Notes and Sources

1 Letter from Senator Bingaman to EIA Administrator Guy Caruso dated May 8, 2003. See appendix A.

2 Although the requirement to hold credits doesn’t begin until 2008, renewable facilities starting operation after the enactment date are eligible to produce credits.

3 As reported in this analysis, RPS share achieved should be compared with calculated target of all non-hydroelectric renewables as a share of all generation rather than all qualifying renewables as a share of the generation base specified in the RPS program. The resulting percentages are 7.1 percent in 2019 and 8.8 percent in 2025 rather than 7.5 percent in 2019 and 10 percent in 2025 as specified in the request letter.

4 Absolute levels of renewables remain more or less constant once the cap price for credit allowances is reached, but since the overall electricity market is growing, the renewable share is decreasing.

5 NewGen Data and Analysis, Platts Database (Boulder, CO, March 2003).

6 Conner, Francfort, and Rinehart, U.S. Hydropower Resource Assessment, DOE/ID-10430.2, December 1998.

7 See Impacts of a 10-Percent Renewable Portfolio Standard. U.S. Department of Energy, Energy Information Administration, DOE/EIA (SR/OIAF/2002-03), February 2002.

8 The request letter specifies the value of the credit cap in 2003 dollars. This analysis shows the real value of the cap in 2003 dollars. All NEMS results are calculated and reported in real 2001 dollars.

9 See Assumptions for the Annual Energy Outlook 2003 with Projections to 2025. U.S. Department of Energy, Energy Information Administration, DOE/EIA-0554(2003), January 2003

10 If the credit price is at its maximum value of 0.9 cents per kilowatt-hour (year 2003 dollars), and each generator must have credits for 8.8 percent of generation, then the credits will contribute 0.08 cents (0.9 X 0.088) to the cost of each kilowatt-hour.

11 Wind penetration levels of 15% have been achieved in Denmark and some other areas. However, these systems are interconnected with larger regions that provide significant capability for ensuring reliability. These larger regions are more analogous to the regions modeled in NEMS.

Addendum - Notes and Sources

1 Letter from Senator Bingaman to EIA Administrator Guy Caruso dated June 5, 2003, See Addendum Appendix A.

Supplement - Notes and Sources

1 Letter from Senator Domenici to EIA Administrator Guy Caruso dated June 10, 2003. See appendix A

2 Analysis of a 10-percent Renewable Portfolio Standard, SR/OIAF/2003-01, May 2003 and Addendum: Analysis of a 10-percent Renewable Portfolio Standard, June 2003. See http://www.eia.doe.gov/oiaf/anal_renew.html

3 OMB Circular A-94: GUIDELINES AND DISCOUNT RATES FOR BENEFIT-COST ANALYSIS OF FEDERAL PROGRAMS. http://www.whitehouse.gov/omb/circulars/a094/a094.pdf

4 The time value of money refers to the premium people, corporations, governments, and societies place on having a given quantity of money now compared to having the same amount of money at some future point in time. This is evaluated through the use of discount rates. A high discount rate implies a large value in having money today compared to having money in the future, a zero discount rate implies indifference to having money today compared to having the same amount of money at any future time.

5 In addition to accounting for the time value of money, comparison of monetary values in different years typically accounts for general inflation of the economy. When the effects of inflation are removed from each year’s monetary values, the value is indicated as “real”, as it represents the value in physical cash on hand today. If inflationary effects are not removed, the value is indicated as “nominal” and represents the monetary value of cash payments in the year of the transaction.

6 Actual spacing of turbines depends on a number of site-specific factors. Generally, the more the wind tends to blow from a single direction, the closer the turbines can be spaced perpendicular to that direction. Many current wind farms are constructed on narrow ridgelines with highly directional winds, and are spaced in linear strings with less than 3 rotor diameters between turbines. However, more intensive utilization of the wind resource will likely require more regular, rectangular arrays with greater spacing.

7 Table 9-2 USDA-NASS Agricultural Statistics 2003. http://www.usda.gov/nass/pubs/agr03/03_ch9.pdf