that of natural gas in “high quality wind regimes”).58 According to the EIA, the cost of coal at electric gener ating plants in 2006 averaged $1.70 in nominal dollars per million British thermal units 2005) (showing statistics highlighting these sources as the leading renewables in producing power). 56. See Monthly Energy Review: March 2007, supra note 6, at 35 (999 trillion Btu out of 39,710 total in 2006) . 57. See Annual Energy Outlook 2007, supra note 5, at 174. 58. Int’l Energy Agency, Renewable Energy: Market and Policy Trends in IEA Countries 656 (2004) [hereinafter Renewable Energy Report]. According to a Renewable Energy Policy Project (REPP) analysis, “Utility-scale wind farms in the U.S. produce wind power at a levelized cost of approximately [$0.02 to $0.06] per kilowatt hour. . . . [W]hile the cost of energy of a particular wind project is relatively straightforward, the comparison of the cost of wind generation to other types of generation is often controversial,” owing to the fact that levelized cost statistics, used to estimate wind production cost, include the “annual cost of recovering the total capital costs plus the recurring costs such as operations and maintenance and royalty payments divided by annual expected output.” Reeves, supra note 32, at 11. The EIA’s fossil fuel production cost statistics are not measured on the basis of levelized cost. See id. at 12. To illustrate, the author cited a 2001 conference paper issued by Ronald L. Lehr, John Nielsen, Steven Andrews, and Michael Milligan of the National Renewable Energy Laboratory. Id. See Ronald L. Lehr et al., Colorado Public Utility Commission’s Xcel Wind Decision, NREL/CP-500-30551 (Sept. 2001), available at The conference paper involved a 1999 contract award decision made by the Colorado Public Utility Commission on a “head-to-head” comparison between natural gas and wind. The commission initially chose to give the contract to the natural gas generator based on “low natural gas costs, low capacity value for wind, and high wind ancillary service costs,” but reconsidered and found the wind power bid was “‘justified on purely economic grounds’” as long as gas prices were more than $3.50 per million cubic feet in light of the fair capacity value of the wind project (49 MW for a 162 MW project) and the fact that “ancillary services to back up new wind power are not a major cost.” Reeves, supra note 32, at 12. For more on levelized cost, see infra note 154 and accompanying text. (“Btu”).59 Petroleum and gas, the other fossil fuels that are used in electricity production, do not compare with coal’s low cost.60 Furthermore, while the cost of production of coal-based electricity has in fact gone up considerably in the last ten years,61 the EIA does not project any rise between now and 2030 to be more dramatic than 0.1% in real dollars per year.62 Thus, there is no reason to expect the status quo of the electricity market to change without outside action. Since coal supplies in the United States are plentiful,63 limiting coal-burning will not reduce dependence on foreign sources of energy.64 The casus belli for such outside action is the fact that the government’s pricing figures neglect to factor in the full costs of fossil fuel production, including environmental and health costs that are not passed onto consumers directly in their utility bill.65 For example, utility companies do not have to account for the consequences of approximately six billion metric tons per year of carbon dioxide emissions, a total that will increase to nearly eight billion metric tons per year by 2030, a twenty-five-year increase of about 30%.66 Nor is a financial charge indexed to other consequences of fossil fuel burning. Increases in the emission of sulfur, methane, carbon monoxide, nitrogen oxides, ozone, volatile organic compounds, and other particulate matter wreak havoc on human and natural habitats alike by causing things like acid rain, urban ozone (caused primarily by nitrous oxide emissions, resulting in respiratory problems in humans), and global climate change.67 Among fuels used for electricity generation, coal is by far the largest producer of these emissions, producing far beyond its proportional market share.68 While coal-based power is seen to be the least expensive source of electricity on the market today,69 the market dynamics that favor coal are substantially flawed.70 The indirect costs associated with the production of electricity from coal are simply staggering.71 During the mining stage land is permanently damaged, air and water sources are contaminated, ground subsidence causes surface collapses, and workers can be injured or killed.72 During processing and utilization, heavy metal and acid is given off, and particulate matter, carbon dioxide, sulfur dioxide, and nitrogen oxides are emitted into the atmosphere, causing seemingly immeasurable damage and destruction to public and private property, wildlife, and public health.73 Every year, the more than 600 coal-burning plants in the United States74 emit more than 98,000 pounds of mercury into the air75 while creating another 81,000 pounds of mercury pollution from fly ash and scrubber sludge76, all after 20,000 pounds of mercury is released in preburning “cleaning” procedures—totaling 200,000 pounds.77 That mercury, along with arsenic, cadmium, and other heavy metals, seeps out during the coal-burning process and travels either directly through ground water and airborne particles, or indirectly through the food chain 67. See supra note 15 and accompanying text (IPCC); Carlin, supra note 65. 68. See Energy Info. Admin., Annual Energy Review 2005 , DOE/EIA-0384, at 350-52 (July 2006) [hereinafter Annual Energy Review 2005 ]. 69. See Monthly Energy Review: March 2007, supra note 6, at 135. 70. See Cherry & Shogren, supra note 29, at 4 (“[I]f the market price of coal or energy or both does not capture the social costs of coal use, individual coal users face incentives that suggest more consumption than society desires relative to alternative sources of energy.”). 71. See Schneider, supra note 1, at 12-15 (revealing the mortality rates for a number of states and linking heart attacks and lung cancer to pollution). 72. See Cherry & Shogren, supra note 29, at 14. 73. Id. 74. Coal Takes Heavy Human Toll, USA Today Magazine, Oct. 16, 2004. 75. Id. 76. Id. 77. Id. (often through fish), to humans.78 Mercury, even in small doses, is converted easily through human metabolism into the neurotoxin methylmercury.79 The result of the contamination is that one out of every six women of childbearing age may have enough of a concentration of mercury to permanently damage a developing fetus, meaning 630,000 babies a year born in the United States (out of 4 million) are at risk for severe neurological consequences as a result of gestational mercury poisoning.80 Coal also causes nearly 554,000 asthma attacks, 16,200 cases of chronic bronchitis, and 38,200 non-fatal heart attacks each year.81 Not surprisingly, proximity to coal-burning facilities increases the likelihood that a person becomes one of the 23,600 deaths every year attributed to power plant pollution,82 each death taking an average of fourteen years off normal life expectancy.83 All told, the health care costs caused by plant emissions total an estimated $160 billion annually. 84 Other grisly consequences from living near coal burning include a high rate of stomach cancer,85 autism in children (for every 1,000 pounds of mercury released in a Texas county, autism rates rose 17%),86 and pneumoconiosis in coal miners (also known as “black lung disease”).87 Environmentally, the externality costs of air pollution, acid rain, and global warming are also significant.88 For instance, according to one set of estimates, the “annual marginal cost of air pollution and acid deposition” is between $10.39 and $11.02 per short ton of coal; for climate change, the marginal cost is between $0 and $4.50 per million Btu.89 Absent any consideration of climate change, the approximate “social costs of coal as a percentage of private costs range from about 40% to 275%.”90 The range for natural gas is 12% to 95%, 112% to 123% for petroleum, and 14% to 17% for nuclear. 91 Another set of estimates emphasizes that “coal is by far the most under-priced energy resource,”92 and that at a price of $30 per ton would carry with it external costs of almost $160 without including climate change risks which would bring costs to $190 per ton.93 While monetizing the total social and environmental costs to society of fossil fuel use is an inexact science, the causal link between polluting fuels and resulting externalities is undeniable.94 Despite arguments and economic models that show wide-ranging and heavy social costs to fossil fuel burning, and in particular coal consumption, unless and until the industries themselves are compelled to account for these costs, investment will remain high in traditional energy sources.95 Alternatives, still too underdeveloped as a whole to compete with the infrastructure96 and reliability of fossil fuels,97 will need time and money to make up the difference.98 With technological advances in turbine design reducing the levelized cost of output,99 and not reliant on fossil fuel burning like biomass power,100 wind energy has the best chance of all truly clean energy sources to make the most immediate and long-lasting impact on the electricity market.101 II. A GUST OF ELECTRICITY: HOW WIND POWER IS TAKING OVER THE WORLD AS AN INCREASINGLY VIABLE INVESTMENT OPTION AND AN ENERGY SOURCE With rising externality costs and significant health and environmental consequences looming,102 forty-nine states, the District of Columbia, and Puerto Rico have implemented some form of incentive for the production (supply-side) or consumption (demand-side) of electricity from renewable energy sources.103 Of those forty-nine states, forty-six include incentives for wind energy,104 the fastest growing renewable electricity generation source in the world.105 State wind incentives, as for other renewables, integrate supply-side and demandside principles into a combination of both production and consumption tax credits, grants, loans, production incentive payments, and sale and use standards.106 State action that comprehensively addresses energy distribution and consumption contributes to localized success in encouraging the construction of wind power production facilities (usually called “wind farms”) in nearly every region of the country. 