Senator Manchin struggles to find common ground

From the Article by Karl Evers-Hillstrom, The Hill News Service, August 13, 2022

Coal country is still reeling from Sen. Joe Manchin’s (D-W.Va.) decision to back a sweeping climate and energy package that will accelerate the nation’s transition away from coal.

In the Mountain State, the once-burgeoning coal industry says it feels betrayed, displaced coal workers are celebrating the bill’s black lubenefits and Republicans seeking Manchin’s seat in 2024 are licking their chops.

The Inflation Reduction Act includes several Appalachia-centric measures, including subsidies to build renewable energy projects on former coal fields and the permanent extension of a tax on coal companies that funds benefits for miners suffering from black lung disease.

Advocates who fought hard for the black lung fund extension — they warned Manchin that the benefits were at risk when the excise tax expired last year — hailed its inclusion as a breakthrough victory for workers who don’t typically wield influence in Washington.

“We were surprised. We thought it’d be a four-year or 10-year [extension],” said Gary Hairston, a former West Virginia coal miner of 27 years who now leads the National Black Lung Association. “So, when we got it permanently, we might not need to worry about it no more.”

The coal industry, on the other hand, attacked Manchin for making the tax permanent and pushing policies to subsidize alternative energy sources. Leaders of Appalachian coal groups, including the West Virginia Coal Association, wrote in a recent letter that the excise tax will cost them tens of millions of dollars and hurt their ability to compete and keep energy costs stable. “This legislation is so egregious, it leaves those of us that call Senator Manchin a friend, shocked and disheartened,” they wrote.

Backlash from the coal industry, conservative groups and GOP lawmakers has opened up an opportunity for political challengers ahead of Manchin’s upcoming reelection battle. Rep. Alex Mooney (R-W.Va.) is running television ads accusing the Democratic senator of crossing the state’s coal industry, an apparent signal that he plans to challenge him in 2024. “Alex Mooney won’t let Joe Manchin and Joe Biden destroy our coal industry and devastate West Virginia,” the ad tells viewers.

Cecil Roberts, a longtime Manchin ally who leads the United Mine Workers of America, the nation’s largest coal miners’ union, called those critiques “absolute bull” in a recent statement. He noted that the bill includes tax credits for carbon capture that could extend the life of coal plants and authorizes $4 billion in tax credits exclusively for companies that create new clean energy jobs in coal communities. “I cannot understand how any politician who actually cares about working West Virginians and the quality of their lives can trash this bill,” Roberts said. “They should be thanking Senator Manchin, not attacking him.”

In a response to the West Virginia Coal Association, Manchin noted that the excise tax has consistently been extended at the same rate for nearly four decades and said that coal companies can take advantage of a $5 billion fund in the climate bill to boost their efficiency. “The big pushback I’m getting from the coal operators right now is having to pay the black lung fund, and that’s a shame,” Manchin told reporters on a recent conference call.

Manchin added that despite his best efforts to boost coal, its prevalence has declined under both Democratic and Republican presidents, indicating that his state needs to take advantage of emerging energy technologies to keep up. Hundreds of coal-fired power plants have shut down over the last decade amid the emergence of cleaner and more efficient energy sources, causing pain for Appalachia’s coal mining companies.

At its peak, the West Virginia coal industry employed more than 125,000 employees, a figure that dropped to less than 12,000 in addition to 36,000 independent contractors, according to estimates from the West Virginia Office of Miners’ Health, Safety and Training.

While they’ve been slow to adopt clean energy policies, West Virginia legislators in recent years passed bills to boost solar projects despite opposition from the coal industry.

The Nature Conservancy and West Virginia Chamber of Commerce released a survey last year finding that most West Virginians believe that the state should reduce its reliance on coal and shift to renewable energy sources, a significant shift in public opinion.

“This is a traditional energy state, but folks in West Virginia are also interested in looking at what the new energy economy can bring to the state in terms of jobs, and economic development and economic diversification,” said Thomas Minney, West Virginia state director at the Nature Conservancy.

As part of his climate deal, Manchin also secured an agreement from Senate Majority Leader Charles Schumer (D-N.Y.) that Democrats will pass legislation to expedite approval of the Mountain Valley Pipeline, which spans hundreds of miles in West Virginia and Virginia. Manchin says the natural gas pipeline, which has drawn opposition from local environmental and property rights advocates, would create 2,500 jobs in his home state and help make up for coal’s decline.

Still, it’s not clear whether deep-red West Virginia will embrace Manchin’s climate deal, given that his popularity soared around the time that he told Democrats he couldn’t support the $2 trillion Build Back Better Act.

From the first quarter of 2021 to 2022, Manchin’s approval rating shot up 17 points to 57 percent, the biggest increase among all senators over that period, according to Morning Consult. Nearly 7 in 10 West Virginia Republicans expressed support for the Democratic senator as he railed against his own party’s spending package.

QUOTATION ~ Change is inevitable in life. You can either resist it and potentially get run over by it, or you can choose to cooperate with it, adapt to it, and learn how to benefit from it. Jack Canfield.

Virginia environmental groups call for a declaration of climate emergency & protest the Mountain Valley Pipeline in Richmond (8/2/22)

From an Article by Sarah Vogelsong, Virginia Mercury, August 2, 2022

A deal between Democratic congressional leadership and West Virginia Sen. Joe Manchin III over sweeping federal climate legislation could force the completion of Mountain Valley Pipeline, according to a one-page summary of the agreement’s provisions obtained by The Washington Post.

The final item on the summary reads: “Complete the Mountain Valley Pipeline.”

Since the surprise 11th-hour deal between Senate Majority Leader Chuck Schumer and the Democratic Manchin resurrected President Joe Biden’s climate change agenda last week, Virginia environmental groups and many landowners in the state’s southwestern region have been waiting uneasily to learn the agreement’s terms.

