Advanced Energy Perspectives

At a time when Americans are starting to get into the holiday spirit, Congress has its foot on the gas pedal to pass a significant tax bill by year’s end. AEE supports Congress’ intention to lower the corporate tax rate and adjust the tax code to give certainty to businesses and let them do what they do best – invest, innovate, and create jobs. As a $200 billion industry supporting more than 3 million American workers, the advanced energy industry has much at stake in the sweeping revision of the tax Congress is aiming for. Unfortunately, the bills passed by the House and Senate each include troubling provisions that would undermine Congress’s goal of implementing a pro-growth strategy for the American economy. On Wednesday, AEE submitted its recommendations for the final legislation to congressional leaders.  

If you are looking for information to share at the Thanksgiving table about how the tax bills pending in Congress will affect the advanced energy industry, you’re in luck. A whirlwind November brought proposals from House and Senate Republican leadership, each stuffed with changes to the tax code that could help – or hurt – advanced energy growth. In just three weeks, the House passed its version of the tax bill, and the Senate moved its version through committee before heading back home for the holiday. As these bills now stand, the advanced energy industry has a lot to gain and lose. Here is a roundup of what to look for in tax legislation, as it affects a growing $200 billion industry that supports more than 3 million workers across the United States.

Yesterday, House Republican leaders released the “Tax Cuts and Jobs Act,” which is intended to create a better tax and business climate. As a business association, AEE supports efforts to create a better business and tax system for the United States, and this proposal includes some provisions that could be beneficial. Unfortunately, several provisions directly target the advanced energy industry, particularly wind power and electric vehicles, for loss of tax benefits.

The House has announced plans to move quickly on this package, with a hearing scheduled for Monday, Nov. 6, in the Ways and Means Committee. The Senate is also expected to release its own proposal, which will likely differ on key provisions related to the advanced energy industry. We are actively working with Congress and our allies to ensure that the advanced energy industry is not harmed by this and any future tax package.

While still reviewing the 429-page bill, we can see that the advanced energy industry was not ignored by Congress in this high priority, and highly controversial, piece of legislation. But let’s be clear: AEE will fight to make sure that any tax measure approved by Congress recognizes the full value of the advanced energy industry, now a $200 billion industry supporting more than 3 million jobs across the United States.

Over the past week, the energy industry has been rocked by the release of a Notice of Proposed Rulemaking (NOPR) from the Department of Energy (DOE) to the Federal Energy Regulatory Commission (FERC) that, if implemented, would upend the wholesale electricity markets where advanced energy is thriving. AEE is deeply involved in this proceeding, and has joined with a diverse group of energy industry associations to express concern about the aggressive timeline for this rulemaking called for by DOE. But while DOE pushes for a quick action on its radical proposal, the House Energy and Commerce Committee is undertaking a thoughtful series of hearings, entitled Powering America, on electricity and the role of the federal government for energy policy. Last week, AEE was asked to testify, and took the opportunity to explain how technology innovation, declining costs, and consumer preference are driving growth of the advanced energy industry – and will do so even more, if the nation’s electricity markets are open for competition from all technologies.

Apex Clean Energy, a company headquartered in Charlottesville, is in the planning stages of its first Virginia wind farm.

Over the past four years, Virginians have seen the advanced energy industry grow, as it became a key priority for the McAuliffe Administration. The solar market grew from 18 MW installed in the Commonwealth in 2013 to over 200 MW today, with hundreds more on the way. Gov. McAuliffe also took executive and legislative action to improve the market for energy efficiency, and began regulatory initiatives to modernize the state’s grid with investment in advanced energy technologies. However, with Gov. McAuliffe’s term coming to an end and Election Day fewer than eight weeks away, voters (and the advanced energy industry) are asking how the next governor of Virginia will act on energy issues. Happily, both the Republican nominee – Ed Gillespie – and Democratic nominee – Lt. Gov. Ralph Northam – have announced policies to grow the advanced energy industry, shining a hopeful light in Virginia for what to expect for the next four years.