Sen. Bayh Signs Letter to President Obama Opposing Climate Change Bill Without Protection for Manufacturing

The following article was published on August 7, 2009, in the New York Times. According to the Indianapolis Star Sen. Richard Lugar (R-Indiana) has said he opposes the climate change bill the House passed in June. Both Sen. Bayh and Sen. Lugar are expected to be in Indiana during the August recess. The Senate is expected to resume work on the Senate version of an energy bill following the August recess.


Climate Bill Is Threatened by Senators

http://www.nytimes.com/2009/08/07/us/politics/07climate.html

By JOHN M. BRODER


WASHINGTON — Ten moderate Senate Democrats from states dependent on coal and manufacturing sent a letter to President Obama on Thursday saying they would not support any climate change bill that did not protect American industries from competition from countries that did not impose similar restraints on climate-altering gases.

The letter warned that strong actions to limit emissions of carbon dioxide and other heat-trapping gases would add to the cost of goods like steel, cement, paper and aluminum. Unless other countries adopt similar emission limits, the senators warned, jobs will migrate overseas and foreign manufacturers will have a decided cost advantage.

“As Congress considers energy and climate legislation,” the senators wrote, “it is important that such a bill include provisions to maintain a level playing field for American manufacturing.”

“It is essential that any clean energy legislation not only address the crisis of climate change, but include strong provisions to ensure the strength and viability of domestic manufacturing,” the letter said.

The 10 senators are seen as crucial undecided votes in the Senate debate on climate legislation. The House narrowly passed a climate bill in late June, but the Senate is moving slowly, in part because it is preoccupied with health care legislation.

The senators represent Midwestern and coal-producing states from which many of the 44 Democrats who voted against the measure in the House come from. Without their support, it is unlikely that the Senate can pass a major climate change bill.

The 10 senators were Evan Bayh of Indiana; Sherrod Brown of Ohio; Robert C. Byrd and John D. Rockefeller IV of West Virginia; Bob Casey and Arlen Specter of Pennsylvania; Russ Feingold of Wisconsin; Al Franken of Minnesota; and Carl Levin and Debbie Stabenow of Michigan.
They called for transition aid for energy-intensive manufacturers in the form of rebates on their energy costs; negotiation of a strong international agreement on emissions; programs to monitor emissions in other countries; and significant financing for clean energy technology.

The authors also proposed “border adjustments,” tariffs, on goods from countries that do not agree to an international program for carbon dioxide reductions. The House bill gives the president the power to impose such penalties on goods from countries that do not adhere to an international climate change regime.

“Climate change is a reality and the world cannot afford inaction,” the senators wrote. “However, we must not engage in a self-defeating effort that displaces greenhouse gas emissions rather than reducing them and displaces U.S. jobs rather than bolstering them.”

In an interview shortly after the House vote, President Obama said he was concerned about the tariff provision of the House bill, calling it potentially protectionist.

Rep. Matt Pierce to Introduce Advanced Renewable Energy Contract Legislation in Indiana Again in 2010

Indiana Rep. Matt Pierce (D-Bloomington) is quoted in the article below that ran in today's New York Times. Rep. Pierce has agreed to participate in InREA's upcoming webinar on Feed-in Tariffs or Advanced Renewable Energy Contracts on Tuesday, August 18, 2009 from 2:00 to 3:30 pm EDT. The webinar orginally scheduled for Wednesday, August 5, has been re-scheduled. For more information on this webinar contact info@indianarenew.org.

August 3, 2009

House Will Get Another Shot at Feed-In Tariffs

By PHIL TAYLOR of Greenwire

With the Senate girding for a debate over sweeping legislation that would reduce greenhouse gas emissions and spur development of renewable electricity, two House Democrats are preparing a more limited bill with similar goals.

Reps. Jay Inslee of Washington and Bill Delahunt of Massachusetts are preparing a bill that would require utilities to purchase small-scale renewable energy from developers at rates equal to the cost of production plus a premium. The so-called feed-in tariffs proposal would set European-style guarantees for investors that many credit for a recent boom in solar energy in Germany.