107 In fact, because the wind-power industry has proven uniquely responsive to government action,108 this Note will treat wind power as the bellweather for assessing the relative effectiveness of renewable energy legislation. The commercial promise, potential proliferation, and likely contribution to national energy needs that wind power represents109 requires that it be given special attention in the review of renewable energy policy in general.110 In Febru ary 2006 , President George W. Bush voiced his ambition that fully 20% of the nation’s electricity could come from wind,111 mirroring results in Europe where wind accounts for a 10% to 25% electricity market share in Denmark, Germany, and areas of Spain.112 By l ate 2006 , installed wind-based electricity generating capacity in the United States exceeded 10,000 megawatts.113 Up from a 2,000 megawatt capacity in 1999, wind is the fastest growing renewable energy source in the world, and is second to only natural gas in newlyDevelopment in the United States, NREL/TP-620-34599, at 1 (July 2003) [hereinafter L. Bird et al.] (discussing the “drivers for wind development in a dozen leading states”). 107. See DSIRE Website, supra note 20 (listing the policies by state); Am. Wind Energy Ass’n’s Wind Project Data Base, (for a table of installed wind energy capacity). While the Southeast—excluding Tennessee—does not have wind energy generation facilities, other renewables benefit from local incentive policies on the state and retailer level. See DSIRE Website, supra note 20. 108. See Policies to Promote Renewables, supra note 32, at 8 (Figure 2 illustrates the growth of wind capacity in the U.S. relative to the implementation of certain government policies between 1980 and 2003); see also NREL Policies and Market Factors, supra note 82 and accompanying text. 109. See Global Wind Energy Council, Global Wind Energy M arkets Continue to Boom – 2006 Another Record Year, Feb. 2, 2007, available at newsroom/pdf/070202__GWEC_Global_Market_Annual_Statistics.pdf [hereinafter Global Wind Energy Council]. 110. See Analysis of a 10% Renewable Portfolio, supra note 100, at 17. 111. See Emerging U.S. Renewables Grab Presidential Attention, Env’t News Serv., Feb. 22, 2006, available at 2006/2006 -02-22-02.asp [hereinafter U.S. Renewables Grab Presidential Attention] 112. See Am. Wind Energy Ass’n, Wind Energy Basics, Feb. 5, 2007, available at [hereinafter Wind Energy Basics]. 113. Am. Wind Energy Ass’n, U.S. Wind Energy Installations Reach New Milestone, Aug. 14, 2006. installed generating capacity in the United States, as of 2005 .114 Worldwide, wind energy capacity grew 15,197 meg awatts in 2006 alone,115 accounting for nearly 75,000 megawatts total.116 Furthermore, busbar costs have dropped from $0.38 per kilowatt hour since government support for wind power began in the early 1980s, to between $0.02 and $0.06 per kilowatt hour now.117 One megawatt hour of electricity on average in the United States produces emissions of 1,341 pounds of carbon dioxide,118 7.5 pounds of sulfur dioxide,119 and 3.55 pounds of nitrogen oxides.120 If windgenerated electricity totaled 10 million megawatt hours per year, or roughly the generation totals at 2002 capacity levels,121 it would avoid emissions of 6.7 million tons of carbon dioxide,122 37,500 tons of sulfur dioxide123 (which when combined with atmospheric water vapor becomes sulfuric acid, the primary component of acid rain), and 17,750 tons of nitrogen oxides.124 The more wind energy that is produced in a geographic region, the more effect it will have on displacing toxic emissions.125 The American wind energy market is projected by its industry trade association, the American Wind Energy Association (the “AWEA”), to be able to support 10,000 megawatts of wind power installations every year. This in turn would make the goal of producing 20% of the nation’s electrical supply achievable.126 Considering its growth, the wind industry is still remarkably sensitive to legislative action.127 In fact, nearly all of the industry’s major challenges are addressable through regulatory initiative and tax policy.128 The wind power industry has shown responsiveness to virtually every type of supply and demand-side incentive policy on the books, including each of the following: installation credits, net metering, system benefits funds, sales and property tax exemptions, grants, loans, production tax credits and incentives, and renewable portfolio standards.129 For example, in 2003 the EIA released a study in which they examined the possible effects of a 10% national renewable portfolio standard by 2030130—a lower percentage and later date than most states currently employing a renewable portfolio standard.131 Wind energy, the study suggested, would be the greatest beneficiary of such action, while fossil fuels coal and natural gas would be most negatively influenced in terms of production, albeit not heavily.132 The price of electricity at end-use sectors (residential, commercial, industrial, transportation), the EIA found, would largely remain unaffected.133 Furthermore, in addition to legislative incentives and marketadjustment policies, government investment into research and development has allowed the wind industry to help itself as well.134 The amount of electricity that can be harvested from wind power is a function of the mass of the moving air and its velocity.135 Therefore improvements in the turbine (which includes a rotor, gearbox, 128. See id. at 35-36 (finding that wind power development is promoted most strongly by state tax and financial incentives, including renewable portfolio standards, and technological improvements “facilitated by federal tax incentives,” but stating that transmission costs brought about by regulatory “uncertainties” negatively affect industry growth). 129. See L. Bird et al., supra note 127 and accompanying text; see also Am. Wind Energy Ass’n, Frequently Asked Questions About Net Metering, available at (outlining some of the benefits net metering can provide in a small-scale residential wind facility). 130. Analysis of a 10% Renewable Portfolio, supra note 100. 131. See DSIRE Website, supra note 20, available at 132. See Analysis of a 10% Renewable Portfolio, supra note 100, at 4, 17-18. 133. See id. at 4. 134. See Wind Energy R&D, supra note 31, at 4 (arguing that 40% of the reduction in costs for wind power is a result of technological improvements, with government polices that encourage economies of scale accounting for most of the rest); see also Renewable Energy Report, supra note 58, at 646 (Figure 5), 655-56. 135. See Reeves, supra note 32, at 5. monitoring equipment, and a tower)136 have a direct effect on a wind power facility’s output.137 For example, in 1981, a standard turbine’s rotor was 10 meters in diameter with a rated capacity of 25 kilowatts.138 By 2000, standard rotor diameter measures 71 meters in diameter with a capacity of 1,650 kilowatts.139 Innovations like larger, better designed turbines, situated in larger wind farms substantially reduce the cost of production per kilowatt hour in large part because they are more efficient to manage and operate.140 As turbine capacity increases, energy production costs go down141 and investment goes up.142 Continued technological improvements, like those that support lower wind speed turbine output,143 will further support the wind market,144 and provide power without the risk of rising fuel costs.145 136. Id. at 8-9. 137. Id. at 5: The energy content of a particular volume of wind is proportional to the square of its velocity. Thus, a doubling of the speed with which this volume of air passes through a wind turbine will result in roughly a fourfold increase in power that can be extracted from this air. In addition, this doubling of wind speed will allow twice the volume of air to pass through the turbine in a given amount of time, resulting in an eightfold increase in power generated. This means that only a slight increase in wind velocity can yield significant gains in power production. A. Wind Investment: Blowing Money Is a Becoming a Better Bet Despite optimistic projections146 and technological improvements to the turbines that actually generate the electricity,147 both the AWEA and the President recognize that the long-term health of the industry lies in private investment.148 Between 1995 and 2005, private investment in renewables totaled roughly $180 billion, including $39 billion in 2005, six times higher than ten years earlier.149 Despite this growth, and the fact that wind installations are going up faster than nuclear power plants worldwide,150 the structure of project ownership is crucial.151 The AWEA notes that because of the capital-intensive nature of wind energy and the cheaper financing options available to utility-owned energy projects, it is still more expensive to produce a kilowatt hour as a private power producer than as a utility.152 Deregulation of the electric power sector and the rise of IOUs (investor-owned utilities) provide a safer, potentially more lucrative option for investment.153 IOU ownership, according to a 1996 Lawrence Berkeley National Laboratory study cited by the AWEA, reduced the levelized costs of power production by as much as 30%.154 While product novelty may benefit certain industries with regard to financing, wind power producers do not enjoy this advantage. In fact, it is the opposite.155 The AWEA notes that “lenders therefore offer less favorable financing terms and demand a higher return on investment than for more “conventional” energy sources.”156 Higher interest rates on capital investment, if reduced to the same level as natural gas plants, would reduce wind energy production costs approximately 40%.157 Nonetheless, as wind energy grows in market share158—and the European example offers support for such an eventuality159—novelty wears off. From the time of the Lawrence Berkeley National Laboratory study, wind power generation has grown exponentially.160 In 1996, at the study’s publication, installed capacity in the United States was roughly 1,700 megawatts, having languished through relatively slow growth through most of the mid-1990s.161 Today output is far greater,162 and industry advocates expect the economics of today’s wind industry to attract new capital.163 Supply-side legislation notwithstanding, potential investors, however, need to be convinced of the long-term marketability of the product.164 lifetime of the plant.” Id. at n.1; see also AWEA, Wind Economics, supra note 138 (referencing the same study’s findings in February 2005) . 155. AWEA, Wind Economics, supra note 138. 156. See id. (citing Wisner & Kahn, supra note 33, at 11). 157. See id. (finding that “a 50-[megawatt] wind farm delivering power at just under 5 cents per [kilowatt hour] would, if using typical natural gas financing terms, generate electricity for 3.69 cents per [kilowatt hour]”). 