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Green energy faces GOP headwinds on Hill

- The Washington Times - Sunday, December 5, 2010

The Obama administration lavished billions of stimulus dollars on wind-power producers and other renewable-energy interests, but the whirl of the turbines may slow dramatically as budget-cutting Republicans take their seats in the next Congress.

The climate — at least on Capitol Hill — has changed dramatically for the wind-power industry, which is dealing with President Obama's stalled green-energy agenda as well as the loss of old friends in Washington and the nation's statehouses and the rise to power of "tea party"-backed Republicans who are skeptical of government supports for the industry.

"The incoming Republican majority in the House of Representatives will almost certainly present obstacles toward the wind industry's agenda on Capitol Hill," the trade publication North American Windpower recently reported, including an end to direct cash grants from Mr. Obama's stimulus package and more delays in formulating the long-awaited federal standard for the use of renewable-energy sources by the nation's utilities.

The Republican ascendancy likely will curtail the Obama administration's financial support for wind farms and other renewable-energy interests, which have received more than $7 billion in stimulus money since 2009.

The midterm elections dealt a "shellacking" to Mr. Obama's agenda and changed the political and lobbying calculus for industries and corporate interests across the landscape.

In one sign of the times for wind-energy boosters, Senate Finance Committee Chairman Max Baucus, Montana Democrat, announced late last week that he will push immediately to extend two programs for direct federal subsidies and manufacturing tax credits for solar, wind and other renewable energy industries before the lame-duck session of Congress adjourns at the end of the month.

Mr. Obama's stimulus plan offered grants of up to 30 percent of construction costs to developers of wind farms, solar plants and other types of projects, an alternative to the traditional renewable-energy tax credit that has lost its attractiveness in the struggling economy.

Though many Republicans have supported renewable energy and the tax credits, they are mindful of the recent voter backlash about excessive government spending and the growing federal deficit. Key GOP lawmakers have expressed skepticism about Mr. Obama's stimulus program in general and its "green jobs" component in particular.

"The government is running out of money," Senate Minority Leader Mitch McConnell, Kentucky Republican, said last week. "Constituents asked for job growth ... not for help to special-interest groups."

The election turnover means that wind-energy champions on Capitol Hill, such as retiring Sen. Byron L. Dorgan, North Dakota Democrat, will be gone. In the House, all the major candidates in the spirited race among Republicans for the chairmanship of the powerful House Energy and Commerce Committee opposed Mr. Obama's "cap-and-trade" energy bill and are seen as more friendly to traditional energy interests, such as gas and coal, than to wind power.

Roughly $5.4 billion of the more than $7 billion in stimulus money has been awarded through the Treasury Department grant program. The Energy Department has awarded the other $1.64 billion, including $93 million to wind-energy projects.

While Republicans appear unwilling to extend the Treasury Department program, the Obama administration, lobbying groups and energy company executives have been working to salvage the program, even before the GOP's landslide victory in the midterms.

In October, the White House proposed asking Congress to extend the grants by redirecting $2.5 billion in loan-guarantee funds. Vice President Joseph R. Biden Jr. argued that giving upfront cash to producers has been "hugely successful" and has led to roughly 4,000 clean-energy projects over the past two years.

In addition, environmental groups and Washington-based organizations representing wind and other renewable-energy sources sent letters to congressional leaders asking them to save the program by extending the deadline for construction starts.

"If such legislation is not enacted during the lame-duck session, we will experience a ... loss of American jobs and further transfer of clean-energy leadership to other countries," said a letter last month signed by the trade groups, including the American Wind Energy Association.

Beyond the White House, wind advocates see Mr. Baucus as a key player. He told a trade publication after the midterms that extending the program was a priority and that he was "going to find a place" for it either in December or January.

Rob Sargent, an energy program director for Environment America, acknowledged that extending the Treasury program "will be difficult in the lame-duck" session and said he could not predict what might happen in the next Congress.

While wind-energy proponents hailed the recent federal approval of the major Cape Wind project off Massachusetts, the industry overall is struggling to maintain momentum, even with the stimulus money. After a record year in 2009 of adding megawatts, fewer winds farms are being built with growth slowing to 2007 levels.

"We're working strongly to make our case," Mr. Sargent said.

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