The linchpin of President Biden's strategy to achieve a net-zero electricity grid by 2035 is a national clean electricity performance program, or CEPP, which encourages utilities to produce an increasing amount of power from low-carbon resources. The idea, included in congressional Democrats' budget reconciliation outlines in the House and Senate, is similar to previous clean energy standard (CES) proposals but is designed in such a way as to pass through the simple majority reconciliation process in the Senate.
As Stefan Koester writes in Industry Dive, the CEPP has broad support among corporate leaders, environmental groups and even the Edison Electric Institute, the trade organization for the nation's investor-owned utilities, which came out in support of a similar previous CES proposal. On September 10, we got the first look at the House's version of the CEPP, which includes a $150 per MWh payment for utilities that increase their annual clean electricity by 4 percent year-over-year above 1.5 percent of the previous year's target. The CEPP also includes a $40 per MWh penalty for utilities that miss their annual target.
As lawmakers consider their options for climate action in a reconciliation package, they must continue to support clean energy innovation. A CEPP with a well-designed innovation multiplier could go a long way toward developing and deploying at scale the technology necessary to decarbonize the U.S. grid.