158. See infra notes 165-206. 159. See Global Wind Energy Council, supra note 109; Am. Wind Energy Ass’n, Global Wind Energy Market Report, March 2004 at 2-4. 160. See Am. Wind Energy Ass’n, Wind Power: U.S. Installed Capacity: 19812006, available at, 161. See id. 162. Id. 163. See Am. Wind Energy Ass’n Jan. 23, 2007 News Release, supra note 142. 164. See Beck & Martinot, supra note 23, at 6 (explaining how a lack of familiarity with renewable technologies, coupled with premiums on acquiring investment capital— among other barriers—result from uncertainty about future technology performance and a generalized lack of information). The AWEA proposal, which would cost between $10 billion and $20 billion,384 envisions a regulatory scheme that ensures a closer-tocapacity power line use with non-discriminatory access, with $1 billion worth of local 345 kilovolt transmission lines added to the grid to avoid “bottlenecks and bolster secondary-level reliability.”385 This first step would open 26,000 megawatts of wind power capacity. 386 Next, two high-voltage lines from the northern plains, going east and west, would be built to streamline supply to population centers on the coasts and the industrial Midwest. Adding between 30,000 and 60,000 megawatts of wind power capacity to the system, it would be “enough new power to serve up to 18 million homes.”387 The problem with improving infrastructure is that the electricity market does not operate in a unified manner as part of one large integrated grid, but as a community of smaller regionally managed electricity administrators.388 Several regional and state transmission organizations, who determine which producers are permitted time on the grid, have gradually instituted discriminatory pricing schemes that essentially punish wind power generators for output variations. Their rationale is that lower-than-expected production requires them to keep backup generators running, regardless of whether it costs the system.389 proposal). 384. Caldwell, supra note 206. 385. Id. 386. Id. 387. Id. 388. See U.S. Dep’t of Energy Grid Study, supra note 7, at 2 (explaining in Fig. 1.1 that the North American Electricity Transmission Systems includes three interconnected “systems,” which in turn are comprised of 140 control areas who control local electricity operations and “coordinate reliability through 10 regional councils”). 389. See Imbalance Provisions for Intermittent Resources Assessing the State of Wind Energy in Wholesale Energy Markets, 70 Fed. Reg. 21,349, 21,349-50 (proposed Apr. 26, 2005) (to be codified at 18 C.F.R. pt. 35). In this notice of proposed rulemaking, FERC acknowledged that tariff charges levied on intermittent resources have become outdated and have become “unjust, unreasonable, unduly discriminatory or preferential.” Id.; see also Reeves, supra note 32, at 19 (listing the disadvantages that wind plants in particular have faced in dealing with utilities, including the regulatory infrastructure that was traditionally geared toward fossil fuels, fees charged to wind power producers for the distance the electricity traveled between its production site and the end-use consumer, charges for each transmission system through which the electricity travels (called “rate pancaking”), and charges based on peak output, rather than average output, which while not a major issue for fossil fuel producers, is important to wind power producers who have large differences between the two output The recent granting of regulatory authority to FERC is a step toward reigning in the disparate interests playing out on the grid.390 B. Wind versus Utilities? Up until now, it would appear that wind power, like any intermittent renewable, is a veritable thorn in the side of utility companies who maintain infrastructure, distribute, and deliver electricity to the consumers.391 With the advent and growth of wind power, utility grid managers must go out of their way to adjust their scheduling formulae to accommodate what would on paper appear to be a marginal producer at the expense of the predictable, easy-to-manage fossil fuel facilities.392 Prior to FERC regulations mandating nondiscriminatory access rules,393 utilities could offset costs, even anticipated costs, resulting from the impact of output variability.394 Now, they are required to act in a non-discriminatory fashion toward wind power facilities.395 However, wind power is not all bad news for the utilities.396 Notwithstanding the fact that in certain regions wind is in fact the low-cost option,397 a wind energy production presence within the purview of a utility grid manager can be a boon.398 For instance, wind power, like all renewables, can help offset the risks of supply shortages in fossil fuels.399 Additionally, since wind power can be added incrementally, excess capacity costs are limited.400 The inherent disadvantage of the remoteness of wind facilities can actually be turned into an infrastructural benefit as electricity generation outposts situated throughout the grid can reduce the risks of voltage concentration and overload in the production areas, thereby reducing maintenance costs.401 Furthermore, any government action on either the state or federal level to penalize distributors for creating pollution would make a renewable energy production facility a cost-saving asset.402 The same is true if the utility was faced with meeting a renewable portfolio standard that mandated it sell a certain quantity of electricity derived from nonpolluting sources.403 V. SAVING THE WORLD AND MAKING A BUCK AT THE SAME TIME: ENERGY SOLUTIONS FOR AMERICA IN THE TWENTY-FIRST CENTURY The burgeoning renewable energy industry, its investors, 404 and the public405 need Congress to implement a comprehensive national energy policy. It must integrate market-focused initiatives without losing sight of the social reasons for promoting clean energy. This includes programs that (1) aid renewable power producers, (2) marginalize fossil fuels to the extent possible, and (3) set a permanent standard for ensuring the place of renewable energy in the electricity market. This Note proposes that the federal government can meet these ends. To do so it must enact a scheme that incorporates elements of existing state and national policies while adding certain unique derivations. The first step is to ensure that current supply-side incentives will remain into the foreseeable future. Otherwise disaster waits in the wings.406 In fact, during a period (January 1, 2004 to October 4, 2004) between an earlier version of the production tax credit’s expiration and subsequent renewal, a deceleration in the increase of new wind farm development407 made it clear to industry experts that the tax credits were a necessary ingredient if long-term growth were to be assured.408 Once the federal tax credit was renewed, a sharp spike in wind facilities occurred.409 This legislative volatility has the unintended consequence of actually raising the price of wind power while the PTC is still in effect. For example, steel supply shortages stemming from white-hot demand for wind power facilities410 caused a development bottleneck and a 30% cost increase for the turbines as projects scrambled to meet the anticipated PTC expiration of December 31, 2007.411 Many of the resulting projects came in over-budget or late, setting off credit problems for many producers.412 If wind power’s tax credit and production incentive, duly buffered against inflation, are assured long lives, steady, predictable growth will follow.413 Absent any other initiative, wind energy is competitive only when placed on a level playing field with fossil fuels.414 This requires the continuation of supply-side aid.415 The degree to which the federal government subsidizes fossil fuel technology,416 including the billions appropriated to coal,417 oil, and gas418 in the same Energy Policy Act of 2005 that extended the PTC and REPI for renewables for two more years, belies the undeniable fact that the energy market as a whole leans heavily on legislative aid.419 Wind power thus is no more beholden to Congress than any other energy source. If the mandate to reduce dependence on foreign and polluting sources of energy is to be honored, the PTC and REPI must be extended indefinitely.420 The sooner they are, the sooner the stability can be ensured for the industry, thereby assuring a steady supply of inexhaustible energy.421 Research and development funds must continue to be allocated toward wind power development. The PTC, REPI, and the accelerated depreciation plan can only be the tip of the sword however. Successful state renewable energy plans rely on a bevy of supply-side incentives and demand-side initiatives to stimulate wind power development.422 Research and development grants are credited with helping to improve turbine technology.423 The ability to build taller towers with larger rotors out of less costly material boosted efficiency and drove down prices424 to the point where wind energy in certain regions compares favorably with fossil fuels.425 By being able to produce more energy from the same amount of wind input, power production facilities can better overcome or control for unpredictable or variable output.426 Furthermore, the federal government should continue to offer low interest loans, or subsidize a percentage of the interest on private loans to alleviate high capital costs up front.427 By reducing the impact of one-time overhead expenses, risks to investors decrease.428 Over time as steady power output (achieved without corresponding fuel costs) environmental costs [of fossil fuels] are largely externalized and born by society [it creates] a subsidy of sorts to fossil fuel burners”). 417. See id. at 5 ($9 billion). 418. See id. at 1 ($6 billion combined). 419. See U.S. House Comm. on Energy and Commerce Press Office, “Energy Policy Act of 2005 : Highlights of the Energy Policy Act of 2005 ,” Apr. 2005. 420. See Wind Energy and U.S. Energy Subsidies, supra note 413. 421. Id. 422. See L. Bird et al., supra note 127 and accompanying text. 423. See Wind Energy R&D, supra note 31, at 2-4. 424. See id. at 4-7. 425. See L. Bird et al., supra note 106, at 1. 426. See AWEA, Wind Economics, supra note 138. 