Numerous national news outlets reported that Manchin’s support was linked to promises by Democratic leaders to pass separate legislation smoothing the fraught federal permitting process for fossil fuel pipelines such as Mountain Valley, a 303-mile-long conduit planned to carry gas from the Marcellus shale fields of West Virginia into Virginia.

The summary released Monday, which a Manchin spokesperson confirmed Tuesday reflects the provisions the senator is seeking, offers the clearest look yet at what those promises are. For Mountain Valley, the asks are twofold: First, require federal agencies “to take all necessary actions to permit the construction and operation” of the pipeline. Second, transfer jurisdiction over legal cases concerning the pipeline from the Richmond-based 4th Circuit Court of Appeals to the D.C. Circuit.

Lee Williams, director of Green New Deal Virginia and advocacy chair of the Richmond-area Falls of the James chapter of the Sierra Club, reacted to the proposal with dismay. Environmental groups “want everything” that’s in the federal climate bill known as the Inflation Reduction Act of 2022, she said. “We’ve been asking for it for the last decade. Unfortunately, to get Sen. Manchin to vote for it, they literally threw Southwest Virginia under the bus.”

Exactly what Democratic leaders promised Manchin, however, remains unclear. Despite the one-page summary that has been released, Virginia Sen. Tim Kaine (D) said during a Tuesday teleconference that “there is no connection between voting on the Inflation Reduction Act and then having to vote for the Mountain Valley Pipeline or a permitting bill.” Also, “The deal was (that) in exchange for getting an agreement on the Inflation Reduction Act, we will have the opportunity to debate and vote on permitting improvements, but no one’s made commitments about how they’re going to vote, and I’m certainly not going to make a commitment until I see what that bill is,” he said.

Valeria Rivadeneira, a spokesperson for Virginia Sen. Mark Warner (D), said the senator would review the proposal “once the full legislative text is made available.”

Originally expected to be completed by 2018, Mountain Valley Pipeline has been hampered by staunch opposition in both Virginia and West Virginia, hundreds of environmental violations and a string of successful legal challenges in the 4th Circuit that have repeatedly stripped the project of necessary federal permits. Construction has proved especially halting along a Southwest Virginia corridor that crosses through part of the Jefferson National Forest in Giles, Craig and Montgomery counties.

This summer, with few immediate breakthroughs evident, the developers sought permission from the Federal Energy Regulatory Commission, which has authority over pipeline construction, to extend its deadline another four years.

With delays and costs mounting, investors have become increasingly skeptical that the pipeline will ever be completed. In a February filing with the Securities and Exchange Commission, project investor NextEra Energy wrote that “continued legal and regulatory challenges have resulted in a very low probability of pipeline completion.”

The deal with Manchin could change all that. Amid news of the agreement, shares in lead pipeline developer Equitrans Midstream soared to a three-month high Tuesday.

“MVP is being recognized as a critical infrastructure project that is essential for our nation’s energy security, energy reliability, and ability to effectively transition to a lower-carbon future,” Equitrans spokesperson Natalie Cox wrote in an email.

More than 300,000 miles of natural gas pipelines exist in the U.S., she noted in a lengthy statement. “None of these existing pipelines have undergone the extensive level of environmental research, analysis and review that has been performed on the MVP project.”

The reforms to the federal energy permitting process outlined in the summary document, which would include timelines for permitting reviews and a statute of limitations for court challenges, leave Virginia environmental groups in a tight spot. Organizations that last week hailed the sudden reappearance of federal climate action are now left scrambling to decide whether they can swallow a deal that includes Mountain Valley Pipeline, a project many have spent years opposing.

“We’re not going to sit by and roll over and let Southwest Virginia be a sacrifice zone,” Williams told the Mercury Tuesday after leading a demonstration in downtown Richmond calling on Biden to declare a climate emergency, one of many organized by activists nationwide. “But we don’t want to blow up the deal. It’s a fine line.”

We don’t want to blow up the deal. It’s a fine line. Some groups have already come out in opposition.

“We firmly oppose any approach by Congress that sacrifices frontline communities as part of a political bargain,” said Jessica Sims, Virginia field coordinator for environmental and economic development nonprofit Appalachian Voices, in a statement. The group’s North Carolina field coordinator, Ridge Graham, called any legislation requiring completion of Mountain Valley “unacceptable.”

But others were reluctant to speak on the record, indicating they are still sorting out their stances in a rapidly evolving situation.

Regardless of the Manchin deal, Kaine on Tuesday emphasized the need for reforms to federal pipeline permitting, saying he thought FERC’s initial review of Mountain Valley had been “shoddy.” Also, “I view many of the controversies that are connected with the Mountain Valley Pipeline as having been sort of stoked by an inadequate federal permitting process through FERC,” he said, citing “in particular the unwillingness or inability of FERC to get information out to the public and appropriately take public comment and then take that into account in terms of deciding (a) whether a pipeline was necessary and (b) whether the proposed route was the right route.”

A spokesperson later said that Sen. Kaine believes improving permitting “is preferable to having members of Congress decide outcomes on individual energy infrastructure projects.”

Both Kaine and Warner, as well as Virginia Rep. Morgan Griffith, R-Salem, have previously proposed federal legislation to change the federal review process for proposals and clarify when eminent domain can be exercised. Those bills were crafted in response to not only Mountain Valley Pipeline but the Dominion Energy and Duke Energy-backed Atlantic Coast Pipeline, which would have stretched from West Virginia to North Carolina via Virginia but was canceled in July 2020.

