Clean Energy Investment ‘Bank’ Has Bipartisan Support, But No Money
WASHINGTON—Two top senators are again toying with the fancy of enhancing the Department of Energy’s ability to finance clean energy projects.
Those in the business are certainly eager to embrace the resurrection of what is called the Clean Energy Deployment Administration (CEDA).
However, they’re jittery that it will emerge as a piece of “all hat and no cattle” legislation if the Senate Energy and Natural Resources Committee can’t definitively map out where to find an estimated $10 billion in upfront costs.
Committee Chairman Jeff Bingaman is talking about having a piece of legislation — likely without accommodations for offsetting the cost — prepared this month. It’s possible that the committee could mark it up and vote on it within the next few weeks.
Alaska Sen. Lisa Murkowski, the committee’s ranking Republican, is on board with the New Mexico Democrat’s measure. But she’s made it clear that the program’s cost would have to be balanced via spending reductions elsewhere in the federal budget.
Expectations are that the Senate, where the Democratic caucus has a 53-47 majority, would follow the committee’s lead and be receptive to the CEDA measure. But the Republican-dominated House is a different story.
Numerous times this year, Bingaman has told reporters that bit-by-bit is the only practical approach to molding energy legislation that the House GOP majority will not smack down.
Innovators affiliated with the Clean Economy Network would prefer that Congress broach a comprehensive energy package but they are well aware that the term “comprehensive” is generally shunned on Capitol Hill these days.
“It’s a reflection of the sign of the times,” Tim Greeff, the network’s policy director, told SolveClimate News in an interview. “But that being said, a good idea is a good idea. And the Clean Energy Deployment Administration is a good idea, especially right now when there are signs the economy is recovering.”
A Brief History
Retired New Mexico Sen. Pete Domenici, a Republican and former committee chairman, actually initiated the concept of CEDA several years ago.
Backing for a DOE-connected government entity to provide financial support through loans, loan guarantees, and other mechanisms to promote deployment of clean energy technologies also gained legs in the 111th Congress.
For instance, it was included in the now-maligned American Clean Energy and Security Act that Reps. Ed Markey of Massachusetts and Henry Waxman of California guided through a Democratic-led House in 2009.
CEDA also drew support from Bingaman and Murkowski as part of the overarching American Clean Energy Leadership Act. The bipartisan measure cleared the energy committee but never gained traction in the Senate.
Nuts and Bolts
While this country has made promising advances with renewable energy, highly fuel-efficient and electric drive vehicles, smart grid technology and ultra-efficient lighting and appliances, Bingaman explained during a May 3 committee hearing focused on CEDA, their transition to the commercial marketplace has been frustratingly slow.
At the same hearing, Murkowski pointed out that CEDA would address the persistent lack of available financing. A distinct advantage, she added, is that the program would allow for more stable and consistent funding to back private lending for clean energy projects, instead of only offering one-time payments in the form of grants or tax credits.
“Despite the high initial costs of creating a Clean Energy Deployment Administration,” Murkowski said, “I continue to believe that it’s a smarter, more efficient way for the federal government to promote clean energy technologies.”
Those insights resonate with Greeff’s organization, which has offices in Washington and San Francisco. The educational and advocacy organization was formed in March 2009 to shape a new economy based on clean technology and innovation.
Some of the knocks on DOE’s current one-time loan programs are that they are funded inconsistently, lack transparency and geared to only the most gargantuan projects.
Funding via CEDA, Greeff noted, would put money into the system in an intelligent manner. It would mimic a balanced investment portfolio in that it would increase security by including more diverse energy projects from a full range of sources. Plus, he added, the proposal includes enough financial and staff resources to force a strong and healthy marriage between decision-makers with technical expertise and financial and market expertise.
“The inability to attract capital investments can be crippling,” he said. “In our humble opinion, the government definitely has a role in financing energy projects. But we don’t need guaranteed, unlimited funding that goes on for decades.”
While government funding might be the rock that programs such as CEDA are built around, he said, that just means checks and balances need to be strong enough so taxpayers aren’t left holding the bag on questionable projects.
“Government money lessens the risk for private investors,” he continued. “It’s a way to balance riskier projects with safer ventures. Some of these projects are too risky for private investors to prop up on their own.”
Reid’s Piecemeal Plan
On the same day of the CEDA hearing, Senate Majority Leader Harry Reid told reporters that he would be open to a piecemeal tackling of energy measures on the Senate floor before Congress breaks for its Memorial Day recess.
“I don’t think we can jam it all together. But I think we can take them one at a time,” the Nevada Democrat told reporters on Capitol Hill about his hesitancy to advance a single large package. “Anything [Bingaman] gets out of his committee, with rare exceptions, is going to be bipartisan in nature, so I look forward to doing something energy-related. We are way behind where we should be on energy legislation.”
Thus far, in addition to CEDA, Bingaman’s list includes measures that cover energy efficiency, small modular nuclear reactors and offshore drilling safety.
House Unpredictable
Even if Reid’s bits-and-pieces approach is successful, it’s dicey to predict how and if the Senate and House would be able to see eye-to-eye on compatible energy legislation. Money for clean energy doesn’t seem to be a top-of-the-list item on the GOP side of the House.
After all, it was just last week that four prominent House Republicans launched what they christened HEAT. The House Energy Action Team is tasked with promoting what they call common-sense energy solutions.
“The restrictive policies of this administration are bringing unnecessary pain at the pump and they are costing our nation jobs,” Majority Whip Kevin McCarthy of California said in introducing a team last Wednesday that vowed to create jobs, boost the economy and enhance security through energy independence. “The HEAT initiative will further highlight Republican energy proposals to expand domestic energy production.”
McCarthy is joined in this effort by three co-chairs: Chief Deputy Whip Peter Roskam of Illinois; Energy and Commerce Committee Chairman Fred Upton of Michigan; and Natural Resources Committee Chairman Doc Hastings of Washington. Another 24 GOP representatives also are participating with HEAT.
It seems the HEAT devotees wasted no time acting.
The day after McCarthy made his announcement, the House gave a thumbs up to a bill (H.R. 1230) that prompts the Interior Department to pick up where it left off after the 2010 BP oil catastrophe and orchestrate oil lease sales off the coast of Virginia and in the Gulf of Mexico. This week, the House is considering amendments to a related bill (H.R. 1229) that would require the Interior Department to set solid deadlines for accepting or rejecting Gulf of Mexico drilling permits. Action is pending on a third bill (H.R. 1231) that also deals with expanding offshore drilling.
Shifting DOE Dollars?
In the meantime, those championing a Clean Energy Deployment Administration are hopeful that senators are courageous enough to rearrange enough dollars in the DOE budget — or elsewhere — to make the proposed entity more than a plan on paper.
They are certainly aware that President Obama’s budget for fiscal year 2012 is relatively generous. It would bump the Energy Department’s allotment up to $29.5 billion — 12 percent higher than the enacted budget for 2010.
Greeff isn’t too keen on Bingaman’s notion of advancing legislation before defining a funding source but he’s trying to remain open-minded.
“From our standpoint, this is a bottom-line industry,” he said. “Having the legislation is sort of a victory in that it’s a step forward. A framework is nice but you need to figure out where the money will come from.”