427. See Sawin, supra note 22, at 20-21 428. Id. compensates for initial capital outlays,429 the long-term risk that capital financers see in wind projects should dissipate. The government simply needs to get the proverbial ball rolling. Congress also needs to enact a comprehensive national electricity distribution policy. First, renewables like wind need their rights to fair transmission access vigorously protected by regulatory bodies like FERC.430 Next, infrastructural modernization including the implementation of an integrated grid must go hand in hand with the generalized promotion and finance of renewable-energy production facilities.431 A system benefits fund—a public trust fund used in many states to pay for projects like these—432 is the proper vehicle to provide grid-wide renovation and upkeep, finance innovation, and even partially compensate for fossil fuel-caused social costs. A. The System Benefits Fund: Like Social Security but Bigger, More Efficient, and Without the Higher Taxes or that Third Rail Problem Financing a national system benefits fund to accomplish such a wide range of policy objectives is ambitious, but it need not bankrupt the Treasury. It must simply diversify its revenue streams. Often, a system benefits fund receives its budget through consumption fees whereby consumers pay a charge per kilowatt-hour consumed on their electricity bill.433 That is not necessary however. Instead, Congress should immediately begin scaling back fossil fuel subsidies.434 The recovered revenue would be reallocated to form the corpus of the fund. That is not to say that Congress should enact an economy and jobs-killing law effective immediately, but over time, perhaps consistent with the gradual implementation of the renewable portfolio standard discussed below, billions of dollars in fossil fuel subsidies should be siphoned into the to fund. Such a policy merely reflects the growing national mandate for 429. See Reeves, supra note 32, at 11. 430. See Nogee et al., supra note 3, at 32 (arguing that not only do unfair transmission access pricing penalties negatively affect renewables, but that in doing so they would compel renewable-source power generators to mitigate by “bundling” their output with traditional power sources, thereby “reduc[ing] generator and marketer flexibility,” which could raise prices across the board). 431. Id. 432. See supra notes 256-59. 433. See Nogee et al., supra note 3, at 27. 434. See Sawin, supra note 22, at 21-22. renewable energy.435 Once capitalized, the fund should be structured for invested like a state pension fund – housed in the executive branch and administered by a committee of representatives from existing federal agencies like FERC, the EPA, and the Department of Health and Human Services. Broadly defined funding priorities should be set by Congress, while specific project prerogatives could come through the constituent agencies and be voted on by the committee. Any revenue mechanism plan for the fund should include a Dirty Energy Tax on all fossil fuel energy merchants.436 Such a tax should increase at ever-increasing rates for power production that results in the emission of carbon dioxide, carbon monoxide, sulfur dioxide, nitrogen oxides, particulate matter, heavy metals, and volatile organic compounds. As for how the charge is levied, the first step is to place a fee on the actual poundage of emissions released.437 Just as a portfolio standard awards credits based on kilowatt-hour sales,438 this tax could be partially derived from a charge on per kilowatt-hour sales of dirty power, with a statutory limitation against passing the charge onto the customer. The Dirty Energy Tax revenue, specifically earmarked to do so, will provide regular income to the fund, like a commission, once recovered subsidy revenue is no longer sufficient. Unlike Social Security, there should be no borrowing against the national system benefits fund; yet, like state pension funds, its capital ought to be invested on the open market. Additionally, the proceeds of the fund ought to be treated in a manner similar to shareholder dividends— distributable to particular projects only when the fund as a whole meets prescribed equity requirements—to help ensure solvency over time. This is especially important if the national system benefits fund is to have a wider social mandate. As in state versions, the fund is intended to finance infrastructural modernization, supply-side incentives for renewables, and clean electricity generation projects. 439 A national fund, however, can have 435. See Bird & Swezey, supra note 21, at 7 (showing evidence for that mandate—a growing number of “green power customers” in regulated and competitive energy markets). 436. See Nogee et al., supra note 3, at 36. 437. See id. 438. See infra notes 472-75 and accompanying text. 439. See, e.g., L. Bird et al., supra note 106 (including California, id. at 8-9, Minnesota, id. at 18, Oregon, id. at 22, Pennsylvania, id. at 30, and New York, id. at 3334). the means to compensate the public for the externalities it has borne due to the market failure of pricing fossil fuel energy. Therefore, a portion of the fund’s available assets should be set aside for environmental clean up and conservation,440 and to pay a percentage of the heath care costs for those who have fallen ill as the result of unavoidable exposure to toxic emissions.441 In short, because of the pervasive consequences that energy use has on society, energy policy should at least match the scope and gravity of those effects. A fund of this magnitude and purpose can help facilitate such mandate. B. Bringing it All Together: The National Renewable Portfolio Standard Two-Tiered Plan There are essentially two ways of looking at the legislative and regulatory policies pertaining to renewable energy in general and wind energy in particular—the industry perspective442 and the social perspective.443 The two perspectives, while not mutually exclusive, do stem from wholly distinct motivations. An individual’s inclination toward one view, therefore, will tend to characterize their energy policy analysis.444 The industry perspective is concerned primarily with energy investors or potential energy investors looking at the policies affecting wind power with an eye for how the commercial viability of this product and this industry are influenced, both in the short-term and the longterm.445 Legislation that presents a clear roadmap to industry growth 440. Administered by the EPA. 441. See Schneider, supra note 1, at 8 (listing the adverse health consequences related to power plant pollution). Under this Note’s proposal, private claims would be adjudicated at the agency level in the mould of claims made under the Social Security Act, with the burden of proof and appeals process being the same. 442. See generally Caldwell, supra note 206 (illustrating the “wish list” the wind power industry has vis-à-vis governmental action). 443. See generally Schneider, supra note 1 (explaining how fossil fuel power plants are responsible for illness, death, incapacitation, deprivation of the labor force, et cetera). 444. See, e.g., id. at 12-15, 17, 22 (evaluating several pieces of proposed and enacted legislation on the basis of how effective they are at curbing fossil fuel power plant pollution with respect to health effects, and the monetization thereof, and aggregate pollutants capped). 445. See, e.g., Sawin, supra note 22 (discussing the economics of renewable energy markets and policies used both domestically and abroad to promote the renewable power industry). attracts capital, whereas no roadmap or an indiscernible, contradictory roadmap chases capital away.446 The social perspective is concerned mainly with environmental,447 health,448 and political issues.449 Questions about the externalities of fossil fuels,450 including wideranging topics like global warming,451 disease,452 and the international balance of power are all aspects of the social perspective.453 Legislation that promotes the renewable energy business is all well and good here, but only as a means to affecting an end.454 The RPS is a tool that can act directly on any or all of the following market entities: the power producer, retailer, or consumer.455 The aim is to promote renewable energy and thereby in a once-removed fashion enable the growth of the business of renewable power production while allowing for reductions in fossil fuel use and all that entails.456 If renewables become more prevalent, costs might go down, the renewables industry could take off, the environment might improve, or health concerns could dissipate, et cetera.457 In short, the RPS is a catchall remedy that is increasingly seen as an energy policy panacea.458 Given that nearly half the states have adopted some form of a portfolio standard, it is not surprising that speculation exists regarding the eventuality and design of a national RPS.459 The AWEA is one such organization seeking the enactment of a national RPS.460 Their proposal, not surprisingly, is perfectly suited for the long-term commercial health and growth of renewable power producers.461 Using the Clean Air Act’s sulfur dioxide regulation as a model,462 the AWEA sets forth a plan that, while light on specific figures, completely encapsulates the industry perspective in its underlying enforcement mechanism.463 If a national RPS is indeed on the horizon, a two-tiered approach that satisfactorily accounts for both the industry and social perspectives 455. See Rabe, supra note 195, at 5 (specifying that all RPSs to date act on energy suppliers—this Note proposes that an RPS can act on energy consumers as well if it is structured the right way). 456. See id. at 6. 457. See, e.g., id. (explaining that one of the “biggest factors” weighing in favor of a state’s passage of an RPS is the perception that doing so facilitates economic development); Successful Strategies, supra note 18 (asserting that with a 20% national RPS by 2020, carbon dioxide emissions would be halved from their currently projected levels); Envtl. Prot. Agency Combined Heat and Power P’ship, supra note 325 (listing the benefits afforded by an RPS as including: environmental improvement; energy security; lower natural gas prices; reduction in power price volatility; new jobs; and broader local tax bases). 458. See, e.g., Envtl. Prot. Agency Combined Heat and Power P’ship, supra note 325 (illustrating the wide scope of concerns potentially addressed by an RPS). 459. See Rabe, supra note 195, at 25-26. 460. See Am. Wind Energy Ass’n, Factsheet, National Renewable Portfolio Standard, available at 461. See RPS Overview, supra note 17 (emphasizing the “sustainability” of the renewable electricity industry that would be realized with the adoption of an RPS). 462. Id.; Nogee et al., supra note 3, at 25. 