Make or Break Opportunities for Advanced Energy in the New Year

Posted by Malcolm Woolf on Jan 3, 2018 2:04:28 PM

New Years Eve 2018 Disney ABC Television Group-711.jpg

Image by Disney/ABC Television Group, used under Creative Commons license

What does 2018 hold for advanced energy? Plenty, when it comes to federal and state policy issues that could make or break business prospects for advanced energy companies. I hope all you advanced energy advocates are well rested, as the new year is going to be a busy one! Here is what we at AEE see on the policy horizon, with some opportunities – and battles – coming sooner than you’d think.

At the federal level, the year starts off with three major deadlines in the first month alone. January 10 is when the Federal Energy Regulatory Commission’s must respond to Energy Secretary Perry’s “grid reliability and resilience pricing” proposal, which would subsidize generators that are able to store 90 days of fuel onsite (e.g., coal and nuclear power). AEE and its allies across the industry have criticized the proposal as imposing a multi-billion-dollar energy tax on businesses and households to solve a problem that doesn’t exist. With Chairman McIntyre taking the helm just a few weeks ago, this decision is an early test of the FERC’s ability to maintain its independence and continue its 25-year legacy of protecting competitive markets, notwithstanding significant political pressure from the Trump Administration to throw a lifeline to its political supporters.

Funding for the Federal government expires the following week, on January 19. While it’s likely that a government shutdown will be avoided, the fate of the advanced energy tax extenders package is less certain. The tax credits for so-called “orphan technologies” (including fuel cells, geothermal, and combined heat and power) left out of the deal that extended credits for wind and solar two years ago were once again excluded from December’s historic tax overhaul, as were tax credits for energy efficiency, advanced nuclear, and carbon sequestration. Senate Finance Committee Chairman Hatch (R-UT) introduced legislation on December 21 to extend these and other expiring tax credits, with most of his Republican Committee colleagues as co-sponsors. AEE sees the federal government spending package as the last, best opportunity to resolve an issue that has hampered the industry since 2015.

The following week, January 26, is the deadline for President Trump to act on the Section 201 petition to impose tariffs on imported solar panels and modules. In response to the case brought by two foreign-owned companies (Suniva and Solar World, both currently in bankruptcy), the judges on the US International Trade Commission recommended tariffs of up to 35% – much less than requested by the petitioners, but still a big cost increase for consumers. The Advanced Energy Buyers Group has weighed in throughout the process, countering claims that demand for solar is not price dependent. The Buyers Group also stressed that undue tariffs would harm customers in other ways, as the existing domestic suppliers do not have the capacity to meet the fast-growing market demand for solar power. Opposition to trade sanctions has brought together almost all of the solar supply chain with unusual allies such as Heritage Foundation, ALEC, and Sean Hannity, as the entire industry awaits President Trump’s decision.

And that’s just January. Other initiatives are expected to take shape during the first quarter of 2018. President Trump has promised to reveal his much-anticipated infrastructure bill, which could jump-start new energy investments. Several FERC Commissioners have also said that they will finalize their proposal to remove barriers impeding storage and aggregated distributed energy resources in the first quarter. In addition, given the reduction in corporate tax rates, many anticipate a new effort to reduce electric utility rates to ensure that businesses and homeowners share in the benefits of lower taxes on utilities.

2018 will also be a pivotal year for advanced energy at the state level. Will Ohio, with its aging electric infrastructure, subsidize its uneconomic coal and nuclear plants, or choose to embrace advanced energy? After Gov. Kasich’s 2016 veto of a bill that would gut the state’s renewable energy and energy efficiency standards, many are looking for a more balanced approach to modernize the Buckeye State’s grid – including the state’s leading health care institutions.   

Virginia is another state at the crossroads. Governor-elect Northam, who will be sworn in January 13, has pledged to finalize Gov. McAuliffe’s proposal to cut carbon dioxide from power plants by linking Virginia to the existing Regional Greenhouse Gas Initiative, which currently comprises nine northeastern states. AEE served as an industry representative on the advisory panel that developed the proposal. Change in the Virginia assembly following a watershed election may also create new opportunities in a state that has lagged its neighbors in advanced energy.

Of course, California remains at the leading edge of advanced energy policies. The legislature plans to resume its consideration of a 100% clean energy bill, as well as a separate bill that AEE has co-sponsored to boost electric vehicle sales in the state.

And if this isn’t enough to keep 2018 exciting, just wait until November, when 36 states will elect governors. Of these, 18 are open seats, with the incumbent either retiring or term-limited. Following success in Virginia in 2017, where AEE’s platform was embraced by the major candidates on both sides of the aisle, AEE intends to be active in many of these states to ensure that all gubernatorial candidates are aware of, and embrace, advanced energy as an economic driver.

So rest up while you can, as 2018 is going to be a busy and exciting year.

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Topics: State Policy, Federal Policy, California Engagement