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This is a “tax” because it requires those utilities unable to meet the required percentage to purchase renewable credits from those that can exceed the targeted amount. The higher generating costs incurred from constructing and operating the renewable technologies, or buying renewable credits, will be passed on to the users of the electricity. These “taxes” are in addition to the generous tax-funded subsidies already provided to many qualified renewables.
The concept of an RPS is not new. Twenty-nine states and the District of Columbia currently have some form of RPS[iii], but few states are meeting their mandates,[iv] and these states have often tailored their “qualified renewables” liberally to what makes sense to their area. Texas, a state that has met its mandates mainly from wind-generated power, the least-cost qualified renewable, is now considering expanding into more costly renewables, such as solar power. Houston, for example, is considering using solar to generate 1.5 percent of its government’s needs from a 10-megawatt plant to be built by NRG and to be operating by July 2010. When the sun is not visible, the plant will be backed-up by the city’s natural gas-fired generating units.
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