Distributed Energy Resources (DERs) may be accepted sources of power

Article by Jeff St. John, Green Tech Media, September 17, 2020

The Federal Energy Regulatory Commission has passed a long-awaited order to open up the country’s wholesale energy markets to distributed energy resources (DERs) like rooftop solar, behind-the-meter batteries and electric vehicles.

Now comes the hard part: creating market rules that allow these DERs to play in bulk energy markets while retaining the role of state regulators and utilities to maintain the soundness of their distribution grid operations and retail DER programs.

Order 2222, passed by a 2-1 vote Thursday during FERC’s open meeting in Washington, D.C., is the culmination of years of work on how to allow DER aggregations to compete in the energy, capacity and ancillary services markets operated by the regional transmission organizations (RTOs) and independent system operators (ISOs) that manage the transmission grids carrying electricity to about two-thirds of the country.

The new order is an outgrowth of FERC Order 841, passed in 2018 to set similar rules for batteries and other energy storage systems to serve in wholesale markets. But with its much broader scope, Order 2222 could have an even more profound impact on the value of DERs in U.S. markets, as well as the operations of its wholesale markets.

“DERs can hide in plain sight in our homes, businesses and communities, but their power is mighty,” FERC Chairman Neil Chatterjee said at Thursday’s meeting. Projections indicate that from 65 gigawatts to more than 380 gigawatts of DERs could be added to the country’s power grids over the next four years, he noted.

“Today’s order is designed to capitalize on those shifts,” he said. “[It] will help us increase competition and efficiencies in our markets. It will enhance grid flexibility and reliability attributes. And it will stimulate the kind of innovation that’s needed to keep pace with our ever-evolving energy demand.”

DERs do participate in wholesale energy markets today, but almost exclusively under traditional demand-response constructs that limit their full effectiveness, he said. This status quo represents a violation of FERC’s responsibility to assure “just and reasonable” rates for electricity consumers, which serves as the basis of issuing the new order, according to Chatterjee.

Aggregated rooftop solar, batteries, EV chargers, grid-responsive water heaters and air conditioners, and other DERs can be installed much more quickly than large-scale resources in locations where “price signals indicate they’re most needed,” driving down congestion costs and reducing market inefficiencies that add to customers’ electricity bills, Chatterjee said.

They’re also “more nimble,” with inverters and software controls that allow them to “serve multiple functions” and “meet various grid needs as they arise,” he said. Batteries, EV chargers and other fast-acting resources have already proven their ability to regulate grid frequencies and deliver localized capacity in utility pilot projects across the country.

A big challenge: Merging distribution grids and retail programs with wholesale markets

But much like Order 841, the new DER order ushers in a complex set of challenges for grid operators, utilities and state regulators to align the rules for operating behind-the-meter assets connected to low-voltage distribution grids to those governing bulk markets.

Those cross-jurisdictional complications have already drawn the opposition of state regulator and utility groups. In June, a federal court denied their efforts to challenge Order 841 on the grounds that FERC can’t impose rules on DERs connected to distribution grids under state regulations. The court also denied a request for states to be able to “opt out” of participating in Order 841-created markets.

That court victory has given FERC confidence to assert broad authority over how DERs beyond energy storage assets can take part in wholesale markets under Order 2222, Chatterjee said. For example, the order doesn’t offer states the option of opting out of the market structures that ISOs and RTOs will create to comply with it.

But it does offer small utilities — those whose annual electricity sales are below 4 million megawatt-hours — an opportunity to decide not to opt into those markets, to avoid “overburdening them” with the costs and complexities of complying, Chatterjee noted.

And much like Order 841, the new DER construct will give states and utilities “the authority to oversee the interconnection of individual DERs,” he said. That’s a key concern, given that DERs have significant impacts on distribution grid operations and reliability.

Order 2222 also requires RTOs and ISOs to “establish a comprehensive process ensuring distribution utilities can review the individual DERs that [are the constituent parts of] an aggregation,” Chatterjee said. “We understand the importance of real-time coordination to guarantee safe and reliable operations of both the transmission and distribution systems.”

Finally, FERC’s order will allow state regulators to set up rules to avoid the market distortions that could arise from DERs earning money for the same services simultaneously from utility retail programs and wholesale markets, he said.

FERC Commissioner Richard Glick, a Democrat who has opposed Chatterjee and FERC’s other Republican commissioners on many issues, including capacity market rules for mid-Atlantic grid operator PJM and New York grid operator NYISO that are expected to have a negative impact on clean energy resources, offered his full support of Order 2222.

With DERs becoming a more and more integral part of the country’s electric grid, “options for the supply of energy, capacity and ancillary services will increase” as the ruling is implemented, he said. Order 2222 will also “enhance reliability as ISO and RTO operators will have greater visibility into behind-the-meter” DERs, something they lack today, he pointed out.

The next steps in sequence for the new plans

Order 2222 will go into effect in 60 days, and RTOs and ISOs will have 270 days to create compliance filings on how they’ll implement it. The timeline for full implementation will likely take longer, however, given the experience with Order 841, which some grid operators have already implemented in part or in full but others are still working on.

“This is undoubtedly a game-changer, in some ways more profound than its sibling Order 841,” said Ravi Manghani, head of solar research for Wood Mackenzie. “I think the key action now moves to individual ISOs and RTOs. Each will interpret and implement tariffs based on their respective market realities.”

As for potential pushback from distribution utilities, “the order provides sufficient cover on metering and telemetry and expected jurisdictional coordination,” Manghani said.

There are certainly some complexities to be worked out, however. Allowing utilities and state regulators to manage DER interconnection rules to prevent them from destabilizing distribution grids through wholesale market operations could present challenges for ISOs and RTOs. So could state regulator rules seeking to differentiate between retail and wholesale market participation.

Clean energy groups including the Solar Energy Industries Association, Advanced Energy Economy and the American Council on Renewable Energy (ACORE) expressed support of FERC’s new order in Thursday statements.

