The clean electricity program is the cornerstone climate policy in Democrats’ massive economic package. It would give federal grants to electric utilities and electricity suppliers who increase the amount of clean energy in their portfolio. The program would require those who fail to adequately increase clean electricity sources to pay a fee to the US Department of Energy.
Lindsey Walter, deputy director of center-left think tank Third Way’s Climate and Energy program, says that at the proposed funding level of $ 150 billion over the life of the program, it will be possible to reach President Joe Biden’s goal of 80% clean electricity by 2030.
“It’s still the goal we’re aiming for, but that’s not a mandate in the policy itself,” Walter told CNN.
Democrats are putting heavy emphasis on decarbonizing electricity to achieve their climate goals because it has the potential to be a dominant form of energy in the US; it can power zero-emissions vehicles and provide energy to buildings in addition to powering appliances and lights.
“Clean electricity ends up being a catalyst for an entire clean economy,” Leah Stokes, a senior policy advisor at Evergreen and associate professor of political science at the University of California, Santa Barbara told CNN recently. “It turns out we can use clean electricity to clean up our transportation, our buildings and even part of heavy industry.”
The clean electricity program and clean energy tax credits
— which lawmakers also plan to include in the budget bill — will account for the vast majority of Biden’s target for the US to cut its greenhouse gas emissions
by 50-52% relative to 2005 levels by the end of the decade. A recent analysis
from Senate Majority Leader Chuck Schumer found close to 42% of Biden’s decarbonization target could be achieved from the two programs combined.
How would the clean electricity program work?
The program would run on a set of incentives and fees for electricity suppliers, like utility companies.
Most electricity in the US is currently powered by fossil fuels, including coal and natural gas, according to the US Energy Information Administration. As written, the clean electricity program would work to change that by giving utilities incentives to gradually shift away from fossil fuels and incorporate more sources of renewables and clean energy into their electricity portfolio.
A fact sheet from the House Energy and Commerce Committee says that utilities will be eligible for a federal grant if they increase the amount of clean electricity supplied to customers by 4% compared to the previous year. The grant would be $ 150 for each megawatt-hour of clean electricity above 1.5% of the previous year’s clean electricity.
If, on the other hand, a utility doesn’t increase its clean electricity percentage by 4 percent compared with the previous year, it would have to pay a fee to the Department of Energy.
How would this change where our electricity comes from?
The program defines eligible clean electricity as not creating more than 0.10 metric tons of carbon dioxide per megawatt-hour. Electricity generation from coal, on the other hand, releases around 1 metric ton of carbon dioxide per megawatt-hour, according to the Environmental Protection Agency
New sources of energy could include nuclear, hydroelectric, solar and wind, or sources that capture the emissions from fossil fuels before they escape into the atmosphere.
The carbon capture element in particular could be key to securing the vote of Democratic Sen. Joe Manchin of West Virginia. Manchin represents a state where coal is still in use, and is a big proponent of carbon capture systems.
How many jobs could this program create?
Early analysis shows that a clean electricity program could be a big job creator in the US
; a Thursday report from independent firm Analysis Group found that a $ 150 billion clean electricity program would increase the US workforce by 7.7 million new jobs and add nearly $ 1 trillion to the economy by 2031.
Many of the employment opportunities would be in construction as new infrastructure is built for wind, solar, and other forms of renewable energy to power America’s electrical grid.
Jobs in retail and manufacturing would also increase, the analysis found. However, those estimates could change as the program will likely change before Congress votes on it.
Will the price of electricity increase?
The program is designed to keep electricity prices stable, or lower, during the transition to clean electricity.
“This is an investment by the federal government for keeping electricity bills low while cleaning up the electricity system,” Stokes said. “If we don’t have that investment, utilities could be pushing costs up for people.”
What’s the future of this measure?
Since this program is part of Democrats’ massive budget bill, the process of drafting it starts with House committees. Once the committee has marked up, debated and voted on the bill, it will go to the US Senate where that process will repeat. The two chambers will then work on a final bill.
This clean electricity payment program will be taken up by the Senate Committee on Energy and Natural Resources, which Manchin chairs. It will likely change before the House and Senate work on a final bill together.