Energy spending, Tax reform, Navy Energy pick, DOD facilities

The Senate and House are divided on energy research funding. Tax reform looms. The new Navy Energy Chief comes from ACORE. The share of geothermal is dropping in DOD’s portfolio.

Senate-House Divide on Energy Research Funding Deepens as White House Threatens Veto
Baucus, Hatch Urge Colleagues to Provide Input on Tax Reform
ACORE Director Chosen for Navy Energy Chief Position
Share of Geothermal Dropping in DOD Portfolio

Senate-House Divide on Energy Research Funding Deepens as White House Threatens Veto
The U.S. House this week approved its FY 2014 Energy and Water Development and Related Agencies Appropriations bill, H.R. 2609, which sharply contrasts to the Senate version of the bill, S. 1245, passed late last month.  The full House successfully fought off numerous amendments and dramatically cut funding for renewable energy programs in favor of fossil fuels and nuclear power.

On the other hand, the Senate Appropriations Committee released its report calling for increased renewables funding.  “Based on the results of the Department’s Quadrennial Technology Review, and the Nation’s many urgent energy challenges, the Committee strongly recommends that the Office of Energy Efficiency and Renewable Energy consider applying more funding toward near-term commercialization efforts in partnership with the private sector,” according to the report.  The $30.4 billion House version of the bill proposes a 40% cut in funding for renewable energy and energy efficiency programs at DOE, while the Senate version sees a 25% increase.

In particular, the House version cuts funding for geothermal to $12 million, while the Senate Committee Report supports the full requested amount:

Geothermal Technology- The recommendation for geothermal technology is $65,000,000. The funds made available by this section shall be disbursed to the full spectrum of geothermal technologies as authorized by the Energy Independence and Security Act of 2007 (Public Law 110-140) and the Department of Energy shall continue its support of comprehensive programs that support academic and professional development initiatives. The Committee continues to have concerns about the level of funding devoted to low-temperature geothermal research and development and directs the Department to provide funding to this geothermal area of research and development. The U.S. Geological Survey has identified more than 120,000 MW of untapped potential at these temperatures.

The White House has threatened a veto of the House bill. “If the President were presented with H.R. 2609, his senior advisors would recommend that he veto the bill,” according to a White House statement that also noted the bill would “leave U.S. competitiveness at risk in new markets for clean energy industries.”

The House Sustainable Energy & Environment Coalition (SEEC) released a statement response to H.R. 2609 titled “Republican Bill Pulls the Plug on America’s Clean Energy Future.”  SEEC Members write: “These backward-looking policies hinder America’s competiveness in the global clean energy economy by dramatically cutting investments in clean and renewable energy technologies that already are helping to break America’s foreign oil dependence.  SEEC Members call on House Republicans to work with us in a bipartisan fashion to make our nation more energy secure and invest in American clean energy jobs.”

Rep. Rodney Frelinghuysen (NJ-R), chairman of the House Appropriations Energy and Water Development Subcommittee was quoted in press: “The reductions we had to make to the applied energy research and energy development programs will shift more of their work to the private sector.”  Seec-israel.house.gov, Politico.comBloomberg.comReuters.com; Find information on pending appropriations bills at: Thomas.loc.gov

Baucus, Hatch Urge Colleagues to Provide Input on Tax Reform
Finance.senate.gov Press Release, Washington DC — Finance Leaders Take “Blank-Slate” Approach, Call for Ideas on What Expenditures to Keep and Improve in Code – Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Orrin Hatch (R-Utah) today proposed a “blank-slate” approach as a legislative starting point for tax reform and called on Senate colleagues to provide proposals for tax expenditures to add back and improve in a reformed tax code. 

“Over the past three years, the Finance Committee has been working hard on tax reform on a bipartisan basis.  We’ve held more than 30 hearings and heard from hundreds of experts on reforming the tax code,” the Senators write in a letter to their colleagues.  “We’re now entering the home stretch.  We need your input and partnership to get tax reform over the finish line.”

In an effort to develop the foundation for tax reform legislation, Senators Baucus and Hatch are calling on all Senators to submit legislative language or detailed proposals for what tax expenditures and other provisions should be added back to a reformed code.  The Senators stress tax expenditures and other provisions should be added back only if they: help grow the economy, make the tax code fairer, or effectively promote other important policy objectives.  Senators have until July 26 to submit their proposals.

“This blank-slate is not, of course, the end of the discussion,” Senators Baucus and Hatch write. “Indeed, we both believe that some existing tax expenditures should be preserved in some form.  But the tax code is also littered with preferences for special interests.”

To help inform submissions, the Senators had the nonpartisan Joint Committee on Taxation (JCT) and their staffs analyze the relationship between tax expenditures and the current tax rates if the current level of progressivity is roughly maintained.  The amount of rate reduction would depend on how much revenue was reserved for deficit reduction, if any, and from which income groups.

However, JCT and Finance Committee staff determined that every $2 trillion of individual tax expenditures that are added back would, on average, raise each of the seven individual income tax brackets by between 1.3 and 2.2 percentage points from what they would be under the blank slate.

Likewise, every $200 billion of corporate tax expenditures that are added back would, on average, raise the top corporate income tax rate by 1.5 percentage points from what they it would be under the blank slate.

Senators Baucus and Hatch said the JCT report demonstrates that the more tax expenditures allowed in the tax code, the less revenue available to reduce tax rates or reduce the deficit.  The full text of the senators’ letter is available (PDF) at Finance.senate.gov.

ACORE Director Chosen for Navy Energy Chief Position
By Sustainable Energy Coalition, source: The Hill — President Obama has tapped Vice Admiral Dennis V. McGinn (Ret.) as the Navy’s assistant secretary for energy, installations and environment. McGinn comes over from the American Council on Renewable Energy, where he was president and chief executive. The selection signals a continued commitment to green energy within the armed forces. The Navy plans to get half its energy from nontraditional sources by 2020. The White House has promoted the Navy’s transition to biofuels to power its fleet, and the Navy is also working toward getting 1 gigawatt of power from renewable sources, among other goals. The Navy and Defense Department have said transitioning to renewable energy enhances security, keeps spending disassociated from volatile oil prices and reduces the effects of climate change, which the Pentagon has called a national security issue.

Share of Geothermal Dropping in DOD Portfolio
Despite a strong history of using geothermal energy at several of its facilities, the share of this energy source in the Department of Defense’s portfolio has dropped while solar and wind projects increased. In 2011, geothermal accounted for 74% of DOD renewable energy installations, but that had fallen to 49% just a year later.

But there is the silver lining of the new multiple-award task order contract (MATOC) of which the first round, released in May, was focused on geothermal energy projects. The five pre-approved geothermal vendors chosen to work with DOE were Constellation NewEnergy Inc., ECC Renewables LLC, Enel Green Power North America Inc., LTC Federal LLC and Siemens Government Technologies Inc. Currently, nine projects at DoD installations produce geothermal energy. Geo-energy.org, Federaltimes.com

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