“Integrating aggregated DERs will lower consumer costs, increase electric reliability and unlock the potential for new innovation,” Gregory Wetstone, ACORE president and CEO, wrote. On the other hand, FERC’s orders for PJM’s and NYISO’s capacity markets “erect barriers to the entry of new technologies” in those markets, he said — a fact that could bear on how state-supported, carbon-free DERs are valued in them.

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See also: ‘Game-changer’: FERC order opens door for renewables, Arianna Skibell, E&E News, September 18, 2020

PJM Grid Generation Outlook to 2040

From an Article by Chloe Holden, Green Tech Media, May 20, 2019

Solar and wind have struggled to compete against a flood of cheap natural gas in the largest U.S. wholesale power market, operated by PJM, the Pennsylvania-Jersey-Maryland Interconnect System which includes the electrical grid in the middle Atlantic states even WV, Ohio, Indiana, and VA.

Interconnection queue requests across all the major North American markets show that over 90 percent of new requests now consist of solar, wind and storage. This is the result of state-level policies and declining costs.

Even in PJM, where natural gas has dominated the generation queue, new requests are now giving way to wind, solar and battery storage projects. (PJM is the country’s leader for front-of-the-meter storage, though it will likely be overtaken by California in 2020.)

However, as utilities replace retiring coal assets in PJM, coal capacity has been replaced at almost a one-for-one rate with new combined-cycle natural-gas generation. Over the last several years, 29 gigawatts of retiring coal plants in PJM have been replaced with 23 gigawatts of natural gas, according to a recent Wood Mackenzie Power & Renewables webinar.

PJM Generation Outlook (GW) is shown the color graphic insert above.

PJM’s natural-gas plant building boom has been centered in northeast Pennsylvania, with additional recent activity in southwest Pennsylvania, West Virginia and eastern Ohio, near natural-gas resources. Operation costs are low and gas supplies plentiful, driving the cost of electricity down.

Because of this plentiful natural gas, wind and solar are not yet competing with natural gas on price in PJM when it comes to replacing coal. Wood Mackenzie’s analysts contrasted PJM with Texas’ ERCOT territory, where wind and solar dominate the generation queue.

In ERCOT, plenty of coal plants have been retired, including 4 gigawatts in 2018 alone. Prices in ERCOT’s energy-only market are not consistently high enough to make the market attractive for new natural-gas development. Wind and solar are picking up the slack; even small solar installations under 1 megawatt have flourished, nearly doubling capacity in just two years from 2016 to 2018.

With PJM’s natural-gas boom in full swing, will the region be locked into natural-gas generation for the lifetime of today’s new plants?

Wood Mackenzie analysis for 20 years out suggests gas will continue to make up around 40 percent of the generation mix, barring dramatic changes to how the energy mix is determined. Resources still must compete in an open market, and PJM holds a forward capacity auction three years in advance. (This year’s 2022/2023 Base Residual Auction will be held in August 2019.)

While front-of-the-meter renewables struggle to gain ground relative to natural gas in PJM due to low prices, one area to keep an eye on is flexibility and distributed energy resources in PJM. Organizations like the Solar Energy Industries Association argue that to level the playing field in PJM, grid operators will need to evolve power markets in order to take advantage of “inverter-based resources.”

Distributed Energy Resources (DERs)

Recent developments have shown what’s possible, as changes to wholesale markets are poised to bring more storage and DERs into the mix in the independent system operator and regional transmission organization footprints. FERC Order 841 has nudged market operators to take a closer look at storage, although the commission still has to rule on the pending DER proceeding.

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See Also: PJM and Argonne National Laboratory Collaborate to Study Guidelines for Solar Resources, PJM News Release, April 2, 2019

From Dominion Energy Virginia’s 2018 Integrated Resource Plan

From an Essay by Ivy Main, Power for the People VA, May 22, 2019

Recently I criticized a Dominion Energy advertisement that boasted, misleadingly and inaccurately, about the company’s investments in solar energy.

By contrast, the company’s investments in greenwashing are transparent and heartfelt. Dominion has suffered through several bad months here in Virginia and would very much like to change the conversation.

Indeed, the company’s problems keep mounting. In the course of just two days this month, SCC commissioners lit into the company for telling Wall Street one thing and regulators another; the corporate customers behind Virginia’s data center boom filed a letter saying they want no part of Dominion’s fracked-gas build-out; and a coalition of libertarian, environmental and social justice groups called for a breakup of Dominion’s monopoly.

Fortunately, Dominion’s PR offensive was only just ramping up. A full-page newspaper ad, predictably light on detail, promises the company will cut its climate-heating methane emissions in half. That would be a nice trick from the company whose Atlantic Coast Pipeline will be responsible for more greenhouse gas emissions than all Virginia’s power plants put together.

In case you doubt the company’s sincerity, Dominion just joined a corporate coalition calling for a price on carbon. This must have been in the works about the same time Dominion was criticizing Virginia’s proposed entry into the Regional Greenhouse Gas Initiative, which actually puts a price on carbon.

Hey, The Washington Post fell for it. Greenwashing works.

And that brings us to the (literally) incredible claim that recently appeared in Dominion Energy’s Twitter feed: “The future of our planet depends on clean energy, which is why more than 85% of our generation comes from clean energy sources such as solar.”

Let us pause for a moment to reflect that this tweet comes from a company whose solar generation amounts to a rounding error.