"We have some brilliant Americans with brilliant business plans with brilliant technologies, but they don't have financing," Inslee said at a briefing last week on Capitol Hill. "The charm of the feed-in tariff is solid, take-it-to-the-bank security and confidence for the investing community."
Proponents say feed-in tariffs can be more effective than renewable-energy standards, such as the one included in the House climate bill by Democrats Henry Waxman of California and Ed Markey of Massachusetts, because they offer staggered rate incentives for each energy source based on current production costs. The initial rate that utilities would pay for solar energy, for example, would be higher than payments for less-expensive wind energy.

"The renewable-energy standard is good, and I'm a firm backer, but it has a weakness," Inslee said. "It's really only an incentive for the next-closest-to-competitive technology, frankly, which is wind right now."

The case for feed-in tariffs assumes that the cheapest renewable technology today won't necessarily be the cheapest technology in the future. Rate incentives that support many energy sources would create a race to become the next competitive alternative to fossil fuels or nuclear power, proponents say.

One widely cited model is Germany, which has become the world's largest market for photovoltaic systems and wind energy since passing its Renewable Energy Sources Act almost a decade ago. Germany more than doubled its national supply of renewable energy between 2000 and 2007 and was able to meet its 2010 target of 12.5 percent renewable electricity three years ahead of schedule.

"The Germans made a big and very important change," said former CIA Director James Woolsey, a panelist at last week's briefing and a partner in the "clean tech" division of investment group VantagePoint Venture Partners. "It's the reason that Germany -- a quarter of the size of the United States -- has six times as much solar."

There is a building in Munich, Woolsey said, that produces more solar energy on its rooftop than is produced in either Texas or Florida. The German boom in renewable energy -- driven in large part by the feed-in tariff -- generated 117,000 new jobs in the renewable power sector between 2004 and 2008, according to the German Environment Ministry.

Woolsey said feed-in tariffs could also improve national security by diversifying the United States' electricity production.

Today's electric grid relies on a sprawling network of transmission lines and centralized power plants that are vulnerable to attack, Woolsey said. Feed-in tariffs would expand the use of distributed generation like small wind and solar, helping reduce grid congestion and eliminating targets for terrorists.

"What we have today, with extremely high-voltage transmission lines and transformers sitting out behind cyclone fences next to highways, is vulnerable to physical attack; it is vulnerable to cyber attack," said Woolsey, adding that even amateur hackers can penetrate some off-the-shelf software programs that utilities use to monitor operations.

'Nightmares of PURPA'

Under a feed-in tariff proposal that Inslee sponsored last year, renewable energy developments of less than 20 megawatts would be given priority access to the grid and could sign 20-year contracts with utilities that guarantee a 10 percent rate of return. Rates would be tailored to fit the cost of production in different regions of the country and would be set by the Energy Department.

The "Renewable Energy Job and Security Act" would have paid for itself through an increase in consumer utility bills. The feed-in tariffs could also include built-in decreased payments to drive innovation and cost reduction over time.

Opponents of feed-in tariffs say their mandatory rate structures would raise electricity bills and would warp the free market as the Public Utilities Regulatory Policies Act (PURPA) did in the 1970s and '80s.

PURPA was meant to support the expanded use of renewable energy by requiring utilities to purchase power from non-utility producers at the "avoided cost" rate, or the amount the utility would have paid to generate the power on its own or to purchase it from another source.
"Thanks to PURPA, many customers were paying a higher price for electricity than what was selling on the open market," said David Owens, vice president of business operations at the Edison Electric Institute, at an April panel discussion at the Washington-based New America Foundation.

Owens argued against proposals to add a national feed-in tariff on top of a comprehensive cap-and-trade bill for greenhouse gases that includes a renewable energy standard. He said the national march toward renewable energy must happen at an evolutionary, not a revolutionary, pace if customers want to avoid being hit with excessive hikes in their utility bills.

