President Barack Obama has submitted to Congress his fiscal year 2014 budget request, which includes increased funding for clean energy initiatives and calls for a permanent and refundable production tax credit (PTC).
A fact sheet released with the budget describes some of its components that are intended to make the U.S. ‘the leader in the clean energy sector and bring about a clean energy economy with new companies and jobs.’
According to the fact sheet, the budget proposes to boost funding for work on clean energy technology across all federal agencies to $7.9 billion – a 30% increase over 2012's enacted level. The U.S. Department of Energy (DOE) would receive $6.2 billion committed to clean energy technology – a 40% increase over 2012's enacted level.
For example, the budget would give the DOE $615 million to "increase the use and reduce the costs of clean renewable power from solar, wind, geothermal and water energy," as well as $80 million to help integrate renewable energy into the grid. The budget also provides the DOE's Advanced Research Projects Agency – Energy with $379 million to fund energy-related research.
In addition, eight agencies at the U.S. Department of Agriculture would receive a total of $255 million to help advance clean energy development in rural regions, according to the fact sheet. The budget also supports $4 billion in loans to rural utilities in support of clean energy generation, as well as $238 million in loan guarantees and grants to help renewable energy development among farmers and rural businesses.
The U.S. Department of the Interior would receive increased funding for the development of renewable energy and transmission projects on federal property, including $100 million to help "maintain capacity to review and permit new renewable energy projects on federal lands and waters," according to the fact sheet.
Proposed policies
The proposed budget also includes new policies meant to help spur clean energy development. Perhaps most notable is President Obama's call for making the PTC both permanent and refundable. The fact sheet says this would "provide a strong, consistent incentive to encourage investments in renewable energy technologies and to help meet our goal to double generation from wind, solar and geothermal sources by 2020."
Robert Gramlich, interim CEO of the American Wind Energy Association, says the permanent and refundable PTC would help increase wind development and provide additional pools of capital. But, he adds, the prospects of passage are far from a given at this point.
"Given the current legislative cycle," he says, "it's unclear how Congress will react to the timing and scope of the president's budget proposal."
The budget also aims to repeal over $4 billion in fossil-fuel tax subsidies annually for 10 years. However, ML Strategies, a Washington, D.C.-based government relations consulting group, notes that Obama's proposals do not equal law.
‘Many of these proposals are not new, and some have been rejected,’ the company says in its assessment of the budget. ‘The repeal of $40 billion in tax provisions for fossil-fuel extraction and refining is opposed by most Republicans and oil-state Democrats.
‘In light of these realities, the budget remains an aspirational document highlighting the administration's priorities, since the actual appropriation levels depend on Congress,’ the company concludes.
