Photo Credit: Larry Downing, Reuters
The votes have been cast and the dust has settled, and it is now clear that Democrats were able to score some significant points in the 2012 election. For the advocates of wind, solar, and biomass projects across the U.S., however, the key question is what this means for the future of federal renewable energy policy.
Of course, the big news of the night was the re-election of President Barack Obama. President Obama has been a consistent supporter of renewable energy of all types, and has publically endorsed an extension of the vitally important federal Production Tax Credit (“PTC”).
Governor Romney, on the other hand, appeared to be less enthusiatic about the PTC. As pointed out in an excellent article by Laura DiMugno in North American WindPower, Gov. Romney stated in July that he was in favor of letting the PTC expire, but then revised that opinion to support a phase-out of the credit at a late-October campaign event in Iowa. “We will support nuclear and renewables but phase out subsidies once an industry is on its feet.” Romney said.
Fortunately, the uncertainty of the election is now behind us, and with voters showing strong support for Democrats across the board, it is much more likely that President Obama will have the political capital necessary to ensure continuing, consistent support of the various renewables industries.
With the imminent consideration of the wind energy Production Tax Credit on the immediate horizon, and a more broad evaluation of tax incentives for renewables likely to occur over the next legislative session, it is extremely important that the renewable industries continue to find strong support in the U.S. Senate. With this in mind, taking a broad look, the fact that the Democratic Party has maintained its majority should be excellent news for advocates of renewable energy.
More specifically, renewable project developers have been fortunate to find a number of staunch allies on the floor of the Senate, and for the most part this core of support appears to have remained largely in-tact through the election. Of particular note, Republican Sen. Scott Brown of Massachusetts (who co-sponsored a bipartisan four-year PTC extension bill) appears likely to lose his bid for re-election, but he will be replaced by Democrat Elizabeth Warren who is likely to share his support for the PTC. Many other stalwart advocates of renewables, such Sens. Chuck Grassley (IA), Mark Udall (CO), Al Franken (MN) and Ron Wyden (OR), were not up for re-election in 2012.
Additionally, as Ben German of The Hill’s Global Affairs Blog points out, the election also has a significant impact on key Senate committees relating to energy issues. Of particular importance, Sen. Jeff Bingaman (D-N.M.) is retiring and will step down as Chairman of the Energy and Natural Resources Committee. Because Democrats retained control of the Senate, the chairmanship will likely pass to Sen. Ron Wyden (D-Ore.), rather than passing to Sen. Lisa Murkowski (R-AK). Sen. Murkowski, who will likely be the ranking member of the Energy and Natural Resources Committee, has said in the past that she is in favor of a phase-out of the PTC. As quoted by Nick Juliano, Sen. Murkowski has stated “I’m in the camp that says we need to figure out how we phase down, how we transition out, but I’m also not one that just wants to cut it off cold turkey.”
Leading up to the 2012 election, Democrats held 190 seats as compared to Republicans 240 seats in the U.S. House of Representatives. Increasing, or at the very least maintaing, this number is extremely important for the renewable industries, as there are a number of Representatives who are willing to reach across the aisle in support of renewable energy. With this in mind, it is fortunate that voters in the 2012 election appear to have looked favorably upon Democrats. With a number of races still too close to call as of the time of this writing, it appears very likely that the Democrats will manage to win a few additional seats in the House, but those gains will fall short of taking back control from the Republicans.
Of particular relevance to wind developers, however, is how the most vocal opponents of the federal Production Tax Credit have fared. In September, 47 House Republicans signed a letter to House Speaker John Boehner asking that the PTC not be extended. Using those signatories as a representative group of PTC opponents, it appears that the core group of PTC opponents in the House remains largely in-tact. Specifically, 43 of the 47 signatories were reelected. Of those four, one successfully ran for Senate (Jeff Flake of Arizona), and three were replaced by Republicans (Jeff Flake, Cliff Stearns of Florida, and Jeff Landry of Louisiana). Only one signatory of the anti-PTC letter has been replaced by a Democrat, as Joe Walsh of Illinois lost to Tammy Duckworth.
Of course, not all of the excitement yesterday was at the federal level, as renewable project developers also had significant stake in a number of state-level races. With the continued support key incentives and state Renewable Energy Standards hanging in the balance, these races also deserve some commentary, but that analysis will have to be left for another day.