"We have a range of options available to stimulate the development of renewables," Owens said.
"But I have difficulty if we seek to take another national approach that gives me the nightmares of PURPA."

Action by states, cities

In May, Vermont became the first state to pass feed-in tariffs for renewable energy, joining Ontario as the only state-level governments in North America to adopt such a policy.
The Vermont bill got a mixed response from lawmakers and was passed into law without the signature of Gov. Jim Douglas (R), who released a statement saying the bill "fails to recognize the current viability of renewable energy in a competitive setting and will needlessly increase costs to Vermont consumers."

Several other states -- including Michigan, Minnesota, Indiana, California and South Dakota -- are considering their own versions of feed-in renewable energy tariffs.

"The feed-in tariff has proven to be the best way to get quick movement in renewable energy development and create a lot of jobs," said Indiana state Rep. Matt Pierce (D), who has introduced a feed-in tariff proposal.

While Inslee and Delahunt's proposal would award states that adopt rates set by DOE and the Federal Energy Regulatory Commission, national feed-in tariffs have been criticized as an encroachment on states' rights to approve their own rates.

Gainesville, Fla., imposed the nation's first solar feed-in tariff in March, offering owners of new photovoltaic systems 32 cents per kilowatt-hour of electricity produced over the next 20 years.
The Edison Electric Institute's Owens, who argued against a national feed-in tariff, said the policy might be better implemented at the local and regional level, instead of coming from Washington.

"The city of Gainesville has benefited immensely through job creation," Owens said, such as through the millions of dollars in solar investments many anticipate as a result of the financial certainty offered by the renewable contracts.

Meanwhile, South Dakota's Public Utilities Commission is taking public comments on policies to support more wind development through rates that would reflect utilities' avoided costs, falling short of incentives offered by full feed-in tariffs.

Michigan became the first state to consider European-style feed-in tariffs with state Rep. Kathleen Law's (D) "Renewable Energy Sources Act" in September 2007. Law's bill was presented later that year at a National Caucus of Environmental Legislators meeting and became the inspiration for similar proposals in Illinois, Rhode Island and Indiana.

"Indiana has been so far behind the eight ball on renewable energy," said Pierce, whose bill died in committee without a vote. He said one of the biggest challenges was that so many lawmakers are unfamiliar with feed-in tariffs.

"Some have absolutely no idea what I'm talking about," Pierce said. "They hear the word 'tariff' and they think I want to tax something. ... Tariff equals tax or trade barrier to them."

'Worst name in the business'

Woolsey referred to "feed-in tariff" as "the worst name in the business." Others complain the term conjures up the idea of levying taxes on imported cattle feed.
Some have proposed calling them "advanced renewable energy payments" or "renewable buybacks," but for now, lawmakers are stuck with "feed-in tariffs," which was drawn from the German word for "electricity feeding-in law."

Pierce said he is planning to introduce another feed-in tariff bill in the 2010 session, by which time he suspects several more cities will have passed or considered feed-in tariffs. Being able to point to proven models, he said, will be important to gaining lawmaker support.

Copyright 2009 E&E Publishing. All Rights Reserved.

For more news on energy and the environment, visit www.greenwire.com.

Watch Terry Black, Greenway Supply Video on Cap and Trade from Inside Indiana Business on 7/17/09

Watch Terry Black, co-owner of Greenway Supply in Indianapolis on Inside Indiana Business with Gerry Dick from last Friday, July 17, 2009.

WATCH VIDEO HERE.

The following is advertising copy from a newspaper advertisement that ran in Indiana before the U.S. House of Representatives vote on "cap and trade" in the American Clean Energy and Security Act (H.R. 2454).

The American Clean Energy and Security Act will
make a real difference for America, and my business.
By jump-starting a clean energy economy, it
will create demand for steel for wind turbines, energy
efficient windows for new construction, and
thousands of other products made in America
– including Earth friendly building supplies that
my company provides here in Indiana.
The American Clean Energy and Security Act
will cut oil imports, create new jobs, and keep energy
affordable. It’s the right choice for America.
Help Small Business Create Jobs
Vote for the American Clean
Energy and Security Act

Paid for by Environmental Defense Action Fund

"To me, the American Clean
Energy and SecurityAct means
jobs for Indiana”

Terry Black, GreenWaySupply, Indiana and member of InREA.

