Clean Energy Standards Act of 2012

New legislation announced in the U.S. Senate last week aims to modernize the U.S. power grid by using carbon credits to encourage the development of new electricity generation technologies.

The Clean Energy Standard Act of 2012 (CES) was introduced by Senator Jeff Bingaman of New Mexico. As proposed, the bill does not call for limiting total emissions or electrical generation growth. 

CES aims to create market-driven energy innovation by establishing a credit-trading system. Credits will be issued to power generators based on efficiency, megawatts of power generated and the amount of carbon used. According to the bill, no negative credits will be issued. The number of credits needed by each utility will be determined by dividing the net annual carbon emissions by the annual quantity of electricity generated.