WASHINGTON — Word that Sen. Joe Manchin (D–W. Va.) is open to resuming negotiations on a scaled-back version of the Build Back Better Act that he torpedoed in December buoyed speakers from Congress and the White House at the American Council on Renewable Energy (ACORE) Policy Forum Thursday.
Speakers said they hope to pass a package this spring.
National Climate Adviser Gina McCarthy reeled off a list of cost savings the bill’s clean energy investments could provide for U.S. families. For example, energy efficiency incentives could reduce home energy bills by $500 per year.
“This is what we can deliver to people,” McCarthy told an audience of almost 200 at the live event. “What’s wrong with this? Why aren’t we running as fast as humanly possible? What Congress needs [is] to get these investments on the table and to move them forward quickly. And we’re going to do whatever it takes to get these investments over the finish line.”
The Build Back Better Act contained $555 billion in clean energy tax credits and other incentives that organizations like ACORE lobbied hard for last year. The credits are critical for President Joe Biden and the industry to meet the president’s goal of a 100% decarbonized grid by 2035 and a net-zero economy by 2050.
In a string of recent media reports, the latest in E&E News, Manchin has signaled that he is still open to a reconciliation package that would include at least some of the clean energy incentives. At the same time, Manchin has said he believes responding to the war in Ukraine will require stronger “all of the above” energy policies.
Senate Finance Committee Chair Ron Wyden (D-Ore.), in an afternoon keynote delivered remotely from his Senate office, told the gathering he’s confident of having 50 votes in the Senate for his Clean Energy for America Act, which would eliminate 44 existing tax breaks and replace them with technology-neutral credits based on emission reductions.
“We will have in the future, a technology-neutral system, which was very important to Sen. Manchin,” Wyden said. “And a technology-neutral system would be tied to a very different lodestar, and that lodestar is: the more you reduce your carbon emissions, the bigger your tax savings.
“I think when Sen. Manchin says … we may need to make some additions to deal with Russia and Ukraine, I don’t think it means unraveling Clean Energy for America,” he said.
On a panel on the current state of play for energy tax credits, the name “Build Back Better” was, in most cases, strategically avoided. Rather, Will Conkling, Google’s (NASDAQ:GOOG) head of data center energy supply for the Americas, Europe, the Middle East and Africa, said the uncertainty surrounding the legislative package is making it increasingly hard for his company to sign contracts for renewable energy. Conkling said renewable energy developers “won’t even show me a price because they are so uncertain about all the different forces that are at work with that three- or four- or five-year timeline. … Will they even sign a contract today is in doubt.”
For clean energy developer Arevon, that uncertainty is being played out in supply chain delays, said Katherine Gensler, the company’s vice president of government affairs and marketing.
“Our team has spent a lot of time in the last six months renegotiating contracts and pushing schedules out into the future to try to get some alignment and a certainty about when deliveries will be made,” she said. “But it just continues to be a challenge, and there’s not a clear path.”
The Russian invasion of Ukraine has quickly become a flashpoint in political debates about U.S. energy policy. Republicans in Congress continue to slam Biden’s clean energy agenda, calling instead for more drilling on public lands and a loosening of regulations to stimulate domestic oil production. Biden and the Democrats have countered that clean energy is now even more critical for national security.
“Clean energy is a triple-edged sword right now,” McCarthy said. “It can tackle climate change. It can bring down consumer costs for everyone. And it will be the way in which we drive to national security. This is what clean energy brings to the table every day. And with this brutal war raging in Ukraine, we’re seeing just how easy it is for autocrats to use fossil fuels as weapons, unleashing volatility in our global energy markets to pursue their own agenda.”
At the ACORE event, the Ukraine discussion centered on the challenge of balancing long-term clean energy goals with the immediate need to ramp up oil and gas production to meet the domestic and foreign demand resulting from import bans on Russian petroleum.
While responding to the current emergency and ensuring our European Union allies have stable energy resources, a longer-term view is still needed, McCarthy said.
“This is an emergency that we’ll get through,” she said. “But we cannot increase our dependency on fossil fuels. … We have to have this be a short-term, emergency fix toward a longer-term effort to achieve clean energy together, that’s consistent with the [climate] commitments that both the EU and the United States” have made.
ACORE CEO Gregory Wetstone agreed that “investments to deal with that short-term need [should] be consistent with the longer term. We want to make sure that we don’t see investments in infrastructure that become stranded assets. That’s what it comes down to,” he said. “That infrastructure needs to be compatible with a clean energy transition.”
Speaking on the tax credit panel, Bobby Andres, senior policy adviser for Wyden, similarly said that the war in Ukraine and “events in Europe may actually be spurring additional desire to move on the clean energy package.” Build Back Better was “designed to tackle climate issues, was designed for decarbonization, but the design choices also are things that help address energy costs that will spur clean energy development, which will then reduce oil and gas demand, both reducing costs for consumers and allowing us to export more of those [fuels] to our allies.”
Andres said he believes a reconstituted reconciliation package is the way forward, with a late spring target for passage. The window is narrow and closing, he said. With the Senate now focused on the confirmation of Supreme Court nominee Ketanji Brown Jackson, the work session between Easter and Memorial Day may be the last chance to get the package written and passed this year.
Beginning in the summer, the mid-term elections will provide significant headwinds, with representatives and senators up for re-election focused on short-term issues of concern to their voters and reluctant to push for large, expensive legislative packages, like BBB, said Jon Bosworth, legislative director for U.S. Rep. Earl Blumenauer (D-Ore.).
“Members are potentially nervous about taking bold legislative action,” Bosworth said. But, echoing Andres, he said the clean energy tax credits and other incentives can be framed as providing a longer-term solution to current economic stressors such as inflation and high gasoline prices.
“I think we have a good case that providing more energy security and stability in the years ahead [via a reconciliation package] will reduce this type of event from happening again,” he said.
But, outside Congress, selling such ideas to voters means shifting the conversation from political to more personal perspectives, McCarthy said.
“One of the things that we’ve desperately tried to do is to change the discussion from a planetary problem to a people problem,” she said. “I want people to understand that what we’re doing matters to them and to their families. … These tax incentives, the [production tax credit] and other manufacturing tax incentives are so important because they’ll put people back to work, because they will tackle the climate crisis, because they will give us security and independence.”
While Andres remains optimistic, he also admitted that failure is possible, and the fallback position for the industry would be to once again lobby to extend existing tax credits in end-of-year legislation, as occurred in 2020.
Gensler cautioned, however, that the extender option could leave out key incentives, such as a tax credit for standalone energy storage, a top priority for her company.
Echoing McCarthy, she said, “Speed is of the essence. We should be running as quickly as possible for each of these policies. Having a reconciliation bill framework presents us with a unique opportunity to lock in long-term policies. Anything we can do to really move the ball forward expeditiously is critically important.”
Rich Heidorn Jr. contributed to this report.