June 24, 2008
Detailed Summary of Energy Investments in Stimulus
The House of Representatives approved the conference report of the American Recovery and Reinvestment Act today, by a vote of 246-186. Not a single Republican joined Democrats in approving this version of the bill, which was the product of long negotiations between leadership in both the House and Senate, as well as a block of centrist Senate Democrats and Republicans who have taken control of much of the debate on the stimulus.
The public investment numbers in the stimulus have bounced around during the countless negotiations, so if you've been following this crazy game at home (all twelve of you), here's our detailed summary, provided without further comment, of the energy-related investments and tax provisions in the conference version of the stimulus.
Assuming the block of centrist Senators remains supportive, this will be the version passed into law by the Senate soon, as early as later this evening. Keep in mind that all spending will be spread out over roughly two years.
Public Spending, Investment and Loan Guarantees - Total: $61.9 billion
Source: Conference Report "Joint Explanatory Statement - Division A" at House Rules Committee
Research, Development and Demonstration - Subtotal: $8.2 billion
- $2.5 billion for applied research and development activities relating to renewable energy and energy efficiency. It looks like this is to be directed to programs administered by the Office of Energy Efficiency and Renewable Energy (EERE), including $800 million directed to biomass project, $400 million for geothermal projects, and $50 million to improve the efficiency of information and communications technology.
- $2.0 billion for energy R&D programs at the Department of Energy Office of Science, including the National Laboratories.
- Includes $400 million for the Advanced Research Projects Agency -
Energy (ARPA-e) as authorized by the America COMPETES Act. This is the
first time moneys have been appropriated to fund ARPA-e.
- $3.4 billion for the Fossil Energy Research and Development Program, including $1 billion for fossil energy R&D programs, $800 million for the Clean Coal Power Initiative, $1.52 billion for carbon capture and generation efficiency improvement project grants, and $70 million for geologic carbon sequestration R&D.
- $300 million for renewable energy and energy efficiency research, development, testing and evaluation for the Department of Defense (including $75 million each for the Army, Navy, Air Force and Defense-wide programs).
- $6 billion in loan guarantees for the Innovation Technology Loan Guarantee Program established by the Energy Policy Act of 2005. These loan guarantees are expected to support more than $60 billion in loans for renewable energy technologies and modern transmission technologies.
Energy Efficiency Deployment - Subtotal: $16.9 (plus additional funds for DOD upgrades)
- $4.5 billion for General Services Administration
program to build and upgrade federal buildings to be "high performance
- $3.2 billion for Energy Efficiency and Conservation Block Grant program.
- $5 billion for Weatherization Assistance Program. Another provision expands the eligibility of low-income households for weatherization assistance and increases the maximum funding assistance level per household.
- $3.1 billion for the State Energy Program
- $300 million for the Energy Efficiency Appliance Rebate program and the Energy Star Program to encourage consumer purchases of energy efficient appliances.
- $510 million to rehabilitate and improve the efficiency of housing unites maintained by Native American housing programs.
- $250 million to increase the energy efficiency of low-income housing supported by the Department of Housing and Urban Development (HUD).
- A portion of a $4.24 billion fund for repair and upgrades at Department of Defense facilities is directed to be used to invest in energy efficiency projects. According to this summary at Grist, the funds for efficiency totals $420 million, but I don't see that in the Conference Summary Report.
Electrifying Transportation, Alternative Fuels and Efficient Vehicles - Subtotal: $3 billion
- $2 billion for the Advanced Battery Manufacturing grant program to support the manufacture of advanced vehicles for hybrids, plug-in hybrids and electric vehicles.
- $400 million for transportation electrification activities.
- $300 million for the Alternative Fueled Vehicles Pilot Grant Program (I believe this is to facilitate the use of alternative fueled vehicles by government and perhaps private fleets).
- $300 million is provided for the acquisition of vehicles for the federal fleet. Vehicles must be at least 10 percent more fuel efficient than the vehicles replaced and funds may be used to purchase plug-in hybrid vehicles if they are commercially available before September 30, 2010.
Modernizing the Electrical Grid - Subtotal: $11 billion (and perhaps additional smart grid funding, see below)
- $4.5 billion for the DOE Office of Electricity Delivery and Reliability for activities related to modernizing the electrical grid. Includes $100 million directed to workforce training efforts. Funds may be used for transmission improvements authorized by any subsequent act of Congress.
- A provision (Title XIII) of the Energy
Independence and Security Act of 2007 is amended to provide unspecified
amount of financial support to smart grid demonstration projects. This
indicates that the available funding totals $11 billion for smart-grid
related activities, but I was unable to find a figure in the conference
report. CAP seems to corroborate this figure in their stimulus summary here.
