In effort to encourage increased use of renewable energy, state governments are developing innovative approaches to increase development of renewable energy sources such as wind, biomass, and solar power.

Three separate incentives have emerged in California recently. Proposition 87, the California Clean Air Initiative, is a measure on the state’s November ballot that would impose a fee upon oil producers to fund up to about $4 billion in renewables and other energy programs in the next ten years. The fund would come from fees assessed on oil drilling in the state paid by oil companies and would be on a sliding scale from 1.5% to 6% based on the price of oil. Once the $4 billion is raised, the fee would end. The money raised would promote clean air technologies such as solar and wind power and other renewables, energy efficiency technologies, and conservation strategies. The goal is to reduce oil consumption by 25% over the next decade.

The second incentive was enacted on September 25, 2006, when California Governor Arnold Schwarzenegger signed SB 107. This measure accelerates compliance with the state’s renewable portfolio standard from 2017 to 2010. The bill requires each retail seller to increase its total procurement of eligible renewable energy resources by at least an additional 1% of retail sales per year so that 20% of its retail sales are procured from eligible renewable resources no later than December 31, 2010. The law includes a flexible compliance provision intended to assist utilities to meet the renewables goal. Included in these provisions is a measure that permits renewable power produced outside the state to count toward the 20% renewables goal if the power is delivered to an in-state location.

A third incentive is the Los Angeles Department of Water and Power’s plan to issue a request for proposals for four 25- MW municipal solid waste to energy projects, two 125-MW solar power projects, and a 50-MW geothermal plant as part of its renewable portfolio standard master plan. The city is requesting proposals from private developers to construct the plants but eventually wants to take ownership and control of the plants to speed up the development process. The LADWP hopes to have the plants up and running by 2013. The objective is to meet an RPS goal, established by the city council, to have 20% of its resources generated by renewables by 2010.

Louisiana currently does not have a renewable portfolio standard but is looking to encourage greater use of renewables through green pricing rules. With green pricing, customers may chose to buy renewable energy that the utility has contracted for. The utilities would be required to offer green electricity for a premium to those willing to pay the whole cost. Two key issues facing the Louisiana Public Service Commission (PSC) is whether it should require renewable power to come solely from in-state generators and whether utilities would be allowed to buy renewable credits. In response to the PSC request for comments on its staff recommendations several industrial companies and the state’s farm bureau have asked the PSC to promote in-state-produced biomass as a source of renewable energy.

Pennsylvania Governor, Edward Rendell, announced on October 5, 2006, that the state is investing $6.4 million in 16 clean energy projects to stimulate the growth of clean energy technologies. The 16 projects will receive grants for a variety of clean fuels and green power projects using sources such as solar, fuel cells, biofuel, landfill gas, and biomass. The projects were evaluated on a variety of criteria, including their ability to promote the state’s indigenous energy sources. The projects will generate an estimated 15,720 megawatt hours of electricity and produce the equivalent of enough natural gas to  supply almost 2,500 homes for a year. The projects also have the potential to produce 115 million gallons of biofuel.

On September 25, 2006, Wisconsin Governor, Jim Doyle, announced a plan to encourage development and use of renewable energy and bioindustry in the state through a $450 million public and private investment strategy, including nearly $80 million in funds from the state. The program includes financial incentives such as bonds, tax credits, loans, and grants for companies willing to invest in and develop new technologies and renewable energy. The plan also includes a $20 million grant program for companies and researchers developing new technologies to increase renewable fuels. The plan follows on the heels of the Governor ’s announcement earlier this year that the state’s goal is to generate 25% of its electricity and 25% of its transportation fuel from renewable fuels by 2025, and to capture 10% of the market share for renewable energy production by 2030.