Renewable proponents discuss mid-term election results
The mid-term elections earlier this month resulted in a major turnover of members for the upcoming 112th Congress. The renewable energy sector has enjoyed a positive policy environment, but changes could be on the horizon.
In light of those possible changes, the American Council on Renewable Energy hosted a webinar, November 2 Elections: Impact on Renewable Energy Policy, Nov. 17 to discuss the outlook for the renewable energy sector as the new Congress prepares to convene in January.
“Did the Nov. 2 midterm elections change everything?” questioned webinar moderator Robert Riley, partner with Washington D.C.-based law firm Williams Mullen PC. The flip to a Republican majority in the House of Representatives has created a fair amount of uncertainty, said webinar speaker Gerard Waldron, partner with Covington & Burling LLP. It will change key players including the replacement of Speaker Nancy Pelosi, D-Calif., with John Boehner, R-Ohio. “And that will change the dialogue,” Waldron told the more than 200 participants who participated in the webinar and teleconference. The Energy & Commerce Committee gavel is up for grabs, with the possibility for a switch in leadership of the Committee on Science and Technology as well, he added.
“I do think there is a possibility to see some energy policy move forward,” said fellow speaker Ben Geman, energy editor for The Hill newspaper. Changes in the Senate were not nearly as sweeping, he emphasized. Democrats retained the majority despite republican gains, but the landscape is very different post-cap-and-trade, he said. The cap-and-trade policy is completely off the table, he added, creating some uncertainty in the renewable sector. Now, policy will need to be framed around investment instead of emissions, he pointed out.
Uncertainty is also exacerbated by the lame duck session, where big ticket issues are mostly non-energy related, such as the extension of the Bush tax cuts. Bob Cleaves, president and CEO of the Biomass Power Association, listed 2009 tax extenders such as the biodiesel and renewable diesel tax credits, biomass production tax credit and U.S. Treasury Section 1603 grants as areas needing attention from the 112th Congress. “Essentially, we’ve got a huge traffic jam of tax credits,” he said. Those expiring tax provisions will be the first order of business for the 112th Congress, Cleaves said, followed by tax equity among renewables, among others.
“It’s important to know where we’re coming from in order to see where we’re going,” said Ted Michaels, president of the Energy Recovery Council, which represents the waste-to-energy industry in the U.S. Things will certainly be different in the new Congress, but it’s not the first time, Michaels emphasized, pointing out the changes and replacements in Congress during the 2008 elections. Since then, the 111th Congress has accomplished extensions of the Production Tax Credit and Investment Tax Credit, as well as the creation of the Section 1603 grants, he cited. In his outlook for the 112th Congress, Michaels said a renewable energy standard will be difficult; tax policies and new mechanisms are possible; but cap-and-trade will be impossible.
The goal of any energy legislation in the 112th Congress will have to be cutting the cost of clean energy, not raising the cost of existing generation, said Alex Kragie, vice president of the Coalition for Green Capital. The easiest way to do that is an Energy Independence Trust, which would issue low-interest loans. Predictable tax and finance policies are essential, he added, and research and development is a vital government responsibility.
The landscape is significantly different after the mid-term elections, all panelists agreed, creating uncertainty in the future of renewable energy. “But don’t despair completely,” Waldron said. “Not all issues will be partisan; energy has a chance to shine.”