463. See RPS Overview, supra note 17; see also Pater, supra note 168, at 34. is warranted.464 The AWEA proposal falls short from an industry standpoint in that it fails to appropriately set the means by which the standard comes to fruition. It falls short from the social standpoint in that it fails to account for the likely concentration of the burdens of fossil fuels in specific geographic areas.465 An RPS—especially a national one—in addition to the fundamental structure of any quota466 must set bars that are realistically attainable but ambitious enough to change the energy industry in the desired way.467 To comprehensively meet the concerns of both perspectives, the national RPS approach will have to account for market forces,468 federalism,469 and hidden energy costs.470 If done correctly, a balance can be wrought between each of these. 464. This Note will use the terminology “two-tiered” to describe two distinct federally-mandated RPSs, one of which in effect is enforced against states. This language is not to be confused with the use of “two-tiered” discussed by other authorities. See, e.g., Rabe, supra note 343, at 26 (discussing the issues confronting federal and state collaboration in integrating one federal RPS with existing or future state models, calling the arrangement alternately a “two-tier” and, more accurately, a “multi-tier” RPS system). 465. See Schneider, supra note 1, at 14-15, 21. 466. See Rabe, supra note 195, at 5. While different from one another in their design, RPSs that currently exist (1) stipulate a percentage or an amount of electricity to supplied; (2) define what constitutes a “qualifying renewable electricity source;” and (3) “over time, increases the percentage or amount of capacity or generation that must be provided from renewable sources to meet the standard.” Id. 467. Cf. Sawin, supra note 22, at 15 (explaining that in quota systems, like the RPS, setting the target standard and the time in which it is to be achieved is crucial—that if the standard is too high, prices will rise “dramatically” and if it is too low, the desired economies of scale will fail to take root). 468. See van der Linden, supra note 180, at 47-48. 469. See Rabe, supra note 195, at 25-26 (explaining the difficulties of reconciling (a) the relationship between state policies; (b) the relationship between state and federal policies, in particular with regard to the Commerce Clause, U.S. CONST. art. I, § 8, cl. 3). 470. See, e.g. Beck & Martinot, supra note 23, at 3-5 (listing the following as “cost and pricing barriers”: “subsidies for competing fuels,” “high initial capital costs,” “difficulty of fuel price risk assessment,” “unfavorable power pricing rules,” “transaction costs,” and “environmental externalities”). C. The Industry Perspective RPS: A Business-Friendly Approach to Revolution (in the Electricity Marketplace) The Industry RPS must be managed as a federal regulatory scheme.471 Congress, after setting a production standard, would have to pass an enabling statute that allows an agency (likely the Federal Energy Regulatory Commission) to certify and administer “renewable energy credits.”472 These credits represent one kilowatt hour of electricity each, and for each power generator and distributor, the RPS determines how many credits they must hold at the end of each fiscal year.473 If the RPS for a given year is 10%, each power retailer must have renewable source energy account for 10% of their total kilowatt hour sales for the year. 474 The credits are proof of these sales.475 The credits would be tradable between industry actors as a parallel “commodity” to the electricity itself.476 The credits, while not per se indicative of sales, instead signify that renewable energy has been supported in the amount of one kilowatt hour per credit.477 Thus, a non-utility-owned wind farm (a power generator as opposed to a power retailer)478 in North Dakota that produces and sells only renewable energy would have 90% of that year’s credits to sell on the open market to power producers and distributors in any other part of the country that do not sell enough on their own.479 Credits would not be allowed to be carried over from year to year, and the market price would depend on how ambitious the annual increase in the RPS would be.480 In this way, every power retailer (like a utility) would have to determine whether it would be more expensive 471. See van der Linden et al., supra note 180, at 51 (asserting that a “strong . . . regulatory commitment” is needed for an RPS to be successful). 472. See Pater, supra note 168, at 36. 473. See RPS Overview, supra note 17. 474. See id. (using a 5% model); Nogee et al., supra note 3, at B-6. 475. See Beck & Martinot, supra note 23, at 9. 476. See RPS Overview, supra note 17; Nogee et al., supra note 3, at 25 (explaining that the credit “could take the form of a piece of paper, like currency,” and that “[i]t would list the number of kilowatt-hours, the year and state of origin, and the type of generation (solar, wind, etc.)”). 477. See Nogee et al., supra note 3, at 24-25. 478. See id. at B-6. 479. See id. at 25 (“Since renewable generation companies produce the power, they would be the original owners of the [credits].”). 480. See van der Linden, supra note 180, at 47. to produce their own renewable energy or directly subsidize the production of it elsewhere.481 Industry actors that fail to meet the standard would be subjected to steep fines that substantially outpace the fair market value of the energy credit, making the RPS effectively selfenforcing.482 Another advantage is that unlike direct government subsidies, no public funding is necessary.483 Furthermore, it is effective in both regulated and competitive wholesale energy markets.484 The overseeing agency would merely be required to certify the annual ownership of the credits themselves, administer penalties for noncompliance, and adjudicate disputes over credit transactions.485 The formula for setting fine rates would be set statutorily along with the RPS to avoid costly and time-consuming bureaucratic rule-making procedures. The AWEA also notes that in an energy credit-based RPS scheme, the market value of credits will ultimately determine when the standard “self-sunsets.”486 Once a credit becomes worthless, the RPS will have accomplished its goal for at least the year.487 To ensure longterm growth of the renewable energy industry, the RPS will have to start high enough, accelerate fast enough, over a long enough period of time to set off the diminishing rate of return for the credits.488 Special attention should be given to how the target for renewable electricity market share is set in establishing an implementation scheme.489 The congressional proposal of a 10% RPS by 2030 submitted to the EIA for analysis, selects the desired percentage market share figure as the alterable variable.490 While round numbers are easier to understand, the quadrennial leap of first 100% (2.5% to 5%), then 50% (5% to 7.5%), and finally 33% (7.5% to 10%) does not serve the renewables market well.491 The RPS should grow over time, but by 481. See Nogee et al., supra note 3, at 25. 482. See RPS Overview, supra note 17. 483. See id. 484. See Nogee et al., supra note 3, at B-6 to B-7. 485. See RPS Overview, supra note 17. 486. See id. 487. See id. 488. See Nogee et al., supra note 3, at B-3 to B-4. 489. Id. 490. See EIA, 10% RPS Analysis, supra note 100, at 10 (setting a 2.5% share in first four years renewable credits are mandated, increasing to 5% for the next four years, 7.5% for the next four years beyond that, and finally to 10% until the end of the initiative). 491. See Nogee et al., supra note 3, at B-3 to B-4. accelerating the standard this way, it does not provide the renewable electricity industry the chance to develop evenly over time.492 Rather, this Note asserts that arbitrarily addressing only the bottom-line mandate stresses the market. Instead the relevant variable should be renewable electricity’s annual growth rate in market share so as to ease the standard into the market. To be effective, the Industry RPS must give the regulated entities time to prepare sufficient business plans and strategies to either gather the assets needed to sell the requisite power outright or purchase the renewable energy credits on the market.493 The current market share of non-hydroelectric renewable electricity in terms of consumption is roughly 2.5%.494 According to the EIA’s latest projections, by 2010 that market share will be 3.95% which is where it is projected to stay with little fluctuation up to 2030.495 The goal of achieving a specified market share by a specified point in time is best met through an incrementally rising RPS.496 This Note proposes that Congress employ either of two methods, an Accelerated Growth Rate formula, or a market share compounded interest scheme. The Accelerated Growth Rate (“A.G.R.”) formula begins with the projected market share for renewables on a stipulated date, identifies an easy-to-meet initial target, and compounds that growth rate until the desired market share is reached. The simplest derivation is a constant A.G.R., wherein the factor by which the annual growth rate is multiplied stays the same throughout the life of the RPS. For illustration’s sake, a 50% constant A.G.R. RPS could begin January 1, 2010 with a base-line 492. Id. 493. Cf. id. at B-4. For the purposes of this discussion, qualifying electricity sources include wind, biomass (dedicated and cofiring plants), geothermal, solar-photovoltaic, solar-thermal, and municipal waste. See Annual Energy Outlook 2007, supra note 5, at 163. Additionally, preexisting renewables facilities will be eligible for inclusion into the national RPS scheme and receive whatever share of renewable energy credits to which they are entitled upon the implementation of the mandate. Id. 494. See Monthly Energy Review: March 2007, supra note 6, at 35. 495. See Annual Energy Outlook 2007, supra note 5, at 163. 