REVISED: Join Us for InREA Intro Feed-in Tariff Webinar Re-Scheduled Aug. 18th @ 2 pm EDT

• Want to know what the buzz is about Feed-in Tariffs (FIT) or advanced renewable energy contracts?
• Did you miss the Indiana Renewable Energy Association (InREA) reception and meeting with FIT advocate Paul Gipe last September in Ft. Wayne?
• Want to know more about how FIT's compare to other policies such as net metering and a renewable electricity standard (RES) to promote renewable energy development?
• Did you know there is a feed-in tariff (FIT) proposed by Indianapolis Power and Light (IPL) currently pending before the Indiana Utility Regulatory Commission (IURC)?
• Want to know more about the state legislation introduced during the 2009 Indiana General Assembly on advanced renewable energy tariffs and the prospects for 2010?

InREA members Chris Striebeck with IDS of Indianapolis and Laura Ann Arnold with The Arnold Group of Indianapolis are planning an Intro Webinar on FIT's. Rep. Matt Pierce (D-Bloomington) will also participate in this webinar. Rep. Pierce introduced a FIT bill during the 2009 session of the Indiana General Assembly and currently plans to introduce another bill in 2010. This webinar will cover an introduction to FIT's as well as a status report on recent FIT proposals in the US and abroad. See this FIT update.

We anticipate scheduling additional webinars on this topic with additional speakers as well as other issues related to renewable energy development in Indiana.

Don't miss this important event. SIGN-UP TODAY!

The FIT webinar is scheduled as follows:

How Advanced Renewable Energy Contracts aka Feed-in Tariffs (FITs) can bring clean energy jobs and promote more rapid deployment of renewable energy resources and distributed generation (DG) in Indiana.

NEW DATE: Tuesday, August 18, 2009

2:00 to 3:30 pm EDT

Register for this webinar to receive 1) call-in information and 2) written materials please e-mail us at info@indianarenew.org.

Britain to Launch Innovative Feed-in Tariff Program in 2010; Proposes World's Highest Tariffs for Small Wind Turbines

Pictured from left to right: InREA Board Member Gary Washington, Paul Gipe and InREA Treasuer Leon Bontrager. Photo taken during Wind 101 Workshop, Sept. 12, 2008 in Ft. Wayne, Indiana.

July 23, 2009
By Paul Gipe

They said it couldn't be done, but Britain has risen to the challenge. Britain's Secretary of State for Energy and Climate Change Ed Miliband has released long-awaited details on the Labour Government's feed-in tariff policy.

Miliband, an up-and-coming politician in the cabinet of besieged Prime Minister Gordon Brown, has done what was once unthinkable, put a British stamp of approval on feed-in tariffs as a policy mechanism for developing renewable energy.

The move has potentially far reaching ramifications in the English speaking world where there has been reluctance to use full-fledged systems of feed-in tariffs, sometimes on ideological grounds. Now that Britain, Ontario, and South Africa, two of Britain's former colonies, have definitively moved toward implementing sophisticated feed-in tariff programs, there may be less reticence to do so elsewhere in the Anglophone world.

Of course, like politicians everywhere, Miliband had to rebrand feed-in tariffs to something more to his liking. His "clean energy cash back" creates yet another term for what everyone else calls, sometimes grudgingly, feed-in tariffs.

Nevertheless, the program's designers took their task seriously and didn't opt for a system of faux or false feed-in tariffs, what North American campaigners have begun derisively calling FITINOs, feed-in tariffs in name only.

The British proposal has also contributed several innovative new twists on feed-in tariff design that will mark the program as "made in the United Kingdom".

