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WRI Summary of the Clean Energy Standard Act of 2012, S. 2146

This summary provides an overview of S. 2146, the Clean Energy Standard Act of 2012 (CESA), introduced by Senator Bingaman and 8 cosponsors on March 1, 2012. The CESA establishes a standard for clean energy generation in the U.S. through 2035.

1. What is the Clean Energy Standard Act?

  • Beginning in 2015, each utility covered under the bill must obtain a certain amount of electricity from “clean” sources. That obligation increases each year, so that in 2035 covered utilities must supply 84% of their total annual sales of electricity from clean sources.

  • Covered utilities can generate electricity from clean sources to meet the electric demands of their consumers, or they can purchase tradable credits from other clean sources.

  • Covered utilities that do not generate electricity from clean sources or purchase credits from other clean sources may also comply by paying a fee, known as an alternative compliance payment. That payment starts at 3 cents/kWh in 2015, and annually increases by 5% plus the rate of inflation. Use of revenues collected through this fee is discussed under question 7. (Read more >>>)

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