Dominion Energy Virginia’s most recent Integrated Resource Plan includes a handy pie chart revealing what is actually in its energy mix:

Nuclear: 33% — Natural gas: 32% — Coal: 18% —
Purchased (wholesale) power: 10% (that’s coal and gas)
Non-Utility Generation (purchased under contract): 5% (more coal)
Renewable: 2% (almost all hydro and biomass, plus a smidgen of solar) and Oil: 0%

Now, it is true that Dominion Energy the holding company owns more generation than Dominion Energy Virginia the electric utility. For one thing, it just bought another utility in South Carolina. According to the information Dominion provided to investors in March, its South Carolina generation looks like this:

Natural gas: 39% — Coal: 36% — Nuclear: 21% — Hydro: 3%

Nobody looking at these figures could find a basis in reality for a claim of 85% clean energy. It is so preposterous that I just have to ask: Why only 85%?

I mean, seriously, if you have traveled this far into the realm of fantasy, why not claim 100%? Or heck, with a nod to Spinal Tap, why not 110%? Clearly the people making this stuff up are rank amateurs.

All of which is to say: come on, Dominion, you can do better.

Major Job Losses in Renewable Energy if Current Tax Plan Passes

Source: Renewable Energy

From an Article by Steve Clemmer, Union of Concerned Scientists, December 14, 2017

In March 2017, I testified before the House Energy and Commerce Committee on how federal tax credits for renewable energy have been a key driver for the recent growth in the U.S. wind and solar industries, creating new jobs, income and tax revenues for local communities. They have also helped drive down the cost of wind and solar power by more than two-thirds since 2009, making renewable energy more affordable for consumers.

Originally enacted as part of the Energy Policy Act of 1992, Congress has extended the Production Tax Credit (PTC) seven times and has allowed it to expire on six occasions. This “on-again/off-again” status resulted in a boom-bust cycle of development in the wind industry. In the years following expiration, installations dropped between 76 and 93 percent, with corresponding job losses. Congress has also extended the Investment Tax Credit (ITC) for solar several times.

Finally, after many years of this policy uncertainty, Congress passed a five-year extension and phase-down of the PTC and the ITC for wind and solar in December 2015. The legislation also removed the longstanding U.S. oil export ban, as part of a compromise deal with the oil industry.

Unfortunately, the Senate and House tax bills would renege on this deal and change the rules midstream, resulting in major job losses across the U.S. renewable energy industry. They would also jeopardize tens of billions in investments in renewable energy projects and manufacturing facilities in rural communities across America—many of which are in districts and states held by Republicans and that voted for President Trump.

Senate Tax Bill Undermines Renewable Energy Financing

The renewable energy industry initially praised an earlier version of the Senate tax bill, which honored the 2015 deal and did not make any direct changes to the PTC and ITC. However, the Senate made two last-minute changes to the bill to fill revenue gaps and build support from key Republicans that were concerned about the deficit that would have a significant impact on renewable energy projects.

Alternative Minimum Tax (AMT): One of these last-minute changes was to restore the AMT to fill a $40 billion revenue gap. The proposal in both the Senate and House tax bills to reduce the corporate tax rate to 20 percent would likely move most U.S. corporations from the regular corporate income tax rate to the AMT (which is also set at 20 percent on a broader tax base), according to tax experts.

However, not all tax credits count toward the AMT and depreciation must be calculated at a slower rate. While the ITC for solar projects can count toward the AMT, the PTC for wind projects (and geothermal, biomass, landfill gas and incremental hydro projects) can only count for the first 4 years out of the 10-year window that projects are eligible to receive the tax credits. Not only would this jeopardize investment in new projects, it would have a retroactive impact on existing projects placed in service after 2007 that are still receiving tax credits under the PTC.

Base-Erosion Anti-Abuse Tax (BEAT): The Senate also made a last-minute change to the BEAT provision that could greatly reduce tax equity financing for renewable energy projects. BEAT would impose a tax on large corporations that make cross-border payments by requiring them to add those payments to their taxable income. This amount is then multiplied by 10 percent to determine what they owe to the government (except for banks and security dealers, which the Senate raised to 11 percent). These corporations must also calculate their regular tax liability minus any tax credits they receive, including the PTC and the ITC. If their adjusted tax liability is less than the fraction of their taxable income with the cross-border payments, the company would have to pay the difference to the IRS as a tax.

The more tax credits a company has, the more a company is likely to pay, making banks and other large tax equity investors reluctant to finance renewable energy projects. And like the AMT, the BEAT provision would not only impact financing for new projects but could have a retroactive effect on most existing projects that received tax equity financing.

Bloomberg New Energy Finance (BNEF) claims that the Senate bill could threaten $12 billion in annual tax equity financing in 2017, up from $7.3 billion in 2013 (see Figure). They estimate that tax equity financing accounted for 21 percent of the $58.5 billion in total U.S. renewable energy investment in 2016.

The Senate tax bill would have a big impact on companies like JPMorgan, Bank of America, GE, US Bank and Citigroup that led tax equity financing in 2016 for both wind and solar projects, as shown in this BNEF chart.

The BEAT provision would also hurt other energy sources that currently receive tax credits such as refined coal facilities placed in service by December 2011. The coal industry is also speaking out against the AMT, which Bob Murray claims will cost his company $50-60 million in increased taxes and eliminate 65,000 jobs.

House Bill Puts 60,000 Wind Industry Jobs and $50 Billion in New Investment at Risk

While the House bill does not include the AMT or BEAT provisions, it makes several direct changes to the PTC and ITC that would undermine investments in new wind and solar projects and have a retroactive impact on existing projects. These changes include:

• Eliminating the inflation adjustment for the PTC, reducing its value by 38 percent from 2.4 c/kWh under current law to 1.5 c/kWh.

• Changing the commence construction provision, dropping safe harbor provision, and requiring projects to have “continuous construction” to be eligible, which would greatly accelerate the PTC phase-down schedule. When combined with the change to the inflation adjustment, the American Wind Energy Association estimates these two provisions could reduce the value of the PTC by more than half.

• Allowing the permanent 10 percent solar ITC to sunset in 2027.

• Extending the tax credits to “orphan” technologies like geothermal, biopower, landfill gas, and incremental hydro that were largely left out of the 2015 deal to extend the tax credits for wind and solar for 5 years. This is the only positive change in the House bill.

The House bill would cut new wind development by more than half by 2020, according to both Bloomberg and Goldman Sachs. The American Wind Energy Association estimates that the House bill would put 30,000 MW of new wind projects that are under development in the U.S. worth $50 billion of new private investment at risk, along with 60,000 jobs, as shown in this map.

American Wind Energy Association, Protecting American wind workers during tax reform

Making Renewable Energy a Priority in Conference Committee

The provisions in the House bill that renege on Congress’ 2015 compromise deal with the oil industry and drastically cut the value of the PTC are completely unacceptable and should be dropped. The AMT and BEAT provisions in the Senate bill should either be dropped (they are not included in the House bill) or renewable energy tax credits should be excluded—similar to how R&D; tax credits are currently excluded from the BEAT provision.

House and Senate conferees were named last week. They will meet over the next two weeks to resolve key differences, with the goal of delivering a final bill to President Trump by the end of the year.

It is an ominous sign that Sen. Grassley (R-IA), a senior member of the Senate Finance Committee, was left off the conference committee. As the father of the PTC, who represents a state that ranks second in installed wind capacity, he has been outspoken about honoring the 2015 deal and working to fix the problems in the Senate and House tax bills. “The wind energy production tax credit is already being phased out under a compromise brokered in 2015. It shouldn’t be re-opened,” Grassley said.

Pro-renewables Senators like Grassley and Susan Collins (R-ME) will have a tough vote to make on the Senate floor if these damaging provisions are not addressed in conference. Maine, for example, has more than 900 MW of existing wind capacity and nearly 300 MW of new solar and wind under development that is potentially at risk.

But there are conferees who represent states with large renewable energy industries, and they are in unique position to make the changes necessary to keep that clean energy momentum going.

• Conferees like Sen. Thune and Rep. Noem from South Dakota, where a wind turbine blade manufacturer from Aberdeen just announced they will be closing and laying off more than 400 people, citing the federal tax bills as one of reasons for this decision. “It’s apparent that the new tax bill will cause some economic disruption and this is one of them,” according to Aberdeen Mayor Mike Levsen. “It’s what happens when government policies turn against industries. It discourages investment.” South Dakota also has 960 MW of wind projects currently under development, representing $1.6 billion in new investment, that is at risk.

• Sen. Murkowski (R-AK) has also said that fixing the BEAT and AMT provisions in the Senate bill will be “clear priorities” for lawmakers in conference

• Sen. Portman (R-OH) is from a state with a strong renewable energy supply chain, including 5,831 solar jobs at 189 companies and more than 2,000 jobs and 61 manufacturing facilities in the wind industry. Ohio also has 560 MW of new wind projects under development and $900 million in new investment that is at risk.

• Other conferees from leading renewable energy states such as Texas, California, Illinois, Washington and Oregon would also experience significant job losses.

The U.S. renewable energy industry has a proven track record of creating new jobs and making new investments in states and rural areas across America. Federal tax reform should encourage rather than discourage U.S. investment in this rapidly growing global industry.

Make sure your members of congress know clean energy is important to you. Tell them to fix the AMT and BEAT provisions, and to leave the renewable energy tax credits alone.

Steve Clemmer is the director of energy research and an expert on the economic and environmental benefits of implementing renewable energy technologies and policies.

Speaking of Carbon Action ASAP

A Conservative Case for Climate Action

Opinion: Op-Ed Contributors

From Commentary by Martin S. Feldstein, Ted Halstead, and N. Gregory ManKiw, New York Times, February 8, 2017

CRAZY as it may sound, this is the perfect time to enact a sensible policy to address the dangerous threat of climate change. Before you call us nuts, hear us out.

During his eight years in office, President Obama regularly warned of the very real dangers of global warming, but he did not sign any meaningful domestic legislation to address the problem, largely because he and Congress did not see eye to eye. Instead, Mr. Obama left us with a grab bag of regulations aimed at reducing carbon emissions, often established by executive order.

In comes President Trump, who seems much less concerned about the risks of climate change, and more worried about how excessive regulation impedes economic growth and depresses living standards. As Democrats are learning the hard way, it is all too easy for a new administration to reverse the executive orders of its predecessors.

On-again-off-again regulation is a poor way to protect the environment. And by creating needless uncertainty for businesses that are planning long-term capital investments, it is also a poor way to promote robust economic growth.

By contrast, an ideal climate policy would reduce carbon emissions, limit regulatory intrusion, promote economic growth, help working-class Americans and prove durable when the political winds change. We have laid out such a plan in a paper to be released Wednesday by the Climate Leadership Council.

Our co-authors include James A. Baker III, Treasury secretary for President Ronald Reagan and secretary of state for President George H. W. Bush; Henry M. Paulson Jr., Treasury secretary for President George W. Bush; George P. Shultz, Treasury secretary for President Richard Nixon and secretary of state for Mr. Reagan; Thomas Stephenson, a partner at Sequoia Capital, a venture-capital firm; and Rob Walton, who recently completed 23 years as chairman of Walmart.

Our plan is built on four pillars.

First, the federal government would impose a gradually increasing tax on carbon dioxide emissions. It might begin at $40 per ton and increase steadily. This tax would send a powerful signal to businesses and consumers to reduce their carbon footprints.

Second, the proceeds would be returned to the American people on an equal basis via quarterly dividend checks. With a carbon tax of $40 per ton, a family of four would receive about $2,000 in the first year. As the tax rate rose over time to further reduce emissions, so would the dividend payments.