496. See Nogee et al., supra note 3, at B-3 to B-4. The actual numbers and market share percentages chosen for this example are electric utility consumption numbers (based on thermal conversion figures) and not net generation numbers (kilowatt-hours) in order to avoid confusion about the certification of credits, which signify sales (also in kilowatt-hours). Id. In reality, the choice of which market share figures to use are up to legislative discretion as is the acceleration formula. Id. renewable market share of 3.95% in utility consumption.497 The alterable variable the annual growth rate—will begin at 0.01%, meaning that by December 31, 2010, all electricity retailers must have enough renewable energy credits to satisfy 3.96% RPS. The following year the 0.01% growth rate will increase by a factor of 50% to 0.015%, so that by December 31, 2011 the RPS would sit at 3.98% (rounding to the nearest hundredth). In 2012, the growth rate accelerates 50% to 0.023%, making the RPS 4.02%. By 2015 the RPS is 4.15%, still only a 4.5% increase over the EIA’s projections.498 By starting small and compounding the RPS’s annual rate of increase, the A.G.R. formula backloads the standard and assures the market that a sufficient quantity of renewable energy credits will be available in the beginning to achieve total industry compliance. By 2020, the growth rate would be 0.93%, leading to a seemingly modest 6.68% RPS, a mandate, but one that surpasses the expected 2020 market share by more than 69%. At this point, the acceleration begins to show results, registering RPSs of 8.08% in 2021, 10.18% in 2022, 13.33% in 2023, 18.06% in 2024, and 25.16% by December 31, 2025—a nearly 520% higher market share than projected. Setting a constant A.G.R. like 50% is the simplest method of implementing the standard with an eye for incremental progress while providing industry participants the chance to adapt over time to the new market. A more complex accelerated growth rate formula can be used to speed up or slow down the desired achievement of RPS milestones. For instance, if in using the same 3.95%-0.01% base in 2010, the initial rate increase is 100% for the first two years with lowering rate increases by a factor of 10% every two years (2013 and 2014 at 90% growth increase, 2015 and 2016 at 80%, etc.), the 2015 RPS would be 4.49%, increasing to 25.08% at 2022, roughly the same standard the 50% scheme reached, only three years earlier. The sun-setting of the RPS, designed to be a function of the market,499 kicks in at whatever percentage the statute sets as its ultimate goal for renewable market infiltration.500 If, for example, 25% were the figure Congress had chosen, in the 50% constant A.G.R. formula 497. See Annual Energy Outlook 2007, supra note 5, at 138, 163. 498. Id. at 163. The projections referenced are based on current and expected future consumption numbers as compiled by the Energy Information Administration. Id. 499. See Nogee et al., supra note 3, at B-5. 500. Obviously, if renewable-based electricity accounted for 100% of power production, the energy credits would be worthless, rendering the RPS moot. scenario, the acceleration would cease after 2025. In the staggered acceleration growth rate formula, 2022 would be the end date. At that point Congress could either elect to maintain that 25% as its final RPS, enact a more limited growth formula, or arbitrarily set a final standard number. Once the acceleration ends and Congress finalizes the standard, the end game of the Industry RPS begins. The other RPS structure that avoids the abrupt increases of the 2003 congressional proposal is one that mirrors any interest rate compounded annually.501 Using the initial market share as the principle (present value), long-term RPS goal as the future value, the period over which the compounding runs, and the rate of the annual increase, the market share compounded interest approach provides a considerably faster start than the A.G.R. formulae mentioned above, including a 7.28% RPS in 2015—between 60% and 70% higher than either of the two demonstrated A.G.R. scenarios. The drawback to this approach is that it does not provide the same slow start as the A.G.R. permutations, potentially exposing under-prepared retailers to heavy non-compliance penalties. By 2025, what began as a fast start for the interest compounding formula comes in at nearly 25% three years after the staggered A.G.R. approach and one year before the 50% constant A.G.R. The difference between the implementation schemes is one of strategy and simplicity. The compounding interest formula is more parsimonious, but the A.G.R formulae allow for a broad-based and conservative phase-in over at least the first seven years of the RPS with an option to ramp up the acceleration once the “getting-to-know-you” period is over. Either structural method, however, represents an improvement over the arbitrarily-rounded legislative targets of the 2003 proposal.502 D. The Social Perspective RPS: Because the World Does Need Saving Renewable energy is more than simply a business. For that reason, this Note proposes an end-user-oriented, demand-side Social RPS to go along with the industry version. Fossil fuels are responsible for millions 501. The formula is expressed as follows: RPS or Target Market Share = Current Market Share (1 + annual rate of increase)^Term. For this example, a 25% RPS over a 15-year term is expressed as: 25% = 3.95% (1+ r)^15; r = 0.13 in this case. 502. See EIA, 10% RPS Analysis, supra note 100, at 10 of dollars in health care costs,503 a host of environmental and economic catastrophes,504 and even national security vulnerabilities.505 The push for a renewable portfolio standard given this set of concerns necessarily requires a different mode of implementation from the business-centered standard. The Industry RPS, its tailored execution structure notwithstanding, simply uses energy credits as a means to act on those who sell power.506 The Social RPS makes use of renewable energy credits as well, but the relevant actors here are not utilities or independent power producers, but American states. Through the commodification of energy credits, even in a scheme that backloads implementation, power retailers that lack renewable assets will more often than those holding such assets choose to purchase credits on the market.507 The risk that the social costs of fossil fuel production will be increasingly concentrated in certain regions is significant.508 Given that renewable energy sources have geographic restraints, their production and distribution hubs will initially, in all likelihood, be sited at a greater distance from end-users than their larger-market-share fossil fuel competitors.509 503. See Schneider, supra note 1, at 22. 504. See generally IPCC Report, supra note 15 and accompanying text. 505. See Bush Speech Feb. 2006 , supra note 148 (speaking specifically of petroleum in this instance, the president declared America’s dependence on “unstable governments” for energy sources a “national security issue”). 506. See Nogee et al., supra note 3, at 24-25, B-4 to B-7. 507. See Pater, supra note 168, at 34. States with an RPS using renewable energy credits form what is called a “compliance market,” the value of which was approximated at $137 million in 2004, and is expected to rise to $608 million in 2010. Id. This level of growth proves the existence and durability of the market, signifying as a matter of course that these credits have buyers who are unwilling or unable to acquire their own renewable energy assets. Id. 508. See Schneider, supra note 1, at 14-15, 21. 509. See Nogee et al., supra note 3 (including: (1) solar power, whose utility-scale plants need 7.5 acres of mirrors for one megawatt, or one square mile for an 85 megawatt plant, id. at A-3, with deserts representing the viable siting option, id.; (2) wind power, which is concentrated in some of the least populated areas of the country, id. at A-4 to A-5; (3) biomass, which has no presence in the mountain west or west coast, id. at A-7; (4) geothermal, located mainly in California and Nevada, id. at A-8; and (5) hydro-power, which needs sufficient water flow and has significant regulatory restrictions, id. at A-9 to A-10); see also Rabe, supra note 195, at 23 (arguing that the biggest problem confronting Texas’s RPS is the need to construct more transmission capacity to move wind power electricity from its collection point to higher end-use population centers). The Industry RPS only acts on businesses, not individuals and not geographic entities.510 While the aggregate nation-wide market share of renewables would certainly increase under this standard, its positive social benefits like lower emissions are not evenly spread out either geographically or throughout the population.511 Therefore, the Social RPS will seek to accomplish the overall reduction of fossil fuel emissions across the board, not for the sake of the renewable energy industry, but for the sake of health of its people and environment. To do so, it will have to act on the states by mandating end-use consumption or purchase rates, rather than production or sales rates. While matters relating to the consumption of energy could constitutionally be justified as within the realm of the Commerce Clause,512 this Note finds that the most effective way to avoid legal challenge513 and ensure the successful reduction of fossil fuel externalities is to condition certain federal funding to the states on the timely compliance with the standard. Just as Congress conditioned a percentage of federal highway aid for each state on the raising of its drinking age to 21 during the 1980s,514 Congress would declare that it will release funding packages for highway, education, homeland security, and all other necessary state aid only upon the certification of the required number of renewable energy credits for that fiscal year. As with the Industry RPS, the Social version will be implemented using a rate-compounding formula to ensure that state legislatures have the opportunity to weigh their own options and adjust over time. 510. Cf. Nogee et al., supra note 3, at B-1. 511. See Sawin, supra note 22, at 17. An “argument against” a quota system like an RPS is that it would “[c]oncentrate development in areas with the best resources, causing possible opposition to projects and missing many of the benefits associated with renewable energy (jobs, economic development in rural areas, reductions in local pollution).” Id. (emphasis added). 512. See Federal Power Act, 16 U.S.C. § 824(a)-(b) (2007) (declaring the business of transmitting and selling electricity “for ultimate distribution to the public” to be “affected with the public interest,” and that the wholesale electricity market is under Congress’s interstate commerce regulatory authority). 513. Cf. 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, 578 (2004) (discussing the limits and role of the federal government in energy market regulation). 