Pressure on Congress for climate change bill before Dec. UN conference

After a bloated, watered-down bill on climate change and energy narrowly passed in the House of Representatives before the July 4 recess, pressure may build for Senate action before the next United Nations Conference on Climate Change in Copenhagen, Denmark in early December.

by Bob Haavind, editor-at-large, Photovoltaics World

After a bloated, watered-down bill on climate change and energy narrowly passed in the House of Representatives before the July 4 recess, pressure may build for Senate action before the next United Nations Conference on Climate Change in Copenhagen, Denmark in early December.

President Barack Obama may want to go to the Conference personally, and he will want to have something in hand, such as an enacted carbon emission reduction protocol for the US, suggested John Stanton of the Solar Energy Industries Association (SEIA) at the recent PV America conference in Philadelphia. This would help give the US standing in negotiations with the developing nations, particularly China and India, to minimize carbon emissions as their economies expand. Stanton and Jim Presswood of the Natural Resources Defense Council (NRDC) discussed some of the politics behind energy and climate change legislation as well as their groups’ goals.

A comprehensive carbon cap and trade bill is likely, they believe, because of a Supreme Court decision mandating the EPA to regulate carbon dioxide for public health reasons. This puts in place a regulatory regime, they explained, and this concerns many in Congress.

“Congress has to come up with something or the EPA will do it on its own,” Presswood suggested. The upcoming UN Conference on Climate Change may help to accelerate the process.

Nancy Pelosi pushed to get the Waxman-Markey Bill out of the House quickly — but to gain needed votes, billions of dollars in special interest favors were loaded onto the Bill, which grew from 648 to more than 1400 pages, and free permits are included for a huge amount of present utility emissions. While the original bill pushed for a 25% carve out of electricity generation from renewable energy sources by 2025, and environmentalists fought to get it to 20% even sooner, the final bill compromised on a standard of only 15% by 2020.

On the Senate side, the Environment and Public Works Committee headed by Barbara Boxer, kicked off hearings on climate change right after the July 4 recess. But getting a bill passed before December would be “lightning fast” for the Senate, which is a much more deliberative body than the House, according to Stanton and Presswood.

The utilities see renewable energy standards as unfunded mandates, Presswood explained, so they pushed for the cheapest solutions, and wind is less costly than photovoltaics. Congress is reluctant to give enhanced benefits for PV at the utility level, so it is only providing for three credits instead of one for installations of under 4MW, and 5kW for residences. Thus, under this legislation, PV would not deploy at all for large-scale generation, he said.

Congress favors PV over solar thermal, Stanton explained. One reason is that it is seen as less costly and also provides more carbon reduction. But a bigger reason is that Congress likes to meter things, and it is difficult to meter solar thermal generation. Florida Power & Light was a leader in solar thermal until it saw that because of the way utilities are regulated it was not getting credit for its efforts. Attempts to get a utility-scale allowance for solar thermal have been unsuccessful because “Congress can’t get its mind around it,” Stanton said. Still, he added, Lakeland Electric in Florida does have some solar thermal with metering to replace natural gas.

The Senate may prove less favorable to renewable energy in climate change and energy legislation, Stanton and Presswood explained, because there are more conservatives and oil, gas, and coal state members in powerful committee positions. Senator Imhoff of Oklahoma, for example, believes that the global warming scare is a hoax, and Senator Bayh of Indiana is even more of a problem for supporting renewable energy sources than Louisiana Senator Landrieu, they said.

While there is now a 30% tax credit and accelerated depreciation for capital equipment, including solar installations, cutting the period for full depreciation down to five years instead of 20 years, Congress may let this exemption lapse unless the economy is still very sluggish. They said that under this program about $100 million has been spent on solar installations that could be depreciated 50% in the first year, with the remainder over the remaining four years. But Congress will probably wait until the last minute to decide, hoping to induce potential buyers to act in the fourth quarter due to fears that the benefits might end.

The SEIA has been pushing for full retail net metering (giving homeowners credit for electricity generated by solar installations) and adoption of interconnect standards for the electric grid at a national level, and they want the Department of Energy to be more involved in allowances for utilities instead of just the states, Stanton explained. However the group does not want state and local programs to be hindered or preempted by federal initiatives. The group also supports Clean Energy Innovation Centers, although it is not clear yet exactly how these would work, and a Clean Energy Bank. Stanton said the SEIA would like to see a Clean Energy Deployment Administration under DOE, but he does not believe this will happen this year.

Both speakers emphasized that even though legislation emerging from Congress might be far short of the goals of their organizations, they would still support it with the view that the initial foundation could be built upon in later years.

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