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Late last week, Senator Bingaman (D-N.M.), Chairman of the Senate Energy and Natural Resources Committee, released The Clean Energy Standard Act of 2012 , legislation to promote energy generation from a diverse set of low-carbon energy sources by establishing a Clean Energy Standard (CES).  A CES is a flexible, market-oriented standard that would set targets for clean electricity generation.  The CES seeks to ensure that clean energy would be produced where it makes the most economic sense and without favoring one clean energy source over another.  A detailed description of the key elements of the legislation is set forth below.

A growing number of NACWA’s member utilities are generating energy from the biogas and biosolids produced during the wastewater treatment process.  Instead of purchasing their energy entirely from outside sources, these facilities are able to generate some or all of their own clean energy.  NACWA has been working to have the biogas and biosolids produced during the municipal wastewater treatment process credited under a CES for some time now.  This approach would allow wastewater treatment plants that generate clean energy from these sources to be eligible to receive potentially valuable clean energy credits.  In 2009, NACWA worked closely with the offices of Senators Stabenow (D-Mi.) and Wyden (D-Ore.), both members of the Senate Energy and Natural Resources Committee, to gain their support for an amendment including biogas and biosolids as eligible in a previous CES bill, The American Clean Energy Leadership Act of 2009.  This amendment made it through the committee on a voice vote but was the legislation never made it to the Senate floor.

The latest CES bill does include energy produced from biogas, including biogas produced as part of the municipal wastewater treatment process, making it eligible for clean energy credits.  However, energy produced using biosolids as a separate feedstock, for example as a supplement to cement kilns, was not included and NACWA’s efforts going forward on this issue will revolve around making sure it is added.  NACWA has already met with Senator Stabenow’s office and she has again pledged her support for this.  A meeting with Senator Wyden’s office will take place soon and we anticipate his continued support as well.  Members will be apprised of any updates on this bill as they occur.

Senator Bingaman himself acknowledged that it may be difficult to move this legislation through Congress during this election year.  Still, having energy from biogas and biosolids included as clean energy in this bill would set a precedent for future clean energy legislation as well as provide some momentum to wastewater treatment utilities that are advancing clean energy production projects.  NACWA’s commitment to this issue coincides with work the Association is doing on its ‘2020 Vision for the Water Resources Utility of the Future,’ which looks at the transformational shift in how public clean water agencies are managing their systems and becoming energy recovery agencies in addition to complying with the requirements of the Clean Water Act (CWA).

NACWA’s 2020 Vision for the Future will be a central topic of discussion at our 2012 National Environmental Policy Forum, held April 22 — 25 in Washington, D.C.  At the Forum, members will consider whether the 40-year-old CWA is flexible enough to account for the multi-faceted and complex roles utilities are now playing within their communities as population expands, weather patterns shift, resources grow increasingly scarce and energy independence becomes a top policy priority.

The following breakdown of Senator Bingaman’s proposed clean energy market provides a brief description of the market’s baseline and architecture.  NACWA encourages members to weigh in with their thoughts on this legislation and how it might benefit your utility or changes you would recommend to the bill.  Please send any comments to Hannah Mellman at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

The Clean Energy Market

Senator Bingaman’s Clean Energy Standard Act of 2012 would establish a market-oriented standard for clean electric energy generation.  The proposal is as follows:

Target:  Beginning in 2015, large utilities who sell more than two million MWh of electricity would be required to obtain 24% of the electricity they sell from clean energy sources.  That percentage would increase by 3% percent each year, gradually ramping up to 84% by 2035.

Clean Energy Classification:  According to this legislation, the following types of electricity constitute clean energy:

• Electricity generated at a facility placed in service after 1991 using renewable energy, qualified renewable biomass, natural gas, hydropower, nuclear power, or qualified waste-to-energy*;
• Electricity generated at a facility placed in service after enactment that uses heat-to-power, generates electricity with a carbon intensity lower than 0.82 metric tons per MWh, or as a result of qualified efficiency improvements;
• Electricity generated at a facility that captures and stores its carbon dioxide emissions.

*Qualified waste to energy includes the combustion of biogas generated in the municipal wastewater treatment process.

Compliance:  In order for a utility to demonstrate compliance with the CES, it must a) submit the appropriate number of clean energy credits; b) make alternative compliance payments (ACP) of 3 cents per KW/h for every KW/h it lacks in credits; or c) a combination of both.

A wastewater treatment facility that generates biogas will receive one credit for each MWh of energy it produces.

Market Participation: The Clean Energy Market is not limited to those entities under compliance.  Any electricity generator, large or small, may be issued clean energy credits if they can generate verified ‘clean energy’ as defined above.  These credits may be used for individual compliance, traded, sold to other utilities that need the additional credits to meet their compliance obligation, or sold to interested participants who may hope to profit off the resale of the credits at a higher price.  Credits may be banked for up to two years at which point unused credits would expire.  A central federal authority would administer the market, clear all transactions and ensure proper tracking and reporting of relevant information

Credit Price: There is no minimum or maximum price for credits sold on the market.  Based on the fact that the ACP is 3 cents per KW/h and there is no limit to how many ACPs a utility can purchase, we can assume the market price for a credit will be less than 3 cents.

Holding Limits:  There is no limit on the number of credits an entity can buy, sell, bank, or trade.

Again, NACWA encourages members to weigh in with their thoughts on this legislation and how it might benefit your utility or changes you would recommend to the bill.  Please send any comments to Hannah Mellman at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .