Showing posts with label federal budget. Show all posts
Showing posts with label federal budget. Show all posts

USDA announces renewable and energy efficiency funding

Friday, March 29, 2013

The United States Department of Agriculture has announced a new round of funding for assistance to agricultural producers and rural small businesses for energy efficiency and renewable energy projects.  USDA's Rural Energy for America Program (REAP) offers eligible farms and businesses incentives to improve their energy efficiency or produce energy from renewable sources.

USDA's mission includes revitalization of rural economies to create opportunities for growth and prosperity, support innovative technologies, identify new markets for agricultural producers, and make better use of natural resources. Authorized by the 2008 farm bill (formally the Food, Conservation, and Energy Act of 2008), the USDA REAP program's goals are to help agricultural producers and rural small businesses reduce energy costs and consumption and help meet the nation's critical energy needs.  Through the end of the 2012 fiscal year, REAP has funded over 6,800 renewable energy and energy efficiency projects, feasibility studies, energy audits, and renewable energy development assistance projects.

Today USDA announced that it will accept applications for three REAP program categories:
USDA plans to make funding available despite the current federal budget sequestration, which appears to have cut REAP funding by at least $2 million in fiscal year 2013. 

Application requirements for REAP assistance vary depending on the type of assistance sought.  Those interested in applying for assistance can contact their local USDA office for more information, or consult a professional with experience working with the REAP program.

Preti Flaherty helps our clients evaluate whether REAP assistance is a good match for their businesses; I have assisted my clients in securing REAP funding for their energy projects.  Please contact us at 207-791-3000 for more information.

Federal budget sequestration's impacts on energy industry, consumers

Friday, March 1, 2013

Unless Congress enacts a plan to reduce the federal budget deficit today, a procedure known as "sequestration" will take effect immediately, cutting government spending until the budget can be resolved.  What will sequestration mean for the energy industry and consumers?

Under the Budget Control Act of 2011 (BCA), sequestration automatically kicks in unless the Joint Select Committee on Deficit Reduction proposes a plan to reduce the deficit by $1.2 trillion, and Congress subsequently enacts that plan.  For fiscal year 2013, sequestration could mean spending cuts of $85 billion over the remaining seven months of the fiscal year.  According to the federal Office of Management and Budget, nondefense program spending will be cut by about 9%.

Each federal agency's operations will be affected by the sequestration.  The OMB Report Pursuant to the Sequestration Transparency Act of 2012 (394-page PDF) details likely cuts, including reductions in funding available under the U.S. Department of Energy's High Energy Cost Grants program.  The High Energy Costs Grant program provides funding for improving and providing energy generation, transmission and distribution facilities serving communities with average home energy costs exceeding 275% of the national average.  For example, the Maine island of Monhegan's electric utility won a $420,154 grant under this program to replace the island's current switchgear, add a smaller, 40 kW generator to the power station's fleet, and add a 13 kW solar photovoltaic array to the power station's roof.

The sequestration could also slash funding for the U.S. Department of Agriculture's Rural Energy for America Program (REAP)REAP provides assistance to agricultural producers and rural small businesses to complete energy projects, including renewable energy systems, energy efficiency improvements, renewable energy development, energy audits, and feasibility studies

Other programs affected include the DOE's Energy Efficiency and Renewable Energy program, from which $148 million could be cut.  Likewise, the Low Income Home Energy Assistance Program (LIHEAP), which helps keep families safe and healthy through initiatives that assist families with energy costs, faces $285 million in cuts.

The funding reductions will also mean cuts to DOE's energy-efficiency and cybersecurity programs.  Likewise, the processing of applications for development of oil, gas, and coal on federal lands and waters would slow down as agency employees are furloughed.  

Will Congress act to avert sequestration?  If it takes effect, how long will it be until Congress enacts a compliant deficit reduction plan?  What price will society pay?

