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BCSE In Action

April 21, 2014

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BCSE Spring Newsletter
Quarterly Connection, Vol. 12

President's View - Federal Carbon Standards Offer Economic Development and Emission Reduction Opportunities

In early June, the U.S. Environmental Protection Agency is expected to release proposed standards for reducing carbon emissions from existing power plants. If designed smartly, clean energy technology solutions in the natural gas, renewable energy and energy efficiency industries can help meet compliance obligations while bringing needed economic development benefits to states and localities. This sentiment was affirmed in EPA Administrator Gina McCarthy's address to BCSE members at the March 2014 Clean Energy Forum in Washington, DC. Administrator McCarthy expressed an unwavering commitment to moving forward with the development of the federal carbon regulations for power plants. She focused on the portfolio of clean energy options that will help achieve the emission reductions, and, while acknowledging the challenges, she firmly stated that she "will not get this wrong." She urged the Council and its members to continue to talk with states and stakeholders about the success stories of our industries and provide feedback on the proposed existing source regulations when they come out this June. Administrator McCarthy impressed Council members with her passion, straight talk and practical approach. She urged the Council to get the business views out on how the standards and state guidelines need to be structured to enable clean energy technologies and resources to be eligible and viable compliance options.

The BCSE is a unique, broad-based business coalition and is well-positioned to influence the EPA guidelines and state implementation plans. Working through the Council's Clean Air Subcommittee, BCSE members will develop comments on the proposed guidelines once they are released and continue discussions with states on compliance planning.

Lisa Jacobson, President

The First Leg of the Journey for a Tax Extenders Bill

In early April the Senate Finance Committee reported a tax extenders package, entitled, the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act, which extends for two years a number of tax measures important to BCSE members. Chairman Ron Wyden (D-OR) stated his goal was to achieve parity for all sources of energy; expressed his intention to work towards comprehensive tax reform; and his hope that this would be the last time the Committee considered a tax extenders bill.

The bill as reported out of the Senate Finance Committee, included an extension of the following clean energy tax measures, among others:

  • The production tax credit (PTC)
  • The 179D energy efficient commercial buildings deduction
  • The 45L credit for energy efficient new homes
  • The credit for fuel cell motor vehicles
  • The credit for alternative fuel vehicle refueling property
  • The 25C nonbusiness energy property credit

In preparation for the markup BCSE contacted all members of the Senate Finance Committee to convey our priorities.

A number of amendments were offered during the markup but were withdrawn because they were not considered tax extenders and were therefore considered non-germane. Among these was a Cantwell-Bennet amendment to change the threshold for the solar credit to “commence construction,” rather than “placed in service.” Both Chairman Wyden and Ranking Member Hatch agreed to continue to work with Senators Cantwell (D-WA) and Bennet (D-CO) on the amendment.

In other business, the Finance Committee added Senator Mark Warner (D-VA) as its newest member to replace outgoing former Committee Chairman Max Baucus (D-MT) who recently left the Committee to become U.S. Ambassador to China.

In the House Ways and Means Committee, the effort is to review certain provisions of the tax code in a piecemeal fashion and to pass legislation to permanently extend credits the House believes should be permanently extended. BCSE has been meeting with members of the House Ways and Means Committee and will continue meetings throughout the spring, but it is not expected that the House would pass tax extenders legislation until later this year, likely in a lame duck session of Congress.

A Look Ahead to the Summer Sessions at NARUC

Summer is a busy season for utility commissioners. Regional meetings will be held across the country throughout the month of June and the National Association of Regulatory Utility Commissioners (NARUC) will hold the Summer Committee meetings in Dallas, Texas, July 13-16.

BCSE will host events at a number of these meetings to share information with utility commissioners from the second edition of the Sustainable Energy in America Factbook and to discuss energy and compliance planning as the utility commissions consider implementation of the pending U.S. Environmental Protection Agency's (EPA) carbon pollution standards for existing power plants. BCSE members offer solutions to reduce carbon emissions, and meet compliance obligations in a cost effective manner that can also provide economic development opportunities.

To inform commissioners of these opportunities, BCSE will host two breakfast sessions with commissioners and staff at the June meeting in Hershey, Pennsylvania of the Mid-Atlantic Conference of Regulatory Utility Commissioners (MACRUC) and will have a presence and sponsorship opportunity at the President’s Installation Dinner. The Council will meet again with commissioners at a breakfast session to be held during the Summer Committee meetings in Dallas.

BCSE made several presentations on the Factbook to commissioners at their February meeting in Washington, DC and again on a March conference call of the Energy Resources and Environment (EERE) Committee.