514. National Minimum Drinking Age, Pub. L. No. 98-363 § 6(a) (codified as amended at 23 U.S.C. § 15 8 (2007 )). Certainly, states could seek to carry the brunt of the purchasing and consumption requirement on themselves through mandating renewable energy use on government property.515 A state could choose instead to regulate municipal utilities,516 enact their own RPS if they haven’t done so already, or draft incentives for renewable energy producers to move to their state.517 In light of the disparate nature of states, their relative geographic advantages, and populations, the Social RPS would necessarily have to be a lower standard, enacted more slowly than its commercially-oriented counterpart. States which already have their own version of an RPS are not restricted in any way from enforcing it, as long as the state does not drop below the mandates consumption/ purchase floor set by the federal Social RPS.518 Like the Industry RPS, renewable energy credits would be tradable commodities under the Social tier, but in order to marginalize the trading so as not to defeat the purpose of ameliorating externalities, a substantial percentage surcharge akin to a sales tax will be added to the purchase price of each credit. A smaller surcharge will be added to the Industry RPS, and the proceeds of both surcharges will go into the national system benefits fund. The percentage of the fund’s non-investment revenue attributable to these surcharges should be earmarked to fund infrastructural projects like the “wind pipeline” that improve overall transmission access and energy efficiency so as to broaden the interconnectivity of the national power grid.519 In so doing, it will help control for output variations while directly encouraging the proliferation of renewable power.520 515. See, e.g., N.Y. Exec. Order No. 111 (2001) (requiring 20% of the energy purchases for a building owned, leased, or operated by a state agency come from renewable sources of energy by 2010). 516. See, e.g., Wash. Rev. Code § 19.29A.090 (2002) (requiring all utilities, including municipal and investor-owned utilities to provide an option to consumers to purchase electricity from “qualified alternative energy resources”). 517. See, e.g., Okla. Stat. tit. 68, § 2357.32B (2003) (enacting a per-square-footage tax credit for the new construction of wind turbines). 518. Cf. National Minimum Drinking Age, Pub. L. No. 98-363 § 6(a) (codified as amended at 23 U.S.C. § 15 8 (2007 )). 519. See Caldwell, supra note 206. 520. Id. CONCLUSION Current market trends indicate that the status quo of a fossil fuelbased electricity sector is expected to endure well into this century.521 While concerns about supply disruptions due to geopolitical worries are more prevalent in other energy sectors,522 the high external social and environmental costs attributable to coal and to a lesser extent natural gas523 have stimulated a national discussion.524 Despite the projections that at current rates renewable power will remain relegated to marginalplayer status,525 renewable energy investors have reason to be optimistic in light of the success of green marketing programs526 and nation-wide growth of state incentives.527 Also important is the fact that in the last thirty years, awareness of global climate change,528 the health effects of exposure to pollution,529 and the devastating effect toxic emissions have on the natural world530 has become more acute.531 Correspondingly, Congress and many states use the power of the purse to influence the direction and trajectory of renewable energy progress.532 On the federal level, tax incentives, research grants, and low-interest loan programs are aimed at stimulating investment in renewable energy industries.533 States began implementing their own policies as well to encourage renewable energy businesses to set up shop within their borders.534 However, as policy turned to progress for renewables, the government was still financing the polluters,535 whose costs decreased through the 521. See Annual Energy Outlook 2007, supra note 5, at 14. 522. Cf. id. at 70 (discussing how geopolitical instability restricts petroleum supply, a major energy source for the transportation sector in particular). 523. See Cherry & Shogren, supra note 29, at 9. 524. See Bush Speech Feb. 2006 , supra note 148. 525. See Annual Energy Outlook 2007, supra note 5, at 14. 526. See Blair & Swezey, supra note 21, at 5. 527. See DSIRE Website, supra note 20. 528. See IPCC Report, supra note 15 and accompanying text. 529. See Schneider, supra note 1. 530. See IPCC Report, supra note 15 and accompanying text. 531. See Policies to Promote Renewables, supra note 32, at 4. 532. See supra notes 217-332. 533. See Beck & Martinot, supra note 23, at 10 (classifying such programs as “costreduction policies” whose purpose was to provide incentives for private investment). 534. Id. 535. See Sawin, supra note 22, at 21-22. 1980s and 1990s,536 programs.537 rendering ineffectual certain pro-renewables Of all the alternative energy sources, perhaps the slowest start was had by wind.538 Hydro power had waterfalls and dams,539 solar power and geothermal had immediate sources of funding,540 and biomass could be mixed with coal and still be considered in the same league as the other “green” sources.541 Nonetheless, through government-sponsored technological development,542 and incentivization policies, wind power grew faster than any of its peers.543 Innovations in turbine design544 coupled with favorable local and national policies545 should have this industry gaining market share as long as its production tax credit stays in effect.546 Furthermore, enormous growth in Europe mixed with enormous potential in the United States indicates that wind energy is coming of age. 547 With a viable market548 and a history of reacting well to government initiative,549 the wind power industry is on the rise,550 but like all renewables,551 has obstacles to overcome.552 Transmission costs and output variability can all be accounted for with common sense regulation, infrastructural improvements, and fair access rules,553 but private investment is the real key to ensuring long-term growth for renewable power industries.554 So too is the need to reduce or eliminate fossil fuel subsidies555 and demand that social costs be accounted for.556 Indeed, this is an opportunity to win both private wealth and public health. If the need to craft energy legislation is indeed analogous to war,557 then a national campaign must be undertaken using markets as a battle plan, laws as weapons, and investors as soldiers. The barriers addressed in this Note can be marginalized through a comprehensive energy policy on the federal level, including a system benefits fund and two-tiered renewable portfolio standard.558 Furthermore, long-term commitments to supply-side policies like tax credits and capital assistance programs are necessary to ensure the successful cleansing of the American energy industry.559 In the energy war, wind power is a battlefield where ground has been gained. When a breeze from the direction of a power plant no longer carries toxins, but the promise of clean electricity, victory is in the offing. II. HOW WIND POWER IS TAKING OVER THE WORLD .......................... 1023 A. Wind InvestmenT ............................................................... 1028 B. “Demanding” Wind Power: A Market Analysis................. 1030 III: A BRIEF HISTORY OF RENEWABLE ELECTRICITY LEGISLATION ..... 1037 A. Supply-Side Electricity Production Policy ......................... 1039 B. Demand-Side Renewable Electricity Policy ....................... 1048 VARIABILITY , AND GRID INTEGRATION..................................... 1053 A. The Challenges and Some Possible Solutions .................... 1053 B. Wind versus Utilities?......................................................... 1057 CENTURY.................................................................................. 1058 A. The System Benefits Fund.................................................. 1061 B. Bringing it All Together...................................................... 1063 C. The Industry Perspective RPS............................................. 1067 D. The Social Perspective RPS................................................ 1071 1 . See Conrad G. Schneider, Clean Air Task Force, Dirty Air, Dirty Power: Mortality and Health Damage Due to Air Pollution from Power Plants 7 - 15 , June 2004 (citing Abt Associates , Inc., infra note 8). 2. See Western Hemisphere Energy Security: Testimony Before Comm. on Int'l Relations Subcomm . on the W. Hemisphere (Mar. 6 , 2006 ) (statement of Karen A . of Energy, Energy Policy Act of 2005: Section 1837 : National Security Review of International Energy Requirement , 34 - 35 (Feb. 2006 ) [hereinafter U.S. Dep't of Energy , National Security Review]. 3 . See Alan Nogee et al., Powerful Solutions: 7 Ways to Switch America to Renewable Energy , at 4 (Jan. 1999 ). 4. See id . at 7 . 5. See Energy Info . Admin., Annual Energy Outlook 2007 : With Projections to 2030, at 138, DOE/EIA-0383( 2007 ) (Feb . 2007 ) [hereinafter Annual Energy Outlook 2007]. 6 . Energy Info . Admin., Monthly Energy Review: March 2007 , DOE/EIA- 0035 ( 2007 /03), at 25 (Mar. 2007 ) [hereinafter Monthly Energy Review : March 2007 ]. independent power producers . Id. at 176 . This is distinguished from so-called “end- use” sectors of the economy: residential, commercial, industrial, and transportation . Id. 7 . See U.S. Dep't of Energy, National Transmission Grid Study 4 (May 2002 ) [hereinafter U.S. Dep't of Energy Grid Study]. 8 . See Abt Associates, Inc., The Particulate-Related Health Benefits of Reducing Power Plant Emissions , 6 -3 to 6-4 (Oct. 2000 ), available at fact/mortality/mortalityabt.pdf; see also Schneider, supra note 1 , at 22 (listing the projected health costs and benefits under several proposals facing Congress). 9 . See Schneider , supra note 1 , at 22. 10. Id. at 12 (citing findings that over three million work days every year are lost because of the impact of power plants in the United States) . 11 . See U.S. Dep 't of Energy Grid Study, supra note 7, at 5-6 (noting that transmission bottlenecks increase electricity costs) . 12 . See id. at 3 (explaining how the electricity transmission system was developed piecemeal over 100 years by vertically integrated utilities in geographically diverse areas) . 13. See Annual Energy Outlook 2007 , supra note 5, at 5-6. 14 . See Abt Associates, Inc., supra note 8 , at 6-3 to 6-4. 15 . See generally Intergovernmental Panel on Climate Change, Climate Change 2001: Impacts, Adaptation, and Vulnerability ( 2001 ), available at climate/ipcc_tar/wg2/index.htm [hereinafter IPCC Report] (arguing that fossil fuels massive public and private insurance risks) . 16 . See David Storobin, American Economic Policy from 1920's to 1990's , Global Politician (online magazine) , May 9 , 2005 , articleshow.asp?ID=700&cid=1&sid=45 (providing a historical overview of supply- side economics) . 17 . See Am . Wind Energy Ass'n, The Renewables Portfolio Standard: How It Works and Why It's Needed (Oct. 2005 ), available at oversight of a renewable portfolio standard is minimal ). 18 . See Union of Concerned Scientists, Successful Strategies: Renewable Energy Standards (Mar . 2007 ), available at _energy/Climate-Solutions-RES-12-06-Update.pdf [hereinafter Successful Strategies]. 