- The borrowing authority of the Bonneville Power Administration and the Western Area Power Authority are each increased by $3.25 billion, which may also help with modernization or expansion of the electricity transmission system operated by BPA in the Pacific Northwest region.
- See also $6 billion loan guarantee program under "Clean Energy
Deployment" above, for which transmission technologies are eligible.
Public Transit and Rail - Subtotal: $16.2 billion
- $8 billion for construction of high speed passenger rail and intercity passenger rail service.
- $1.3 billion for Amtrak (the National Railroad Passenger Corporation) rail investments.
- $6.9 billion for public transit construction, maintenence and upgrades.
New Energy Economy Workforce Development - Subtotal: $0.6 billion (plus additional Jobs Corps money, see below)
- $500 million to fund workforce development activities to prepare workers for careers in renewable energy and energy efficiency as described in the Green Jobs Act of 2007.
- An unspecified portion of the $250 million in funding for the Office of Jobs Corps programs serving at-risk youth will also be directed to provide additional training in careers in the energy efficiency, renewable energy and environmental protection industries.
- See also the $100 million in workforce training for the electricity transmission industry in "Modernizing the Grid Above"
Tax Incentives, Credits and Bonds - Expected total cost of provisions is $20 billion over ten years
Source: Conference Report "Joint Explanatory Statement - Division B" at House Rules Committee
Clean Energy Deployment - Expected cost of provisions totals $14.9 billion over ten years.
- Three year extension of Renewable Energy Production Tax Credit (through December 31, 2012). Expected cost is $13.143 billion over 10 years.
- For facilities placed in service in 2009 or 2010, renewable energy facilities qualified for the Production Tax Credit may claim the 30 percent Investment Tax Credit instead. This allows wind power generators to temporarily claim the up-front ITC instead of the PTC (which pays out over ten years) in order to help them secure financing for projects during the credit freeze. Expected cost is $285 million over 10 years.
- Allows full Investment Tax Credit for facilities financed with federally subsidized financing (previously the ITC was limited in this case) and allows full 30% credit for small wind generators (previously capped at $500 per kilowatt). Expected cost is $872 million over 10 years.
- Temporarily allows renewable energy projects to claim a grant in lieu of the Production Tax Credit or Investment Tax Credit at a value of 30% of the project cost (mimicing the ITC). Qualifying projects that begin construction in 2009 or 2010 are eligible. This essentially makes the PTC and ITC fully refundable for qualifying renewable energy facilities, which typically rely on financial institutions to claim the value of the tax credit. With financial institutions not profitable at this time, they do not have sufficient tax liability to continue offering this service to renewable energy facilities. This provision ensures that the full value of the incentives can be secured by renewable energy projects even during the financial crisis.
- Authorizes $1.6 billion for Clean Renewable Energy Bonds (CREBs Bonds) to help finance the construction of new renewable energy facilities owned/operated by non-profit entities, including public power providers, state/municipal/tribal governments, and electric cooperatives. These non-profit entities cannot claim the Production Tax Credit or Investment Tax Credits. Expected to cost $578 million over 10 years.
Energy Efficiency Deployment - Expected cost of provisions totals $2.8 billion over ten years
- Authorizes $2.4 billion for Qualified Energy Conservation Bonds to finance state/municipal/tribal government programs to reduce energy consumption and greenhouse gas emissions. The bonds may also be used for programs in which utilities provide ratepayers with energy-efficient property and recoub the expense over time in rates. Expected to cost $803 million over 10 years.
- Tax credits for energy efficient home improvements are extended through 2010 and increased from 10% to 30% of qualified expenses paid for efficiency upgrades. Expected cost is $2.034 billion over 10 years.
Electrifying Transportation, Alternative Fuels and Efficient Vehicles - Expected cost of provisions totals $2.1 billion over ten years
- Business and individual tax credits for alternative fuel pumps and refueling infrastructure is temporarily increased from 30% to 50% of qualifying costs for 2009 and 2010, with the exception of hydrogen fueling pumps, which remain capped at 30%. Expected cost is $54 million over 10 years.
- Increases tax credit for purchase of plug-in hybrid electric vehicles, allowing larger credits for vehicles with larger batteries. The base amount of the credit is $2,500. If the qualified vehicle draws propulsion from a battery with at least 5 kilowatt hours of capacity, the credit is increased by $417, plus another $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours up to 16 kilowatt hours. Expected cost is $2.002 billion over ten years.
- Parity is provided between the employer tax credit for fringe benefits for transit and parking offered to employees. Previously the credit for transit benefits was lower than for parking benefits. The bill sets maximum credit for fringe parking and transit benefits at $230 per month. Expected cost is $192 million over ten years.