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Session hosted by CPS Energy is second in a series that brings together utility execs, advanced energy CEOs, and state regulators to accelerate innovationHelping advanced energy companies understand the taxonomy of utility needs; Aligning business models and incentives so utility companies can embrace innovation that creates value for diverse stakeholders; andAssisting regulators in encouraging innovation in the electric power sector.

White Paper Outlines Three Ways to Stretch Funds for Efficiency Projects from $2.6 Billion to More Than $10.5 BillionProp 39 implementation should follow a phased-in approach, shifting from grants and technical assistance in the early years to financing mechanisms that extend the duration and impact of the program in later years.All elements of Prop 39 should seek to attract and leverage outside capital; this includes the grant-funding elements, which should require applicants to leverage additional dollars in the form of utility rebates, local bond revenues, public or private loans, or other sources.Entities with experience dealing with private markets should oversee the finance elements of Prop 39 implementation. The State Treasurer’s office currently administers a number of programs that deal directly with private markets. At the same time, other state entities may be better positioned to interact with school districts and other applicants, allowing the Treasurer’s office to focus on the finance-related elements of program implementation.Prop 39 implementation should seek to align existing and forthcoming California energy finance programs, serving as a bridge to a more comprehensive approach to financing advanced energy in California.OPTION A - The first option dedicates roughly 40% of Prop 39 revenues to leverage opportunities, generating total program value of more than $10.5 billion over 30 years. Option A dedicates approximately $1.5 billion in technical assistance and project grants, with disbursement weighted toward early delivery for readily qualified projects. This schedule recognizes that complex and more expensive projects that require sophisticated audits and planning may take longer to properly analyze and work their way through the queue.Grants for direct funding of energy improvement projects total about $1.2 billion.An innovative new Interest Rate Offset Grant (IROG), in the amount of $320 million, created as a companion to the market-rate revolving loan fund program (below). The IROG grant pays the interest costs, in whole or in part, of the loan to ensure that the loan is affordable to the public institution.A $1 billion revolving loan fund that provides capital at market rates to finance projects too expensive to be funded by direct grants and $100 million in credit enhancements to facilitate the sale of loans to private lenders.Option B allocates a little over $2 billion in direct grants over the five-year period. Like Option A, these grant disbursements are weighted toward early delivery to readily qualified projects.Option B also allocates $500 million to a low-interest revolving loan fund and establishes a $50 million credit enhancement program. This approach uses existing financing programs and limits the need to incorporate innovative financing strategies.Adding the Interest Rate Offset Grant mechanism to Option B would substantially increase the total program value, to a total of just over $6.5 billion.

“I congratulate Ernest Moniz on his confirmation as Secretary of Energy,” said Graham Richard, CEO of Advanced Energy Economy, a national association of business leaders who are making the global energy system more secure, clean, and affordable. “Advanced energy is a $1 trillion global opportunity for the United States, and Secretary Moniz has the science, technology, industry and government experience to make the most of it. We at AEE look forward to working with him.”

Sacramento, CA – California Governor Jerry Brown yesterday proposed loaning the entire first year's auction revenues of $500 million from the state’s landmark environmental legislation AB 32 to the state's general fund. 

Nearly 77 Percent Support SB 103, Legislation To Fix The State’s Renewable Portfolio StandardCHICAGO--(BUSINESS WIRE)--Wide majorities of likely Illinois voters believe it is important that the state maintain its commitment to increase its use of renewable power and support legislation that would achieve this goal by fixing the state’s broken renewable portfolio standard (RPS) law, according to a Zogby survey released today.“This survey shows that the people of Illinois support energy that is clean, secure and affordable”Aileron CommunicationsDave Lundy, 312.629.5245dlundy@aileroninc.com

FORT COLLINS, CO – Colorado State University’s Center for the New Energy Economy (CNEE) today announced the rollout of the Advanced Energy Legislation (AEL) Tracker – a new online database of energy-related state legislation pending in all 50 states, from solar to natural gas and everything in between. This first-of-its-kind database, created in partnership with Advanced Energy Economy (AEE), will also enable CNEE to conduct analysis of trends in state energy legislation.

