The Deepwater Horizon explosion and oil spill in the Gulf of Mexico may expand the already substantial compliance and operational issues facing the energy sector. Aggressive efforts by regulators at the federal and state/provincial levels in the United States and Canada have been increasingly focused on encouraging renewable energy output while tightening restrictions on fossil fuel production and use. Corporate counsel who understand the challenges can realize profitable new opportunities.
Across the United States, states are adopting renewable portfolio standards (RPS) that require a certain percentage of the public utility energy supply to come from renewable energy. In order to meet these requirements, which have been put in place in 29 states and the District of Columbia, utilities have several options: (1) build their own renewable energy capacity; (2) use the capacity of renewable energy developers by either purchasing the developers' unused renewable energy credits (REC) and/or (3) buying the excess power that renewable energy developers generate but cannot store using net metering or feed-in tariff pricing. (Visit the Federal Energy Regulatory Commission Web site for a list of states with RPS policies.)
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