Third, American companies exporting to countries without comparable carbon pricing would receive rebates on the carbon taxes they’ve paid on those products, while imports from such countries would face fees on the carbon content of their products. This would protect American competitiveness and punish free-riding by other nations, encouraging them to adopt their own carbon pricing.

Finally, regulations made unnecessary by the carbon tax would be eliminated, including an outright repeal of the Clean Power Plan.

Our own analysis finds that a carbon dividends program starting at $40 per ton would achieve nearly twice the emissions reductions of all Obama-era climate regulations combined. Provided all four elements are put in force in unison, this plan could meet America’s commitment under the Paris climate agreement, all by itself. Democrats and environmentalists may bemoan the accompanying regulatory rollback. But they should pause to consider the environmental value proposition.

These four pillars, combined, invite novel coalitions. Environmentalists should like the long-overdue commitment to carbon pricing. Growth advocates should embrace the reduced regulation and increased policy certainty, which would encourage long-term investments, especially in clean technologies. Libertarians should applaud a plan premised on getting the incentives right and government out of the way. Populists should welcome the distributive impact.

According to a recent Treasury Department study, the bottom 70 percent of Americans would come out ahead under a carbon dividends plan. Some 223 million Americans stand to benefit.

The idea of using taxes to correct a problem like pollution is an old one with wide support among economists. But it is our unique political moment, combined with the populist appeal of dividends, that may turn the concept into reality.

Republicans are in charge of both Congress and the White House. If they do nothing other than reverse regulations from the Obama administration, they will squander the opportunity to show the full power of the conservative canon, and its core principles of free markets, limited government and stewardship.

A repeal-only climate strategy would prove quite unpopular. Recent polls show that 64 percent of Americans are concerned about climate change, 71 percent want America to remain in the Paris agreement, and an even larger share favor clean energy. If the Republican Party fails to exercise leadership on our climate challenge, they risk a return to heavy-handed regulation when Democrats return to power.

Much better would be a strategy of “repeal and replace.” This would be pro-growth, pro-competitiveness and pro-working class, which aligns perfectly with President Trump’s stated agenda.

134 GW of Renewables Added (2015)

Renewable Energy Is Now Inevitable, Energy Secretary Says, Citing Price

From an Article by Jeff McMahon, Forbes, June 3, 2016

Climate change may have inspired the clean-energy revolution, but price has made it inevitable, Secretary of Energy Ernest Moniz said Thursday, citing plunging prices in solar, wind and efficient innovations like LED lighting.

“The discussion about climate and climate science and mitigation and adaptation is very important, but the fact is that clean energy, the clean energy scaling, has an inevitability about it following Paris,” Moniz said at the close of the 7th Clean Energy Ministerial, a San Francisco gathering of 24 energy ministers.

“This is becoming inevitable. This is the direction we’re going.”

Michael Liebreich, the founder of Bloomberg New Energy Finance, has been calling the clean-energy transition inevitable for years, saying in 2013, for example, that “the inevitable conclusion is that at some point there will be a phase change, and clean energy will be the norm, not the exception.”

Liebreich said it again Thursday in San Francisco, and Moniz adopted it. But a few things had to happen before Moniz would acknowledge the “phase change.” The first was the Paris Agreement and climate conference last December that brought together an unprecedented international coalition of nations, innovators, and financiers. Secondly, the cost of clean energy and certain energy efficient products has fallen so fast that even the plummeting oil price has been unable to halt its growth.

Moniz reviewed a few indicators he had noticed at the Ministerial:

• Power Purchase Agreements (PPAs) in the range of 3¢ to 4¢ per kilowatt hour for wind and solar energy, which have made renewables competitive. PPAs are the long-term sales contracts that set the price at which utilities buy power from energy producers. In its most recent analysis of the levelized cost of energy, last September, Lazard had wind starting at 3.2¢, solar at 4.3¢, natural gas at 5.2¢ and coal at 6.5¢. “I think we may become almost expectant about this,” Moniz said, “but if you think back a short time, this kind of development would have been viewed as completely remarkable—because it is.”

• Plunging prices for energy efficient products like LED lights. Moniz praised India’s success in reducing the price and increasing the efficiency of LEDs. The Indian government has distributed more than 50 million LEDs, using its purchasing power to drive down the price as it seeks to replace the country’s 770 million incandescent bulbs. Led lights cost about $35 just four years ago. In India, the price has fallen to about 80¢ for a 9-watt LED, Moniz said, “and the implications of that are pretty incredible.” Among those implications, low-energy LED bulbs demand less power from solar panels, extending the panels’ usefulness.

• Commitments by companies to power their operations using renewable energy, spurred in some cases by a campaign of the Clean Energy Ministerial led by Germany and Denmark. “All 3 of those elements, I think, point to the way we are seeing a scaling in this clean energy realm,” Moniz said.

Just 15 minutes after the Clean Energy Ministerial adjourned, a meeting came to order of Mission Innovation, a coalition of 21 countries (and Bill Gates) that have pledged to double financing for energy research and development. The first panel at that meeting included an inventor, a venture capitalist, a utility-workers union representative and a utility executive—Southern Company CEO Tom Fanning.

Fanning extolled an all-of-the-above energy portfolio but acknowledged the “explosive growth” of renewables. As that meeting too adjourned, Moniz said he was moving beyond Liebreich’s “inevitability” to a new phase uttered by Fanning:

“His words were ‘Can’t keep the waves off the beach,’” Moniz said. “I think that’s much better stated.”

See also: www.FrackCheckWV.net

What about WV's Integrated Resource Plans

Dear Friends in WV & elsewhere:

Help make sure West Virginia’s electric utilities put their customers first.

