February 9, 2021 — What is RPS on your electric bill? In this video, Mid-Atlantic Manager Mike Eckenroth explains what this charge is and why it might appear on your electric invoice.
Hey, I’m Mike at Nania Energy. If you’ve looked into green energy options in the past, you know you can source 100% renewable energy by purchasing RECs. However, you might be surprised to learn that some of the energy you consume has already been generated by renewable sources.
Some states mandate the minimum amount of renewable energy a facility consumes through a charge called Renewable Portfolio Standard. In this week’s Two-Minute Tuesday, we’re going to dive into what RPS is and why it matters to you.
What is RPS?
In the US, 29 states plus Washington, DC require electric suppliers to include a minimum percentage of renewable energy in their electricity supply. As of right now, there’s no federal law mandating renewably-sourced energy, so it’s left to the states and their constituents on how they want to tackle green energy adoption.
Because it’s not centrally regulated, RPS programs vary from state to state, as you can see here.
Some states have chosen very aggressive goals, like Washington, DC at 100 percent green by 2032. Others have more modest goals, like Arizona at 15 percent by 2025. As deadlines for these approach, most states elect to extend them, but some let them expire, like Iowa did with their 1999 goal.
Why do you see an RPS charge on your electric bill?
So why are you seeing this additional charge on your invoice? Regardless of your electricity supplier, they’re going to pass the cost through to you to comply with state law. You’ll see this on your electric invoice as a line item most commonly referred to as Renewable Portfolio Standard or RPS.
Depending on your state and electricity product, the RPS charge might be in your fixed price or separated out on your utility bill.
Is RPS expensive?
For some of our clients, RPS makes up two percent of their cost, and for others it makes up over ten percent of their cost. If current trends continue, we’re going to see Renewable Portfolio Standards become a larger part of your electric costs.
If you have any questions about RPS that we haven’t answered here, feel free to reach out. And thanks for watching! If you found this video helpful, please like, comment, and share below.