Clean electricity standards and their role in helping the United States achieve a low-carbon economy has been a topic of much discussion lately in Congress. But understanding how these standards work and how they fit into congressional efforts to pass a climate bill can be difficult. Here are some important things to know:
What is a clean electricity standard?
According to the Environmental Protection Agency (EPA), 25% of all greenhouse gas emissions in the U.S. come from electricity generation. Reducing fossil fuel use in this sector is critical. The goal of a clean electricity standard (CES) is to replace electricity produced with fossil fuels with electricity generated from low carbon sources. In general, it does so by mandating that a certain percentage of electricity be generated from zero or low-carbon sources. Depending on how a CES is structured, it can also be “technology neutral” to accommodate nuclear or natural gas fitted with carbon capture and storage technology. By requiring utilities to increase the amount of zero or low carbon energy they source, a CES helps shift electricity generation away from fossil fuel-based sources.
What is the path forward for CES?
Currently twenty-nine states and the District of Columbia us a type of clean electricity standard. While the details vary, these state level clean electricity standards all share the goal of replacing electricity generated from fossil fuels with zero or low-emission electricity from renewables and other sources.
In its American Jobs Plan, the Biden Administration proposed a CES requiring 80% of electric power come from carbon-free sources by 2030. Democrats are considering including a CES in the $3.5 trillion budget reconciliation under consideration by the Senate. The CES proposed there—referred to as clean energy performance payments—would operate as described above, but it would replace regulatory mandates with direct payments by the government to utilities to incentivize their use of clean energy. This approach gives the proposal a better chance of surviving the budget reconciliation process congressional Democrats are using to pass climate legislation.
What will a CES do for the climate?
By incentivizing the use of low carbon energy sources in electricity generation, a CES will lead to better air quality and improved health outcomes. A recent study by Harvard and Syracuse University found that the significant reductions in fine particulate matter (PM2.5) and ozone (O3) as a consequence of using a CES can help to reduce the premature deaths, asthma, and other respiratory illnesses that exacerbated by our fossil fuel use.
Clean electricity performance payments also align well with a future price on carbon, which would further incentivize the use of low and zero-carbon sources of electricity.
Next Steps
Congress is only at the beginning of what is likely to be a long road to passing effective climate legislation that places the United States firmly on the path to a low-carbon economy. As Congress considers major climate initiatives, it’s important they hear from you on the need to include Clean Electricity Performance Payments in any final legislative package.
