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A Way to Enhance Renewable Energy Development

March 29, 2012

Earlier this month, a blog was posted on this website that discussed a potential dimming in the outlook for renewable energy development. Although the drags on renewable energy projects mentioned have not dissipated, Utah has just enacted a law (Senate Bill 12) that may partially offset them. Specifically, beginning this summer Utah will permit electric utility retail customers to purchase power directly from renewable energy projects. The state’s electric utilities will deliver the green power to customers.

Other states with fully regulated electricity markets should consider permitting retail access of renewable energy. Enabling customers to purchase green power directly from producers rather than restricting access to indirect procurement through utilities should increase interest in project development. A key driver for this would likely be the ability of customers to enter into direct long-term purchase power agreements with producers. The price certainty associated with these agreements would effectively allow green energy procurement to acquire an energy risk management dimension. As direct access to power generated from renewable resources increases, the share of electricity generated from alternative energy projects should rise accordingly.

Utah is to be saluted for its proactive stance towards green power, and the flexibility that it has bestowed upon retail customers. It would be wise for other states to consider similar legislation.

 Ken Eisdorfer 03/28/2012

Since 1986, UAI has provided energy supply management services that reduce utility costs for multi-site industrial, commercial, and governmental customers.  UAI’s core team of unbiased utility rate analysts and deregulated energy procurement experts manage over $2 billion in annualized energy spend and are focused on lowering the cost of utilities for end-use customers. UAI’s comprehensive energy cost management services include deregulated energy procurement, utility rate analysis, utility bill auditing and overall utility bill processing services that result in reduced energy costs and measurable utility savings. For more information on Utilities Analyses, Inc., visit www.utilitiesanalyses.com

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