One new feature is the inclusion of tariffs for Combined Heat & Power (CHP). While not a first, it is one of the few programs to do so. Another feature of the proposed program is a distinct tariff for small solar PV systems on new homes, and a separate tariff for existing homes.

Most significantly, program designers have included a mechanism to encourage homeowners and small businesses to reduce their electricity consumption. For example, a solar PV generator will be paid for all their generation. However, they will receive a bonus, currently at £0.05/kWh ($0.08 USD/kWh, $0.09 CAD/kWh), for electricity delivered to the grid over and above their domestic consumption. Thus, if a homeowner is able to cut their domestic consumption, and sell more electricity to the grid as a result, they are paid the bonus on top of the posted feed-in tariff.

The proposed program, like the successful programs it was modeled after, was designed to "set tariffs at a level to encourage investment in small scale low carbon generation." This is in contrast to faux feed-in tariffs that set the tariffs on the "value" of renewable energy to the system as in the California Public Utility Commission's largely ineffective program.

British designers were instructed to calculate tariffs not on ideology or economic theory but on the tariffs needed so "that a reasonable return can be expected for appropriately sited technologies" to meet the country's renewable energy and carbon mitigation targets.

Unfortunately, the program's targets are timid at best, two percent of Britain's electricity consumption by 2020, and the tariffs are limited by law to projects less than 5 MW to protect the country's stumbling Renewable Obligation, the preferred mechanism for developing larger projects.

The two percent target requires the generation of only 8 billion kWh (TWh) per year. For comparison, Germany generated 40 TWh in 2008 from wind energy and more than 4 TWh from solar PV. France, Britain's longtime cross-channel rival, generated nearly 6 TWh from wind energy in 2008 from its system of feed-in tariffs.

Some of the proposed tariffs are not competitive with those on the continent, or those in Ontario. "For community-scale or larger on-site projects," says David Timms, a senior campaigner with Friends of the Earth (UK), "the rates [tariffs] are inadequate."

The tariff proposed for large wind turbines is low by international standards. Britain has some of the best winds in Europe. Nevertheless, many of the smaller projects that may be built under the feed-in tariff program may not be as advantageously sited as commercial projects under the Renewable Obligation. Consequently, the proposed tariff for wind projects from 500 kW to 5 MW may be insufficient to drive development.

Timms also adds that the "degression for solar PV is quite aggressive" at 7 percent per year and that the bonus payment of £0.05/kWh for export to the grid may not be bankable. Because the bonus payment will fluctuate with the "market price" it won't necessarily have a fixed value and, consequently, it will be discounted by banks providing debt for projects financed under the feed-in tariff.

If implemented as proposed, though, the British program will offer some of the highest tariffs for small wind energy in the world. The tariffs will rival those in Italy, Israel, Switzerland, and Vermont, possibly reflecting the British government's belief that it can encourage development of a domestic small wind turbine industry. For example, the tariff proposed for small wind turbines from 1.5 kW to 15 kW is £0.23/kWh ($0.38 USD/kWh, $0.42 CAD/kWh) about that paid in Italy and Israel.

The proposed program also includes a number of anti-gaming provisions to avoid breaking up bigger projects into several small ones to fit within the 5 MW project size cap. These will prevent companies from moving big wind projects from the Renewable Obligation to the feed-in tariff program.

Britain's feed-in tariff program is expected to begin in early April, 2010 after an extensive consultation. Below is a summary of the program's key elements.

• Program Cap: 2% of Supply, 8 TWh in 2020



• Project Cap: 5 MW Generator can be green field (doesn't have to be a metered customer)



• Contract Term: 20 years



• Program Review: 2013 Costs for the program will be borne by all British ratepayers proportionally
  

While limited in scope, Britain's proposed feed-in tariff program is as sophisticated, if not more so, as any proposed in the United States, and will put the country on the world map of innovative renewable energy policy.

Consultation on Renewable Electricity Financial Incentives 2009: Program Details

Consultation on Renewable Electricity Financial Incentives: Background Documents & Reports

This news update is partially supported by the Jan & David Blittersdorf Foundation in cooperation with the Institute for Local Self Reliance. The views expressed are those of Paul Gipe and are not necessarily those of the sponsors.

