Late last week, the House of Representatives passed HR-1, the Continuing Resolution legislation needed to fund federal government operations through to September 30, the end of the 2011 fiscal year.
The bill includes the largest single discretionary spending cut in U.S. history eliminating $100 billion in spending from what the Obama administration asked for last year. It also initiates spending reductions that will occur throughout the next year. Unless there is another temporary measure, the final continuing resolution must be passed by the Senate and signed by the President by March 4 in order to avoid a government shutdown.
The full text of HR-1 as introduced in the House (prior to any amendments) can be found at this link. The members filed 162 amendments of which sixty-eight were rejected or withdrawn. The majority were accepted.
Windaction.org advocated for an amendment to the bill that would eliminate $5 billion from the budget by prohibiting the use of funds to support the Section 1603 Cash Grant program. This program enables wind developers to secure direct monetary outlays from the Federal government to cover 30% of a project's qualifying cost, no questions asked.
Unfortunately, we were unable to get the amendment in place, but there will be other opportunities this year to make our case known.
However, HR-1 did take an important step toward weakening the Guarantee Loan Authority program administered by the Department of Energy. Section 3001 of the bill rescinds all balances allocated under the stimulus bill for the 1705 loan guarantee program.
Under the program the Department of Energy pays the credit subsidy costs of loan guarantees and provides a guarantee for up to 80 percent of a loan for qualifying renewable energy systems, electric power transmission systems or leading edge biofuels projects. Thus, a significant portion of the risk is shifted to the American public rather than where it belongs, with investors and their shareholders.
The impact of this action is likely to be significant on whether investment funding will be available for renewable energy projects, but for now the wind industry is declaring this part of the law dead on arrival.
But maybe not. Recall the October 2010 memo to the White House by Carol Browner, Ron Klain and Larry Summers which raised concerns over the "relatively small private equity (as low as 10%) developers put into projects" thanks to the loan guarantee.
With the Continuing Resolution now behind them, our House Representatives are home this week meeting with their constituents. This is an opportunity to meet with your representative and make your concerns known.
If you contacted your representative last week about cutting Section 1603 from the Continuing Resolution ask why no such amendment was offered. If not, take the time to discuss this important budget and policy issue with him/her. Our representatives need to understand that there are cheaper, much more effective opportunities for achieving clean energy goals. Instead, with Section 1603 funding we've succeeded in adopting an energy policy that drives up construction and energy costs while eliminating any incentive to build projects that meet the highest performance standards.