Senate Democrats

Democrats are Investing in America’s Future: Clean Energy

Since the 111th Congress began, Democrats have been working to create jobs across the country by making major new investments in clean energy.  These efforts were realized most recently when Congress passed the American Recovery and Reinvestment Act, followed by the Omnibus Appropriations Act of 2009, and most recently the Fiscal Year 2010 Budget Resolution.  Going forward, Democrats will continue to focus on making major new investments in energy efficiency and renewable energy which will help make America the engine of innovation in the 21st Century.

This Fact Sheet summarizes the clean energy provisions included in the American Recovery and Reinvestment Act, the Omnibus Appropriations Act of 2009, and the Fiscal Year 2010 Budget Resolution.

American Recovery and Reinvestment Act

The American Recovery and Reinvestment Act, which wassigned by President Obama on February 17, 2009, included approximately $67 billion[1] to support the development of clean energy.  These investments in renewable energy and energy efficiency will be a tool to spur economic growth and job creation, while simultaneously better positioning our nation’s energy policy for years to come.  The following summarizes how some of the $67 billion was allocated:

·         Renewable energy production tax credit.  The American Recovery and Reinvestment Act included a three year extension of the renewable energy production tax credit which is needed to ensure future investments in wind, geothermal, and biomass energy ($13.1 billion).

·         Electricity transmission.  The American Recovery and Reinvestment Act included funding for the Bonneville and Western Power Administrations to finance and facilitate the development of renewable energy transmission capacity ($6.5 billion; $3.25 billion each).

·         Loan guarantees.  The American Recovery and Reinvestment Act included funding to finance loan guarantees for renewable energy and transmission projects that will finance $60 billion in renewable energy and transmission projects ($6 billion).

·         Weatherization Assistance Grant Program.  The American Recovery and Reinvestment Act includedfunding for weatherization assistance program which is estimated to create 375,000 jobs, directly and indirectly, and produce $13.6 billion in energy and non-energy related benefits ($5 billion).

·         Electricity grid modernization/smart grid.  The American Recovery and Reinvestment Act included funding that will help the electricity grid to become more efficient and provide the training necessary to build and maintain the grid. These funds will help create a smart grid that allows customers to manage their energy consumption while giving electricity providers the real-time knowledge necessary to meet electricity demand.  The ability to more effectively manage supply and demand is essential to the integration of large-scale renewable resources like wind and solar ($4.5 billion).

·         Energy Efficiency and Conservation Block Grants. The American Recovery and Reinvestment Act included funding for cities, counties, and Indian tribes so that they can reduce energy use and fossil fuel emissions, and make improvements in energy efficiency ($3.2 billion).

·         State Energy Program.  The American Recovery and Reinvestment Act included funding for the State Energy Program which supports renewable energy and energy efficiency programs ($3.1 billion).

·         Office of Energy Efficiency and Renewable Energy.  The American Recovery and Reinvestment Act included funding for the Department of Energy’s Office of Energy Efficiency and Renewable Energy which is responsible for the broad market adoption of clean energy technology and the commercialization of renewable energy and energy efficiency technologies ($2.5 billion).

·         Advanced batteries.  The American Recovery and Reinvestment Act included grant funding for advanced battery manufacturing which will be critical in creating battery manufacturing jobs in the United States.  Currently, nearly all the batteries made for hybrid electric vehicles are manufactured in the Pacific Rim, despite the fact that U.S. demand for hybrid vehicles is strong and much more of the research and development on the batteries takes place in the U.S. ($2 billion).

Omnibus Appropriations Act of 2009

The Omnibus Appropriations Act of 2009 makes key investments to support renewable energy, energy efficiency, and green job creation.  The legislation provides $1.93 billion to the Department of Energy’s Office of Energy Efficiency and Renewable Energy, which is $206 million more than was appropriated in Fiscal Year 2008.  In contrast, former President Bush’s first budget request proposed spending $1.03 billion for the Office of Energy Efficiency and Renewable Energy.  In his last budget request, President Bush proposed spending $1.26 billion for the Office of Energy Efficiency and Renewable Energy, which represents a cumulative increase of only $230 million during the entire term of the prior Administration.

The following describes investments in the Omnibus Appropriations Act of 2009 devoted to the Office of Energy Efficiency and Renewable Energy:

·         Weatherization.  The Omnibus Appropriations Act appropriates $200 million for the weatherization assistance program.  This funding will create 15,000 jobs (10,400 direct and 4,600 indirect) and result in $413 in reduced first-year energy costs for the average lower-income family that receives assistance.  President Bush attempted to eliminate this program in his last budget request to Congress.

·         Vehicle technology.  The Omnibus Appropriations Act provides $273 million for the vehicle technology improvements program, which funds research and development on hybrid and plug-in hybrid vehicles, advanced batteries, and use of alternative fuel blends.  The need to invest in technologies like advanced batteries is important because nearly all the batteries made for hybrid electric vehicles are manufactured in the Pacific Rim, despite the fact that U.S. demand for hybrid vehicles is strong and much more of the research and development on the batteries takes place in the United States.

·         Solar.  The Omnibus Appropriations Act provides $175 million to the DOE’s Solar Energy Technologies Program.  This funding will further reduce the costs of solar energy technology and improve the efficiency of the technology to allow even greater market penetration. 

·         Geothermal.  The Omnibus Appropriations Act provides $44 million for geothermal energy research and development.  The funding will be used to find, access, and use the nation’s geothermal resources, which the United States Geological Survey estimate at a combined 560,000 megawatts (conventional and enhanced).

Fiscal Year 2010 Budget Resolution

The Democratic Budget Resolution, which is being considered in the Senate this week, includes an energy reserve fund to accommodate legislation to reduce our nation’s dependence on oil, produce green jobs, promote renewable energy development, improve electricity transmission, create a clean energy investment fund, and encouraging conservation and efficiency. 

The reserve fund could also be used for legislation to enact energy provisions; extend the permissible term of power purchase agreements used by federal agencies to acquire renewable energy; expand the economic recovery package’s investments in transmission infrastructure and smart grid technology; and create a Clean Energy Investment Fund, which could help the transition to a low-carbon economy by using financing such as direct loans and loan guarantees to invest in clean energy technologies.

The Democratic Budget Resolution also provides increases for the Energy Efficiency and Renewable Energy program, which will enable investments in important priorities such as wind, solar, geothermal, biomass and biorefinery research and development, hydrogen, vehicle/building technologies and the weatherization assistance program.  The budget supports increased funding for the Energy Efficiency and Conservation Block Grant Program and the development of low carbon coal technologies such as carbon capture and sequestration.  The budget also supports continued funding increases for the Department of Energy’s loan guarantee program.



[1] Congressional Research Service, "Energy Provisions in the American Recovery and Reinvestment Act of 2009 (P.L. 111-5)," March 12, 2009, http://apps.crs.gov/products/r/html/R40412.html

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