Paul Gipe

661 325 9590, 661 472 1657 mobile

pgipe@igc.org, www.wind-works.org

Green Industries Fund Created in State Budget Passed by Indiana Legislators

Yesterday (6/30/09) state legislators adopted a new state budget that includes formation of a Green Industries Fund. Not sure yet how this will be funded or if it will be funded.

SECTION 81. IC 5-28-34 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2009]:

Chapter 34. Green Industries Fund

Sec. 1. As used in this chapter, "fund" means the green industries fund established by section 3 of this chapter.

Sec. 2. For the purposes of this chapter, "green industry" means an Indiana business that manufactures products that reduce energy consumption or lower emissions in the market of their intended use, including the following:
(1) Biofuels.
(2) Advanced technology vehicles.
(3) Alternative fuel vehicles and power systems.
(4) Clean diesel technology.
(5) Domestic appliances.
(6) Distributed power generation.
(7) Emission control systems.
(8) Energy monitoring, management, and efficiency.
(9) Fuel cells.
(10) Renewable energy.
(11) Smart grid technology.
(12) Highly insulative building construction products.
(13) Construction products manufactured from at least fifty percent (50%) postconsumer products.
(14) Other sectors determined by the corporation.

Sec. 3. (a) The green industries fund is established. The fund shall be administered by the corporation. (b) The fund may be used to provide grants and loans to Indiana manufacturing companies for the following purposes:
(1) To strengthen Indiana's economy by focusing investment in advanced manufacturing clusters focused on more energy efficient and environmentally sustainable technologies, processes, and products.
(2) To accelerate job creation through training and education initiatives to enhance the skills and employment prospects of Indiana's workforce in green industries.
(3) To facilitate the redevelopment of Indiana manufacturing sites, facilities, and processes to operate in a more energy efficient and environmentally sustainable manner.
(4) To stimulate the development of technologies, processes and products that reduce energy consumption or lower emissions in the market of their intended use.
(5) To encourage public-private partnerships focused on development of green industries among Indiana manufacturing companies, public or private educational institutions, nonprofit organizations and charitable foundations, research and development organizations, and state agencies.

Sec. 4. (a) An Indiana manufacturing company may apply for one (1) or more grants or loans from the fund.
(b) The corporation shall give priority to applications that meet three (3) or more of the purposes listed in section 3 of this chapter. The corporation shall base the award of a grant or loan on the number and quality of jobs being created, the community's economic need, and the capital investment being made by the applicant.
(c) A grant may not exceed fifty percent (50%) of the applicant's project costs.

Climate Change Roundtable Discussion Scheduled July 9th at IUPUI

What Are the Local Impacts of Climate Change?
A Public Round Table Discussion

Environment America and the Richard G. Lugar Center for Renewable Energy at Indiana University Purdue University Indianapolis (IUPUI) will host a public round table event to discuss a recent report released by the U.S. Global Change Research Program on the impacts of climate change in the U.S. Expert speakers will give their reactions to the report and talk about the impacts of climate change from their individual perspectives.

THURSDAY, JULY 9TH
12:00 pm
IUPUI CAMPUS CENTER, ROOM CE 305
420 University Blvd.Indianapolis, IN 46202

Panelists:

Bill Keith, President, SunRise Solar
Reverend Mike Mather, Broadway United Methodist Church
Dr. Gabriel Filippelli, Chair, Department of Earth Science, IUPUI
Jimmy Bricker, County Extension Director, Benton County
Representative, Truman National Security Project

Parking and Directions:
https://www.parking.iupui.edu/visitors.do
http://www.iupui.edu/about/maps/directions.html

Access to report:
http://globalchange.gov/publications/reports/scientific-assessments/usimpacts/newsroom

Contacts:
LuCinda Hohmann, Environment America: 312-291-0696 x220
Kyle Cline, Richard Lugar Center for Renewable Energy: 317-278-4723