{ "id": "R45913", "type": "CRS Report", "typeId": "R", "number": "R45913", "active": true, "source": "CRSReports.Congress.gov, EveryCRSReport.com", "versions": [ { "source_dir": "crsreports.congress.gov", "title": "Electricity Portfolio Standards: Background, Design Elements, and Policy Considerations", "retrieved": "2020-11-25T04:03:37.730717", "id": "R45913_4_2020-10-21", "formats": [ { "filename": "files/2020-10-21_R45913_d5e79fff3af4fb02b061ce445efe4e978ee4535b.pdf", "format": "PDF", "url": "https://crsreports.congress.gov/product/pdf/R/R45913/4", "sha1": "d5e79fff3af4fb02b061ce445efe4e978ee4535b" }, { "format": "HTML", "filename": "files/2020-10-21_R45913_d5e79fff3af4fb02b061ce445efe4e978ee4535b.html" } ], "date": "2020-10-21", "summary": null, "source": "CRSReports.Congress.gov", "typeId": "R", "active": true, "sourceLink": "https://crsreports.congress.gov/product/details?prodcode=R45913", "type": "CRS Report" }, { "source": "EveryCRSReport.com", "id": 604946, "date": "2019-09-10", "retrieved": "2019-09-16T22:06:42.417378", "title": "Electricity Portfolio Standards: Background, Design Elements, and Policy Considerations", "summary": "Electricity portfolio standards, such as renewable portfolio standards and clean energy standards, are policies aimed at changing the energy sources used to generate electricity. Supporters identify multiple policy goals, including greenhouse gas reduction, technology innovation, and job creation. Twenty-nine states, three U.S. territories, and the District of Columbia are currently implementing mandatory portfolio standards. Congress, to date, has not established a national portfolio standard, though bills that would do so have been introduced in every Congress since the 105th. \nCongressional interest in 2011 and 2012 prompted a variety of analyses about potential impacts of a national portfolio standard. The national electricity generation profile has changed since then in ways that might make previous analyses less relevant to any future policy debate. Between 2012 and 2018, in the U.S. generation from coal fell (from 37% to 27%), generation from natural gas increased (from 30% to 35%), and generation from renewable sources (e.g., hydropower, wind, solar) increased (from 12% to 18%). Many expect these trends to continue, regardless of any new federal policy related to the electric power sector.\nPortfolio standards are generally envisioned as market-based policies in the sense that they use financial incentives rather than prohibitions to achieve policy goals. Several key concepts in portfolio standards are common to other market-based policies. Credits are an accounting mechanism used for compliance and are tracked in electronic databases sometimes called registries. Lawmakers can choose the degree of flexibility around credit use in a portfolio standard, with potential impacts on overall policy costs and benefits. Procedures to monitor, report, and verify credits can help portfolio standards achieve their policy goals and reduce the risk of fraud. \nOther concepts are specific to portfolio standards. Choices about these design elements can strongly influence policy outcomes. Generally, choices that would tend to reduce costs would also tend to result in fewer changes in the electricity generation profile. \nThe choice of which energy sources would be eligible for compliance, and therefore would be incentivized by the program, is often central to policy discussions about portfolio standards. Past proposals have included a range of eligible sources, including renewable sources, nuclear, fossil fuel-fired power plants equipped with carbon capture and sequestration technology (CCS), and natural gas combined cycle power plants. Some proposals have included nongenerating sources like energy storage and energy efficiency as well. Other design elements include whether all utilities should have to comply with a portfolio standard or whether some would be exempted; how much generation from eligible sources a portfolio standard is designed to achieve; by when should the desired amount of generation from those sources be achieved; to what share of a utility\u2019s electricity sales should a portfolio standard apply; and whether any provisions should be included that delay or halt compliance under certain circumstances (e.g., undesirably high prices). \nIf established, a national portfolio standard would likely have economic effects, though estimating these in advance is subject to some uncertainty. Any sources and associated industries excluded from the definition of eligible sources would likely experience negative economic effects. At the same time, industries associated with sources included in the standard would likely experience positive economic effects. The net effect on national economic activity would depend on the design details of any portfolio standard and the ways that consumers might respond to potentially higher electricity prices. \nA national portfolio standard might also have environmental effects compared to a business-as-usual scenario, depending on design choices such as source eligibility and the change from business as usual a portfolio standard is designed to achieve. Potential eligible sources vary in their GHG and air pollutant emissions, as well as other attributes such as water consumption and power density (which can affect land requirements). Implementation could affect environmental outcomes too. For example, deploying small-scale distributed eligible sources might have different effects than deploying large-scale eligible sources.\nAnother policy consideration is potential interaction with state energy policies like existing portfolio standards, electricity infrastructure siting, and the use of competitive markets to influence electricity investment decisions. 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