Quadrennial Energy Review Offers Path to Improving US Energy Infrastructure

In January of this year, the US Department of Energy (DOE) launched its first interagency Quadrennial Energy Review (QER). Our nation’s energy infrastructure is increasingly challenged by impacts of climate change, aging facilities, energy supply, capacity and patterns of end us. The QER will work to evaluate these challenges and expand on possible solutions. Judith Greenwald, Deputy Director for Climate, Environment and Energy Efficiency in the Office of Energy Policy and Systems Analysis, US Department of Energy (DOE) addressed BCSE members at the March 2014 Clean Energy Forum in Washington, DC. She walked through the process for the QER, starting with the initial focus on infrastructure for transporting, transmitting, and delivering energy. The US energy infrastructure’s increasing interdependencies with water, telecommunications, transportation, and emergency response systems will be assessed under the QER as well. Ms. Greenwald also emphasized the need for infrastructure modernization and investment as a means to integrate clean energy technologies and respond to the evolving needs of utilities and energy end consumers. The QER is intended to serve as a roadmap to help address these challenges as well as play a role in advancing the President’s Climate Action Plan.

Additionally, it was noted the administration will be producing a series of reports regarding the QER and the document due out in 2015 will focus on power generation and energy efficiency. Ms. Greenwald is the lead on energy efficiency at DOE and BCSE looks forward to working with her and her senior staff on the scope of the report and how industry expertise can contribute.

Our members benefitted greatly from Ms. Greenwald’s insights and willingness to entertain questions on the wide range of issues facing the Department of Energy and clean energy technologies, as well as addressing future stakeholder outreach strategy for the QER.

US, International community preparing for climate commitments

The international community is working toward a deadline of December 2015 in Paris, at the 21st Conference of the Parties to the UN Framework Convention on Climate Change (COP21/ UNFCCC), to produce a new global climate agreement. The US and other countries are beginning the detailed work of outlining the framework for this deal, and the nature of “nationally-determined contributions” for reducing greenhouse gas emissions.

If ready, countries will put their pledges “on the table” at the end of the first quarter in 2015. Serious conversations are beginning around Washington, DC among business and environmental stakeholders with the Administration on what might be politically and realistically possible for the US pledge. The Council is continuing its work to demonstrate the positive contribution that commercially-available, clean energy technologies can provide towards enhancing mitigation and improving resilience – both at home in the US and abroad.

In the near-term, the BCSE will be leading a small delegation to the upcoming UN Climate Change Conference in Bonn, Germany, June 4-15, where it will work to extend the recent UNFCCC spotlight on renewable energy and energy efficiency. The Council will also be leading a delegation to the 20th Conference of the Parties to the UNFCCC in Lima, Peru, from December 1 – 12, 2014.

BCSE Pledges Support to Governors on Energy Planning and 111(d) Compliance

BCSE sent letters in April to all 50 governors to pledge the support of the Council's business members in assisting the states implement the EPA carbon pollution standards for existing power plants due out in June in a manner that can also grow the states’ economy.

In developing the existing source standards, the President has asked the EPA to build on state leadership, provide flexibility, and take advantage of a wide range of energy sources and technologies. BCSE believes that if the EPA regulations are carefully crafted, not only will the use of these technologies help to reduce power plant emissions and serve as cost-effective compliance options, they will also help grow the economy, create jobs, and strengthen and diversify our energy system.

Over the past five years, the U.S. economy has continued its shift to the increased production and consumption of lower-carbon energy. Energy efficiency, renewable energy and natural gas are contributing to these changes, embedding them into the mainstream fabric of the U.S. energy economy.

Factbook Points to Ongoing Transformation of US Energy Sector – Efficiency, Natural Gas and Renewables are at the Heart

The second edition of the Sustainable Energy In America Factbook, released in February 2014, chronicles the on-going and fast-moving transformation of the energy sector in America, including year-end 2013 data. Despite some industry “detours” in 2013, lead BNEF Factbook author Michel di Capua notes that “developments in 2013 affirm these long-term trends,” for healthy renewable growth, natural gas development and increasing usage of efficiency.

Key findings of the report include:

  • The country’s total annual energy consumption in 2013 was 5.0% below 2007 levels, due in large part to advances in energy efficiency.
  • In 2013, natural gas-fired power plants provided 28% of US electricity, (as compared to 22% in 2007) and renewable electricity generation provided 12.9% (8.3% in 2007).
  • The more efficient use and use of cleaner sources of energy have combined to put the US carbon emissions on a long-term trajectory, more than half-way (9.8%) towards the national 17% reduction target by 2020.

For the first time, the 2014 edition of the Factbook looks at regional and state trends in deployment of sustainable energy. It continues to provide industry and technology-specific analysis in an easy-to-use format, including: Energy Efficiency, Natural Gas, Renewable Energy and Alternative Fuel Vehicles, Biomass/ Waste-to-Energy, Carbon Capture and Storage, Combined Heat and Power, Fuel Cells, Hydropower, and Smart Grid.

The Factbook is a tool that is designed to be used by policy-makers, reporters, and industry executives. Since its release in February, the BCSE has been presenting the Factbook to top policy-makers in the Administration, on Capitol Hill and at the state-level, as well as other stakeholders. Download your copy of the Factbook today on the BCSE website.