What the 2013 State of the Union said about energy

Tuesday, February 12, 2013

Tonight President Obama delivered the 2013 State of the Union address.  Energy figured heavily in his remarks, with emphasis on energy efficiency, natural gas production, and renewable energy.  His newly proposed policies, some of which require congressional approval, aim to boost the economy while protecting the environment.  Here's a look at what he said, relying on the text released online by the New York Times as text as prepared for delivery, as provided by the White House.


The State of the Union is a key opportunity for a president to speak his mind to the public and to Congress.  Article II, Section 3 of the U.S. Constitution directs the president to "from time to time give to Congress information of the State of the Union and recommend to their Consideration such measures as he shall judge necessary and expedient."  Presidents since Woodrow Wilson have delivered oral addresses to Congress.

President Obama's 2013 State of the Union address presented a number of energy issues and policies.  He criticized federal budget sequestration orders as disrupting priority programs including the energy sector:
In 2011, Congress passed a law saying that if both parties couldn’t agree on a plan to reach our deficit goal, about a trillion dollars’ worth of budget cuts would automatically go into effect this year. These sudden, harsh, arbitrary cuts would jeopardize our military readiness. They’d devastate priorities like education, energy, and medical research. They would certainly slow our recovery, and cost us hundreds of thousands of jobs. That’s why Democrats, Republicans, business leaders, and economists have already said that these cuts, known here in Washington as “the sequester,” are a really bad idea.
Energy security and sovereignty also figured prominently.  He cited advances in transportation fuel economy, renewable energy, natural gas, and reductions in carbon emissions:
After years of talking about it, we are finally poised to control our own energy future. We produce more oil at home than we have in 15 years. We have doubled the distance our cars will go on a gallon of gas, and the amount of renewable energy we generate from sources like wind and solar – with tens of thousands of good, American jobs to show for it. We produce more natural gas than ever before – and nearly everyone’s energy bill is lower because of it. And over the last four years, our emissions of the dangerous carbon pollution that threatens our planet have actually fallen.
Climate change also returned as a key area of focus, as it had in President Obama's second inaugural speech last month:
But for the sake of our children and our future, we must do more to combat climate change. Yes, it’s true that no single event makes a trend. But the fact is, the 12 hottest years on record have all come in the last 15. Heat waves, droughts, wildfires, and floods – all are now more frequent and intense. We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states have ever seen were all just a freak coincidence. Or we can choose to believe in the overwhelming judgment of science – and act before it’s too late.
To address climate change, President Obama asked Congress to develop a market-based solution, but vowed to take executive action if necessary:
The good news is, we can make meaningful progress on this issue while driving strong economic growth. I urge this Congress to pursue a bipartisan, market-based solution to climate change, like the one John McCain and Joe Lieberman worked on together a few years ago. But if Congress won’t act soon to protect future generations, I will. I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.
Clean energy continues to draw attention, while the development of economically-recoverable natural gas supplies is the latest energy revolution:
Four years ago, other countries dominated the clean energy market and the jobs that came with it. We’ve begun to change that. Last year, wind energy added nearly half of all new power capacity in America. So let’s generate even more. Solar energy gets cheaper by the year – so let’s drive costs down even further. As long as countries like China keep going all-in on clean energy, so must we.
In the meantime, the natural gas boom has led to cleaner power and greater energy independence. That’s why my Administration will keep cutting red tape and speeding up new oil and gas permits. But I also want to work with this Congress to encourage the research and technology that helps natural gas burn even cleaner and protects our air and water.
President Obama also promoted energy efficiency, from getting the transportation sector off oil to improving residential, business and industrial energy efficiency.  He proposed to create a trust funded by oil and gas leases and royalties to help fund some of these shifts:
Indeed, much of our new-found energy is drawn from lands and waters that we, the public, own together. So tonight, I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good. If a non-partisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we. Let’s take their advice and free our families and businesses from the painful spikes in gas prices we’ve put up with for far too long. I’m also issuing a new goal for America: let’s cut in half the energy wasted by our homes and businesses over the next twenty years. The states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make it happen.
Infrastructure investment was another point, including the electric power grid and pipeline networks:
America’s energy sector is just one part of an aging infrastructure badly in need of repair. Ask any CEO where they’d rather locate and hire: a country with deteriorating roads and bridges, or one with high-speed rail and internet; high-tech schools and self-healing power grids. The CEO of Siemens America – a company that brought hundreds of new jobs to North Carolina – has said that if we upgrade our infrastructure, they’ll bring even more jobs. And I know that you want these job-creating projects in your districts. I’ve seen you all at the ribbon-cuttings.
Tonight, I propose a “Fix-It-First” program to put people to work as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country. And to make sure taxpayers don’t shoulder the whole burden, I’m also proposing a Partnership to Rebuild America that attracts private capital to upgrade what our businesses need most: modern ports to move our goods; modern pipelines to withstand a storm; modern schools worthy of our children. Let’s prove that there is no better place to do business than the United States of America. And let’s start right away.
The 2013 State of the Union address suggests continued growth in U.S. sectors such as energy efficiency, alternative transportation fuels, renewable energy, and infrastructure development and maintenance.  Carbon emissions may also be examined, with a national market-based carbon cap and trade program possible such as now exists in California and the northeastern Regional Greenhouse Gas Initiative member states.  How Congress and the public react to these remarks remains to be seen, as does how and to what extent President Obama's proposed policy shifts are implemented.