19. See infra notes 442-520 . 20 . See Successful Strategies, supra note 18; Database of State Incentives for various state-offered tax incentives, rebates, grants , and loans) . 21 . See Lori Bird & Blair Swezey, Green Power Marketing in the United States: A Status Report (Ninth Edition) , NREL/TP-640-40904 , at 26 (Nov. 2006 ) (analyzing the Am. Wind Energy Ass'n , Windpower Outlook 2006 , available at 2006 .pdf [hereinafter Wind Outlook 2006 ] (citing a Yale public opinion poll that found that 86% of Americans favor increased funding for renewable energy) . 22 . Janet L. Sawin , Worldwatch Inst., National Policy Instruments: Policy Lessons 18 ( Jan . 2004 ). 23 . See Fred Beck & Eric Martinot, Renewable Energy Policies and Barriers , in Encyclopedia of Energy (Cutler J . Cleveland ed., 2004 ), available at pdf (manuscript at 10-13). 24. See Renewable Energy Prod. Incentive , 42 U.S.C. § 13317 ( 2005 ). 25 . See Beck & Martinot, supra note 23, at 22 ( listing subsidies, rebates, and net renewable energy during the 1990s and 2000s) . 26 . Cf . Paul Gipe, Renewable Energy Policy Mechanisms 12 ( Feb . 17, 2006 ), investment” and tax incentives] are never a sufficient support mechanism . ”). 27. See infra notes 88-93 . 28 . See Energy Info . Admin., Annual Coal Report 2005 , DOE/EIA-0584( 2005 ), at 8 (Oct. 2006 ) ; see also Monthly Energy Review: March 2007 , supra note 6, at 100 renewable energy sources) . 29 . See generally Todd L. Cherry & Jason F. Shogren , The Social Cost of Coal: A Working Paper Series , Sept. 30 , 2002 ) (discussing the social costs, or “externalities,” of coal-based electricity) . 30. See infra notes 102-212 . 31 . See Int'l Energy Agency , Long Term Research and Development Needs for Wind Energy for the TimeFrame 2000 to 2020 , at 2-4 ( Oct . 2 , 2001 ) [hereinafter Wind Energy R &D]. 32 . See Energy Info . Admin., Policies to Promote Non-hydro Renewable Energy in the United States and Selected Countries 8 ( Feb . 2005 ) [hereinafter Policies to Promote Renewables]; Ari Reeves, Wind Energy for Electric Power: A REPP Issue Brief 20-22 (Fredric Beck ed., Renewable Energy Policy Project July 2003 ). 33 . See Ryan Wisner & Edward Kahn , Energy & Env't Div ., Lawrence Berkeley Costs 19-21 (May 1996 ). 34. See infra notes 165-206 . 35 . See generally Gipe, supra note 26 (addressing supply-side policy theory) . 36. See Beck & Martinot, supra note 23, at 5. 37. Id. at 4-5 . 38 . See Int'l Energy Agency , Variability of Wind Power and Other Renewables: Management Options and Strategies 27 ( June 2005 ) [hereinafter Variability of Wind Power]. 39. See Beck & Martinot, supra note 23, at 6 . 40. See U.S. Dep 't of Energy Grid Study , supra note 7, at 5. 41. See infra notes 365-90. 42. See infra notes 404-520. 43. See Annual Energy Outlook 2007 , supra note 5, at 7 (graphing projected energy renewables consumption comprise only a small fraction) . 44. See id. 45. See id. at 14. 46. See Monthly Energy Review: March 2007 , supra note 6, at 35. 47. Id. 48. Id. 49. Id. 50. See Annual Energy Outlook 2007 , supra note 5, at 14. 51. See Monthly Energy Review: March 2007 , supra note 6, at 35. 52. See Beck & Martinot, supra note 23, at 4-5. 53. See id. at 4 . 54. Cf. H. Sterling Burnett , Nat'l Ctr. for Policy Analysis , Wind Power: Red Not Green 1-2 ( Feb . 23, 2004 ) (arguing that the tax credits and accelerated depreciation given wind power show that wind is not yet competitive with traditional fuel sources). 55. See generally Energy Info . Admin., Renewable Energy Trends 2004 (Aug. 59. See Monthly Energy Review: March 2007 , supra note 6, at 135. 60. Id . Petroleum is broken into three subcategories, residential fuel oil ($8 .02/mmBtu),distillate fuel oil ($ 12 .98/mmBtu), and petroleum coke ($1 .29/mmBtu). Id . This accounts for less than 1% of coal's consumption . Id. at 104 . Natural gas costs $6 .89 per mmBtu, up from $1.98 in 1995. Id. at 135 . 61. See id. at 135. Coal's cost per mmBtu in 1996 was $1.29, and was as low as $1.20 per mmBtu in 2000-representing an increase of about 32% since the mid-1990s, and 42% since the millennial turn . See id. 62. Annual Energy Outlook 2007 , supra note 5, at 174. Using 2005 dollars, this actually place the price $0.01 per mmBtu lower than at present . See id. 63 . Richard Bonskowski & William D. Watson , Energy Info . Admin., Coal Production in the United States-An Historical Overview 1 (Oct . 2006 ), available at pdf. 64 . Cf. id. (“ The 1973 Oil Embargo renewed interest in the vast U.S. coal reserves, as the nation strived to achieve energy independence . ”) (emphasis added) . 65 . See John Carlin, Energy Info. Admin., Environmental Externalities in Electric Power Markets: Acid Rain , Urban Ozone, and Climate Change xi ( 1995 ), available at; see also Schneider, supra note 1 (highlighting the impact of pollution on health and mortality ). 66. Annual Energy Outlook 2007 , supra note 5, at 14. 78. See Schneider, supra note 1, at 16. 79. Id. 80. Id. 81. Id. 82. Id. 83. Id. 84. Id . 85 . See Gene Weinberg et al., A Case-Control Study of Stomach Cancer in a Coal Mining Region of Pennsylvania, 56 Cancer 703 , 703 ( 1985 ). 86 . See Steve Brown , Study Links Power Plant Mercury Emissions to Autism, Education Daily , Mar., 24 , 2005 , at 3. 87. See Xiaorong Wang et al., Respiratory Symptoms and Pulmonary Function in Coal Miners: Looking Into the Effects of Simple Pneumoconiosis , 35 Am. J. Indus. Med . 124 , 124 ( 1999 ). 88 . See IPCC Report, supra note 15 , at ch. 5 (pp. 235 - 343 ); Reeves, supra note 32, at 15-17; Nogee et al., supra note 3, at 4-7 . 89 . Cherry & Shogren, supra note 29, at 8 (citing Darwin C. Hall, Preliminary Issues Vol. VIII , No. 3 , 283 - 307 ( July1990 )). 90 . Cherry & Shogren, supra note 29, at 9. 91. Id . (noting that these figures are “rough estimates” ). 92 . Id. at 10 (citing W. Kip Viscusi et al., Environmentally Responsible Energy Pricing ,15 ENERGY J. 23 ( April 1994 ). 93 . Cherry & Shogren, supra note 29, at 10. 94. See Schneider supra note 1 , at 12- 25 . 95 . See Cherry & Shogren, supra note 29, at 6 (“ By altering the underlying Sawin , supra note 22, at 22 ( “In most cases, it is less a matter of finding new money to conventional energy to renewables .”). 96 . See , e.g., Reeves, supra note 32 , at 18 ( explaining how wind power producers generation market”); see also Nogee et al ., supra note 3 , at A -1 to A- 10 (evaluating the particular concerns facing various renewable energy sources ). 97 . See Bonskowski & Watson, supra note 63. As the demand for electricity has grown, coal production has risen to meet it . Id. at 2 . Productivity has increased on average 4% every year since 1973 . Id. at 7; cf. Variability of Wind Power, supra note 38, at 9 (noting that all sources of energy derive from nature and thus “vary in their 146. See Am . Wind Energy Ass'n Jan . 23 , 2007 News Release, supra note 142 . 147. See Wind Energy R &D, supra note 31, at 2-4. 148 . See George W. Bush, “President Discusses Advanced Energy initiative In Milwaukee ,” Office of the Press Secretary, Feb. 20 , 2006 , available at, 1 .html [hereinafter Bush Speech Feb . 2006 ] (arguing that to “encourage conservation and new technologies (illustrating power industry) . 149 . See Worldwatch Institute & Center for American Progress, American Energy: A Renewable Path to Energy Security, at 12, Sept . 2006 , available at, 150. Id. at 11 . 151. See AWEA , Wind Economics , supra note 138 . 152. Id . 153 . See Wisner & Kahn, supra note 33, at 19- 31 . 154 . Am . Wind Energy Ass'n, Comparative Cost of Wind and Other Energy 401. Id . 402 . Id. at 14 403. Id. 404 . See Pater, supra note 168 , at vi. 405. See Steven Clemmer et al. Union of Concerned Scientists , Clean Energy Blueprint , at ix-x ( 2001 ). 406 . See Wind Power is a Disruptive Technology that Promotes Positive Change, Energy Economist , Oct. 2006 , at 10 [hereinafter Disruptive Technology] (explaining how “credit lapses in the past have caused market havoc” ). 407 . Id . 408 . See Caldwell, supra note 206 (referencing the blows sustained by the industry facilities worth a total of $3 billion after the 2001 expiration and asserting that the PTC community”) . 409 . See Disruptive Technology, supra note 406 (“When Congress let the credit expire in 2004, wind development slumped, with fewer than 500 [megawatts] of new projects installed. But when the credit was re-instated for 2005, the country added a [then] record 2 ,400 [megawatts] of wind energy .”) 410. See Disruptive Technology, supra note 406. 411. The Tax Relief and Health Care Act of 2006 , H.R. 6111 , 109th Cong. § 207 ( 2006 ) (extending the expiration of the PTC to Dec . 31 , 2008 ). 412 . See Disruptive Technology, supra note 406 . 413. See Am. Wind Energy Ass'n , Wind Energy and U.S. Energy Subsidies , Jan. 2007, available at [hereinafter Wind secure more permanent investment) . 414 . See Burnett, supra note 54 (asserting, as a negative, that the wind power competitive) . 415 . See Wind Energy and U.S. Energy Subsidies, supra note 413 (arguing that the energy industry , is to remain viable) . 416. See Public Citizen EPAct 2005 Analysis, supra note 224 and accompanying text; see also Reeves, supra note 32, at 21 (arguing that “because the human health and 446. See id. at 26-27 . 447 . See Schneider, supra note 1, at 17. 448. Id. at 13 . 449. See , e.g., Western Hemisphere Energy Security: Testimony Before Comm. on Int'l Relations Subcomm . on the W. Hemisphere (Mar. 6 , 2006 ) (statement of Karen A . 0 . HTM (stating of Energy, National Security Review, supra note 2 , at 34-35 (discussing the relevance of specifically relating to China). 450 . See Schneider, supra note 1 at 12-15 , 17 , 22 and accompanying text (analyzing monetization thereof, and aggregate pollutants capped) . 451 . See Pater, supra note 168 , at 19-20 (discussing the benefits to a company that reduces its contribution to climate change). 452. See Schneider, supra note 1, at 8 (illustrating the significant health effects attributed to fossil fuel power plant pollution ). 453 . See , e.g., U.S. Dep't of Energy, National Security Review, supra note 2 environmental, economic, and security concerns) . 454 . See , e.g., Successful Strategies, supra note 18 . The first line reads: “In order to Cf . Rabe, supra note 195, at 6 (stating that in the motivation for developing an RPS,

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Corey Stephen Shoock J.D.. Blowing in the Wind: How a Two-Tiered National Renewable Portfolio Standard, A System Benefits Fund, and Other Programs Will Reshape American Energy Investment and Reduce Fossil Fuel Externalities, Fordham Journal of Corporate & Financial Law, 2018,