The Senate Finance Committee released a white paper today outlining possible federal energy tax changes. The white paper is the fourth in a series of papers presenting tax reform options for consideration as part of the Committee’s broader tax reform efforts. AEE's Malcolm Woolf, senior vice president of policy & government affairs, released the following statement:

Interviews with 40 Executives Show Support for Policy Stability, R&D Support, Incentives that Phase Out, and a Level Competitive Playing FieldCreate market certainty by making rules and regulations stable, predictable and transparent, in order to encourage investment.Create a level playing field by providing advanced energy access to benefits provided to traditional energy and avoiding preferential treatment for particular technology solutions.Support innovation in a portfolio approach by increasing federal funding for research and development and using that funding to assist the widest array of technological possibilities.Limit the duration of incentive support in order to let competitive markets determine what technologies will be viable in the long run.Craft policies around broad problems rather than prescribe narrow solutions, in order to let innovation and competition in the marketplace surface the best answers.R&D Funding: Nearly every executive interviewed supports the Federal Government’s involvement in research and development in advanced energy, especially if done through independent agencies in support of a wide range of firms at varying scales. Advanced Research Projects Agency-Energy (ARPA-E) and Defense Advanced Research Projects Agency (DARPA) were cited as the best existing models, with DARPA exhibiting the added benefit of linking product development to an established defense procurement market.Tax Policy: Tax credits are seen as a powerful tool to incentivize but should sunset in a well-structured and clearly defined manner. For example, the renewable electricity production tax credit (PTC) has generally been extended in one- or two-year increments over a number of years, resulting in boom and bust cycles. It would be better for this mechanism to be extended for a fixed number of years and then phased out in a well-structured and clearly defined manner. Similarly, tax incentives that currently create preferential treatment for conventional energy technologies should either sunset or be widely offered to advanced energy generation technologies. The Master Limited Partnership (MLP) ownership structure, now available only to certain conventional energy facilities, is one that many executives say should be available to advanced energy technologies as well.Demand Creation: Government policy can help bring new technologies to scale by stimulating market demand in a variety of ways. For example, many executives view a national version of the Renewable Portfolio Standards (RPS) currently in 29 states as a potential means to create market demand. They also believe that any federal RPS needs to be technology neutral, meaning it should not privilege one advanced energy technology over another, especially considering regional variation in renewable resources. The executives also cite both Corporate Average Fuel Economy (CAFE) standards and the Renewable Fuel Standard (RFS) as stimulating private investment. But they strongly prefer the CAFE approach, which allows vehicle manufactures to determine the best means of raising fuel economy, over the RFS, which requires production of specific biofuels.  Be targeted to driving innovation.Sunset or update automatically when market-based objectives are achieved.Provide stability and certainty for businesses and investors.Be technology neutral to support all forms of advanced energy.

Advanced Energy Economy (AEE) represents the pragmatic voice of business leaders who are working every day to make the energy we use secure, clean, and affordable.What are the primary business challenges faced by your firm?How does your business interface with federal policy?What changes to federal policy would you like to see occur?

Advises Lawmakers to Transition from Current Patchwork to Technology-Neutral Provisions that Provide Stability, Phase Out Incentives Based on Market CriteriaBe targeted: limit incentives to where innovation is needed to build a more secure, clean and affordable energy future. Rather than providing permanent support to mature technologies that already have significant market penetration, the federal government’s role should be limited to driving innovation and commercializing the next generation of technologies that promise public benefits such as enhancing energy security through fuel diversity and grid modernization, providing cleaner energy that better protects public health, and reducing energy costs for consumers and businesses.Sunset automatically when market-based objectives are achieved. No company or technology should be entitled to permanent subsidies. When left in place too long, tax incentives distort price and market signals and ultimately create barriers to entry for new technologies. Tax incentives should remain in place only long enough to achieve a measurable, market-based objective that represents a point at which emerging technologies have reached sufficient maturity to stand on their own.Provide stability and certainty for businesses and investors. Rules that change frequently or unpredictably are disruptive to markets and harmful to the businesses, investors, and consumers participating in them. The life of many current credits is determined by expiration dates that are short-term, arbitrary in nature, and unrelated to market conditions. When credits are allowed to lapse, or renewed at the eleventh hour – and extended to the next short-term, arbitrary deadline – the result is a cycle of boom and bust. Using meaningful performance metrics tied to maturity in the marketplace, rather than calendar deadlines, to sunset a tax benefit would provide certainty to investors, focus businesses on bringing their technologies to scale and down the cost curve, and allow market dynamics to drive business success.Be technology neutral. Many of today’s energy tax policies were written with one sector in mind, even favoring a single technology. Such an approach distorts market signals and puts the weight of the government behind investment decisions. This is inefficient and it imposes unnecessary risk on taxpayers. In addition, this approach can inadvertently freeze out next- generation technologies. Energy tax benefits should be applied as broadly as possible to stimulate innovation across technologies, including those that have not yet emerged.