Cantwell, Senators Introduce Bipartisan Renewable Electricity Standard Bill

Stand-alone bill includes Cantwell-authored loan fund which will make renewable energy projects significantly more cost-effective

WASHINGTON, DC – Today, U.S. Senator Maria Cantwell (D-WA) joined Senators Jeff Bingaman (D-NM) and Sam Brownback (R-KS) and a number of other Senators in introducing the Renewable Electricity Promotion Act of 2010 to gradually increase the amount of renewable energy produced in America.  The measure would require that 15 percent of the electricity generated in the U.S. be derived from renewable sources by 2021, although 26.67% percent of that requirement can by met with energy efficiency measures.  Included in the bill is a Cantwell-authored provision establishing a federal loan fund that will greatly improve access to low-cost credit making it much easier and less expensive to build clean energy projects. 
“This bill aims to diversify our energy sources, protect our environment, and lower utility bills – all while jumpstarting much needed job creation,” Senator Cantwell said.  “While I believe we can and should wean ourselves off fossil fuels more quickly, this bill went through the committee process with bipartisan support, and has a good chance at becoming law before the end of the year.” 
Cantwell’s RES Loan Fund authorizes the Department of Energy to provide long-term, very low interest loans to any qualifying project undertaken to meet a federal renewable energy standard.  This low-interest loan program will be an essential financial catalyst for utilities nationwide, most of which will meet their RES obligations by constructing renewable energy generation facilities, or through the programs that spur the installation of energy efficiency and electricity demand reduction technologies.
“The low interest rates and long repayment schedules provided by the RES Loan Fund will turbo-charge our transition to a clean energy economy by reducing the cost of financing renewable generation projects and passing the savings down to ratepayers at virtually no cost to taxpayers,” Senator Cantwell said.
The RES Loan Fund would offer federal government loans for any project built to meet the federal RES at 50 basis points above the federal funds rate (currently at about 0.25%) and allow for repayment schedules of up to 30 years.  With such low interest rates and long repayment schedules, most renewable energy projects will become significantly more cost-effective at little or no cost to taxpayers.  Energy efficiency projects in particular are likely to achieve rapid cost savings that exceed the value of monthly loan repayment requirements.  Moreover, the nature of RES compliance projects, such as construction of a wind farm or cost savings from an energy efficiency investment, provides for an almost certain revenue stream throughout the life of the loan, meaning there is very little risk of a loan recipient being unable to repay the U.S. Treasury.
The Renewable Electricity Promotion Act of 2010 does not prevent states from setting their own higher standards.  Therefore, states like Washington which have more aggressive renewable generation requirements would not be impacted by this federal proposal.