Last week I fled the snowstorms of Colorado for the spring cherry blossoms in Washington DC to lobby Congress on energy tax reform as part of the Advanced Energy Economy’s (AEE) first regional chapter fly-in. Companies and clean energy organizations from all over the country converged in DC to talk to House Ways and Means and Senate Finance Committee Members of Congress and senior staff. We had companies and associations from North Carolina, Arkansas, Boston, Michigan, California, Maryland, Minnesota and more. Ed Williams, the CEO of Novinda, was the industry advocate rounding out CCIA’s team.
Despite the historic gridlock in Congress there is a real bipartisan push to reform the tax code. One message nobody disagreed with is that our current tax policy is broken and because we don’t have a national energy policy, energy tax policy is the driving force for cleantech.
The overall theme of our message was promoting a smarter tax policy – one that is technology neutral, outcomes based and sunsets when a particular goal is met. Unfortunately, the various tax policies benefitting cleantech are composed of one, two and five year sunsets and reauthorizations that combine to create artificial cliffs prohibiting planning and investment. We need to look no further than the recent brinksmanship and damage done by the recent one-year extension of the wind PTC. Instead of a one-year extension of the wind PTC, Congress needs to set a goal – like 5% of our baseload electrical energy from wind or X amount of gigawatts deployed, then the tax benefit sunsets.
Another example I used was in the transportation sector. Congress should set a goal to reduce foreign imported oil for transportation and any domestic technology (electric vehicles, natural gas vehicles, advanced engine efficiencies, biofuels, more transit etc.) that helps to accomplish the goal gets a tax incentive. When the goal is achieved then the tax break goes away. This is especially important in the current context of many traditional energy industries getting tax breaks baked into our tax code with no sunset provisions. The current tax system picks winners and losers and distorts markets thereby decreasing and sometimes flat-out discouraging investment in new innovative technologies.
Democratic and Republican members were impressed that a group came to DC not asking for a handout and volunteering for a sunset to a potential tax provision benefitting their industry. This message especially resonated with Senate Majority Leader Harry Reid’s staff and Energy Committee Ranking Member Senator Lisa Murkowski’s staff.
While this was more of a 30,000-foot discussion on energy tax policy, if tax reform bogs down again in the DC swamp then cleantech needs to be prepared to fight for specific provisions in another temporary tax extenders package. This is of course if we can walk and chew gum at the same time. I’m confident CCIA, AEE and its members can do just that.