This year, our electric utilities will be writing long term plans, called Integrated Resource Plans, for how they will power West Virginia. The West Virginia Public Service Commission (PSC) will issue its order for the utilities to begin drafting their plans by March 31st, helping to guide utilities long-term plans.

These plans could be written in secret in corporate backrooms and continue the status quo of polluting and increasingly expensive coal-fired electricity generation — or they can be written with public input to put increasingly affordable clean energy and energy efficiency front and center. Studies have shown that there are thousands of jobs to gain and hundreds of millions of dollars to save across West Virginia through strong energy efficiency programs, but we need to continue speaking out to make clean, efficient, affordable energy a reality in West Virginia. (Reference below.)

Write the Public Service Commissioners now to let them know that you want to them to issue an order for long-term energy plans that focuses on clean, affordable energy and public participation.

Send a message to the West Virginia PSC for long-term energy planning that focuses on clean, affordable energy and public participation.

As a life-long resident of West Virginia, having grown up in Beckley, I’ve seen firsthand the effects of collusion between big business and government officials when they are not held accountable to the people they serve and represent. Corporate interests have held back development in this state by clinging to outdated, polluting technologies. As a student of economics at West Virginia University and a state activist, I’ve made it my mission to promote a truly progressive path towards safe, clean, and efficient energy policy that will lead to prosperity for all West Virginians. Will you join me in speaking out for affordable and clean energy that puts the residents of West Virginia first?

Let Public Service Commissioners Michael Albert and Brooks McCabe know that you support an effective and consumer friendly Integrated Resource Plan — send your message today!

Together, we can make a difference in the decision making process and secure an environmentally and financially sound future for all of West Virginia. By working towards an effective Integrated Resource Plan, we will help to make this a reality.

Thanks for all you do to protect the environment,

Travis Boothe
Policy Team Leader, Energy Efficiency Campaign
West Virginia Sierra Club

Reference: Save Money, Create Jobs: How Energy Efficiency Can Work for West Virginia, Optimal Energy, November 2012

See also: www.FrackCheckWV.net

WVU Sierra Club Presentation

Student presentation compares coal, natural gas, renewable energy sources

From the Article by Corey McDonald, WVU Daily Athenaeum, December 3, 2014

The Sierra Student Coalition, a student branch of The Sierra Club – the nation’s largest and most influential grassroots environmental organization – held a presentation Tuesday. The lecture compared the economic impacts of coal energy and energy created by natural gas on the mining industry, along with the potential future benefits of solar energy.

The presentation was by Grant Speer, a senior mining engineering student at West Virginia University and a member of the student coalition.

Prior to the 1990’s, coal energy was the most valuable source of energy for the country economically. However, recent economic directions have shown trends toward natural gas as a more efficient source of energy, economically speaking. “In the 90’s they further developed the combined cycle gas turbine system, which is similar to your open cycle system in your car engine,” Speer said. “That technology became more marketable which furthered investments.”

Starting around 2007, new technologies were applied to the already existing gas drilling technologies that aided in the economic significance of natural gas. These new advancements propelled investments even further for this industry.

Coal-related energy, on the other hand, has shown a declining trend economically, showing a significant reduction in shares.

“Coal-fired power generation has decreased by up to 52 percent from a 2008 high,” Speer said. “There is this so-called ‘war on coal’ that the President is waging with the EPA on coal miners that has basically been created by the mining sector. If there’s a war on coal being waged, it’s being waged by natural gas.”

Further examination into coal technologies shows costs to maintain coal usage have increased. Carbon-capture technologies along with additional regulations to emissions other than carbon – such as mercury and sulfur – have been imposed on the industry, but these regulations are not economically favorable.

“Right now there are 32 facilities that are expected to close, there’s another 36 that are on the fence,” Speer said. “They may decide transition into natural gas; for some it’s a good decision, for others it’s smart to cut their losses.”

Natural gas has its own costs as well. Many documented instances have shown a danger in pumping natural gas. Wells designed to pump natural gas have shown a tendency to fail, causing leakage into the surrounding environments, which in turn creates hazardous environmental issues, most notably to drinking water.

“While the costs and benefits between coal and natural gas remain debatable, other under-utilized energy resources remain a viable and foreseeable option that could not only become economically achievable within the next decade, but has also proved to be effective in different countries including Germany and Spain,” Speer said.

Comparing insolation graphs, Speer demonstrated the potential for Solar production for the United States. “On May 11, 2014, Germany was able to meet 74 percent of their daily demand solely on renewables, primarily solar while also using gas,” Speer said. “If the Germans are able to do it, there’s no reason we should not be able to meet the same standard here; 22.9 percent of Germany’s electrical grid comes from solar. By contrast, gas right now in the U.S. is at 25 percent. Right now the Germans are able to do with solar what we’re trying to do with natural gas.”

Speer explained while renewable energy been progressing in different countries, it has gotten off to a slow pace in the U.S., as subsidies granted by the government are more favorable toward the natural gas industry.

“According to the Energy Information Agency, in 2010 the oil and natural gas industry received over 500 billion dollars in subsidies, renewable resources got 10 billion,” Speer said.

At-home solar technologies are on the rise and are predictably a strong capital investment. “In parts of the southwest right now, the solar panels have already reached price parity with gas. They’re at 7.2 cents per kilowatt hour versus the 6.6 for coal and 6.1 for gas,” Speer said. “Once you get the proper subsidies in there – or if you take subsidies out of the coal and gas areas – it will become more economic to transition to solar.”

Speer said presenting the lecture was important to help educate those who may not know much about the issues.

“I wanted to present this to everybody because the economics of why we utilize certain fuels and not others is something the public doesn’t necessarily understand,” Speer said. “I’m opposed to burning coal but in favor of gas because I think we can do it the right way to help transition to renewables by 2050.”