Marybeth Phillis

Energy Policy Options for Wyoming

Introduction

 

            The use of fossil fuel energy has created vast environmental and societal issues, which has led to the questioning of the sustainability of our energy choices and usage. The noticeable detrimental effects of fossil fuels, combined with the development of renewable energy technologies, is leading our society to begin to examine our current energy policies, and to propose new energy policies that promote values which respect environmental and societal health.

            The energy portfolio in Wyoming is comprised mainly of fossil fuel energy. In 1997, the state consumed 466.5 trillion BTUs of coal, 107.9 trillion BTUs of natural gas, 149.0 trillion BTUs of petroleum, and only 14.2 trillion BTUs of the semi-renewable hydropower (www.eia.doe.gov/emeu/sep/wy/frame.html). Wyoming has the potential to utilize renewable technologies such as wind power, geo-thermal energy, solar thermal energy, photovoltaics, small-scale hydro-power, and biomass resources. An energy policy must be created in Wyoming that will spur change in the behavior of the people who live and work there, and will create an equal opportunity of representation of renewable energies in the energy portfolio.

Energy Policy Options

Financial Incentives

Subsidies

            The fossil fuel industry has been heavily subsidized since its creation. The issue has been raised as to whether subsidies are the way to approach supporting an energy technology.  If the answer is yes or no, the fact still remains that it requires a great deal of money to establish an energy technology, and few have reached maturity without substantial public investment (Goldberg 2000). Subsidies are designed to enable or to encourage the development of a particular technology through expenditures by federal agencies for R&D, and preferential actions taken by government such as production and investment tax credits and insurance premium savings (Goldberg 2000). Subsidies are created to ensure the maturity of a technology, but can outlive their purpose and end up acting against public interest.  Subsidies must be created with environmental impacts and intended purposes kept in mind.

Tax Policies

            Wyoming can implement tax policies that will promote the use of renewable energy technologies by giving a tax break for those investing in the systems. This will serve to diversify the energy portfolio in the state by rewarding residential, commercial, or industrial investment in renewable technology. Tax credits can be offered on solar equipment, geothermal systems, wind projects, fuel cells, energy efficient appliances and lighting systems, energy efficient building in new homes, hybrid or electric cars, and any other technology that promotes a responsible attitude toward energy use and energy sources.

Low-Interest Loans and Grants

            Tax credits can benefit people who have the initial capital to invest in renewable energy technologies, but aren’t very useful for people with not much money for the initial investment. Low-interest loans and grants can be implemented to help people invest in renewable energy systems for their homes or businesses, and for people or institutions who are trying to conduct research on renewable energy technologies. Placing a requirement for the reduction in energy use and increased efficiency in order to receive the loans or grants will serve to promote energy savings as well as alternative energy sources.

Regulations

Renewable Portfolio Standard

            The renewable portfolio standard (RPS) serves to diversify a state’s energy sources and promotes a market for the still young renewable energy industry. RPS requires that any company selling electricity on the competitive market provide a certain amount of renewable energies in their portfolio, thus creating a place in the market for renewable energy. Wyoming should implement a standard of .5% increase for the first five years of the program, increasing to 1% for the subsequent 5 years after, and progressively increase the required percentage as the market for renewables grows and becomes an accepted source of energy in the American market. Wyoming should impose penalties for those companies that do not meet the demand for renewable energy provided, however, companies who produce more than the required amount may sell their extra percentage to companies who were unable to meet the requirement. The penalties should be enough that they deter companies from disregarding the requirement, but should not be so rigid that renewable energies are seen as a hindrance to company development.

Disclosure and Certification of Renewable Energies

            In order to create a uniformity amongst energy providers, standards must be set as to which energy sources may be labeled as renewable. Wyoming should also require its energy providers to state how much renewable energy they produce or sell, and the impact of each individual energy source on the environment, at least in terms of emissions. This regulation would enable customers to see which companies provide renewable energies, and because of regulations imposed on what energies can be labeled as renewable, customers can confidently purchase renewable energy from a decided company.

Systems Benefit Charge

            The systems benefit charge, or SBCs, impose a minimal charge per kWh to all customers of energy companies. This charge will be put into a fund for renewable energy R&D, and can benefit weatharization programs which help low-income families increase energy efficiency and decrease energy costs. The amount of this charge is a miniscule amount of a person’s total energy bill, but overall will greatly increase the amount of money put into renewable energies. Wyoming should start with a small fee, as this state is conservative in its views of energy and heavily reliant on coal and other fossil fuels. A .03 cent per kWh fee should be imposed first, eventually increasing over 15 years to cap at 4% of the customers total energy bill. This money will greatly increase Wyoming’s expenditure in renewable energy R&D and implementation.

Effects of Revising Wyoming’s Energy Policies

            Energy policies should do more than just focus on energy production, they should also promote energy conservation. If Wyoming implements policies that establish high efficiency standards, promote the increased efficiency of buildings, and give renewable energy a fair chance to find a place in the energy market, the state can greatly change its energy picture. Wyoming will have a more diverse energy portfolio, thus creating a more stable energy platform. They will use less energy, thus saving on the amount paid to energy producers. They will create markets for more sustainable industries, and they will be tremendously reducing the effects of their energy consumption on the environment, both in their state and globally.

            Wyoming is home to many beautiful natural areas, such as Yellowstone National Park and The Grand Tetons. Their economy is reliant on the tourism and recreational activities that their natural areas bring, and to preserve the pristine atmosphere of these places would greatly benefit their economy. The promotion of renewable energy use in the state will benefit both the vitality of the economy and the environment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Resources

www.eren.doe.gov/state_energy/policy_options

www.eia.doe.gov/emeu/sep/wy/frame.html

www.greens.org

Goldberg, M. 2000. “Federal Energy Subsidies: Not All Technologies Are Created

Equal”. Research Report from Renewable Energy Policy Project (REPP). July

2000. N11.