May 16, 2011 - DOE loan guarantee program ramping down

Monday, May 16, 2011

The U.S. Department of Energy's loan guarantee program for renewable energy is preparing to run out of funding and shut down.  Last month, I noted how the Department's "1705" loan program uses loan guarantees to help energy projects get lower-cost financing.  Through the 1705 program, created and funded through the 2009 federal stimulus act, the Department committed $11 billion to support 19 projects ranging from nuclear power to solar, wind to transmission, biofuels to energy efficiency.  Continued funding for the loan guarantee program for 2011 was in doubt during the recent wrangling over the federal budget, but survived the cutting -- through September 30, 2011.

Now, DOE is preparing to close out the 1705 program.  With stimulus act funding expiring September 30, 2011, DOE is pushing to get the funding out the door -- and to turn away applicants who are not yet far enough along in the process.  Because project construction must also commence by September 30, DOE is screening out applicants it deems unlikely to meet that deadline.  While DOE's other loan programs -- the 1703 program for certain clean technologies and the Advanced Technology Vehicle Manufacturing program for fuel-efficient transportation -- will remain in operation, the apparent end of the 1705 program will close the book on an innovative federal incentive for renewable energy development.

April 19, 2011 - 400 MW solar project proposed in California

Monday, April 18, 2011

Last week I noted Google's investment in the 392 megawatt Ivanpah solar project in California.  That project, which is currently under construction in the Mojave Desert, is on track to be the world's largest solar thermal project.  Ivanpah uses heliostat mirrors to focus sunlight on centrally located solar power towers.  The towers use the solar energy to generate steam.  The steam runs through steam turbines and a generator to produce electricity.
"Turn your grocery bags into green energy" - seen at a Vermont market
Now an even larger solar project has been proposed for California -- this time solar photovoltaic.   Developer Pegasus Energy has proposed a 400 MW solar PV power plant on about 2,000 acres in Alameda County California.  The Mountain House Solar Farm would sell power to local utility PG&E, and might break ground in early 2013.

As we often see, the twin challenges of financing and regulatory uncertainty team up to add a wrinkle to these plans.  The developer has built a financing model based on using an incentive authorized by the American Recovery and Reinvestment Act: a cash grant in lieu of the federal 30% business energy investment tax credit (ITC).  That incentive program, known as the 1603 grant program, is currently slated to end this year.  The developer is reportedly hopeful that grant funds will be extended until January 1, 2013, and would be available to help finance the project.  This may be a realistic hope, as the 1603 program has already been extended once (by Section 707 of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010), so renewal is possible.  On the other hand, recent struggles over the federal budget do call into question the continued survival of any given clean energy incentive programs.  Will Congress renew the 1603 energy grant program?