Thursday, July 2, 2009

Central Procurement State in Waxman-Markey

I have been trying to read the final version of Waxman-Markey and I was doing okay until I got to page 16 of 1428 and hit this sentence:

(7) CENTRAL PROCUREMENT STATE.—The term ‘central procurement State’ means a State that, as of January 1, 2009, had adopted and implemented a legally enforceable mandate that, in lieu of requiring utilities to submit credits or certificates issued based on generation of electricity from (or to purchase or generate electricity from) resources defined by the State as renewable, requires retail electric suppliers to collect payments from electricity ratepayers within the State that are used for central procurement, by a State agency or a public benefit corporation established pursuant to State law, of credits or certificates issued based on generation of electricity from resources defined by the State as renewable.

I found this rather opaque and naturally tried to Google "Central Procurement State" and found that no one had figured out what this sentence meant and were somewhat dismayed. I took this as a challenge and set down and proceeded to attack this sentence with all the wit at my command.

After several readings, I finally got the concept that utility companies, instead of managing their own renewable energy programs, would collect surcharges from their customers and give that money to the State. The State in turn would use this money to create renewable energy programs. I read the various references to "Central Procurement State" in Waxman-Markey and they seemed to be consistent with that interpretation.

The next question that came to mind is what is the purpose of this sentence? On closer reading I decided that the "January 1, 2009" implied that there was already a state that met this definition, but Rep. Waxman didn't want other states becoming "Central Procurement States". There is a convention in legislation, that when you are creating a bill that will only benefit a single entity, that you can't actually say that it is only for California or Boeing or Henry A. Waxman of Los Angles, CA. You have to craft a definition so that only that one entity meets it. Since Representative Waxman is from California, I naturally suspected that California would meet this definition. After a little web searching, I discovered that California has a renewable energy program that is financed by rate surcharges charged by the utility companies on their customers!

Now onward to page 17 of 1428.

Links are available below

Text of Waxman-Market as passed by House
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h2454eh.txt.pdf

California Renewable Energy Program
http://www.energy.ca.gov/renewables/index.html

Database of Renewables
http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=CA05R&re=1&ee=0

1 comments:

  1. I'm usually the first one to put down various scaremongering and doom claims over legislation being the next thing that will destroy everything. However, this bill really scares me. What scares me most is that so few seem to think it's a bad idea or see the reasons it is. It's really just chilling the more I read of it.

    Does nobody still understand how energy and market economies work? Does nobody understand the basic science of physics and work/energy?

    I don't mean to be melodramatic, but when I started reading the basics of this legislation I felt a sinking feeling in the pit of my stomach and a fear of what the future would be for this country that I have not felt since the morning of September 11th 2001 and which I hoped I'd never feel again.
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