Category: Business

Source: United States Senator for Hawaii Brian Schatz

WASHINGTON – During a debate on the Republican tax bill, U.S. Senator Brian Schatz (D-Hawai‘i) condemned the bill’s provisions to gut clean energy which will raise people’s energy bills by more than a hundred dollars starting next year and make blackouts and power outages more common across the country.

“This is the worst piece of legislation for the planet in the history of our country, and it’s not even close. Republicans are effectively codifying Big Oil’s wish list into law, without exception. They are killing clean energy. They are subsidizing coal. They are dramatically expanding oil and gas leasing. They’re purposely jacking up energy prices and creating shortages and creating shortages,” said Senator Schatz. “And for what? It’s to find enough savings to shovel tens, if not hundreds, of thousands of dollars into the pockets of individual billionaires.”

Senator Schatz continued, “This bill will kill 300,000 jobs in wind and solar per year. We’re going to lose out on $450 billion in capital as thousands of projects go under. And because of that, we’re going to generate about 500GW less energy in the next decade. We are going to have energy shortages as a result of this legislation.”

A transcript of Senator Schatz’s remarks is below. Video is available here.

There are a lot of people in this chamber and across the country who, on a non-ideological basis, want a consistent tax code so that businesses can invest with certainty and predictability. So let’s look at some of the numbers here in terms of the impact of this bill. This bill will kill 300,000 jobs in wind and solar per year. We’re going to lose out on $450 billion in capital as thousands of projects go under. And because of that, we’re going to generate about 500GW less energy in the next decade.

Now, there was a time, and I lived through it as a politician, there was a time when people who wanted to take climate action had to argue for that climate action because it is a planetary emergency and there were tradeoffs. And people on the other side said, “look, as we try to take action to deal with this planetary crisis, we can’t create shortages, we can’t increase prices, we can’t impede economic progress.” All that has flipped.

This bill will create shortages. This bill will impede economic progress. This bill will increase prices. The 500GW less energy in the next decade is pretty much exactly the amount of energy that we’re going to need to meet rising demand. We are going to have energy shortages as a result of this legislation.

And you don’t have to love clean energy or be an environmentalist. And I love clean energy, and I’m an environmentalist. But you don’t have to care about the climate. I think you should. You don’t have to care about the climate to understand that this is a basic question of supply and demand. Energy demand is soaring for the first time in decades, largely not exclusively, but largely because of AI data centers. And our best chance of meeting it in the next few years is with wind and solar, not oil and gas, even nuclear and geothermal are going to take a while.

That is not just a political talking point or a preference of mine. It’s just a fact that gas turbines are stuck in a years-long backlog. It’s also a fact that 80 percent of the new capacity on the grid last year came from solar and storage. It’s growing, it’s cheap, it works. And there are hundreds more projects that are in the pipeline waiting to be hooked up.

So the idea that we’re going to kill the only energy that can be brought online in the short run, the very same week that half the country was meeting, melting in a record heat wave which left tens of thousands without power is beyond absurd.

Let’s talk about how this bill does all of this damage. Specifically, it creates an impossible deadline for projects to be operational in order to claim the clean energy tax credits. Remember, these clean energy tax cuts are federal law. They’re on the books. So when you have a federal statute, it is not unreasonable as an investor to say, look, I got this tax credit. I’m going to get X number, X percent back for my initial investment. And you do the pro forma, you do the underwriting. And you figure out that the thing pencils out. And now what they’re saying is that you got to be operational in 60 days. If anyone has even built a deck in their front yard or tried to do an extension – nothing gets built in 60 days. Certainly not a clean energy project, and it has to be placed in service. What does placed in service mean? It means not only do you have to have the thing built, you have to have a power purchase agreement through your public service commission or public utilities commission. You have to have a deal in place in the next 60 days after enactment, or you get nothing.

So imagine you’re a company investing in a solar battery storage project. You’ve already put money down, you’ve secured land and a power purchase agreement, and you’re working on permits. And when you started the project, the tax code said you could claim a credit to cover the upfront costs. Now, unless you are fully operational, you’re out of luck. On average, a project takes four years to go through the full process. So even if you’ve already started that progress, you now have very, very little time to get it done. We are going to strand hundreds of billions of dollars in capital. And so the impact on price is going to be crazy. The impact on jobs is going to be crazy. But the impact on America as an investable proposition is the most dangerous part of this. I don’t know that we’ve ever, through federal law, made a big subsidy, made a big bet on a certain industry. And then halfway through that process, said, never mind. We didn’t mean that. You’re stuck.

According to the Edison Electric Institute. And by the way, I can guarantee you this is the first and maybe last time I will ever, ever quote the Edison Electric Institute. That’ll cost people, not companies, people, ratepayers $60 billion in this decade alone. Your electric bills are about to go up. A representative of a solar company in Hawaii put it this way. It is really unclear in the current version of the bill what the renewable energy industry even looks like, if it were passed today.

An owner of a solar company in Montana, worried that the credits disappearing would force them to lay off half of his workers. He says, “Montana is deeply red, but it’s also a very practical place. And so green energy renewables became a taboo phrase somehow. The practical energy needs are undeniable, so we can get past our disagreements and about phraseology. We realize that electrons, watts, amps, it’s all cheaper.” A representative of a wind turbine company in Colorado said, “I don’t look at what we do as green or blue or red. An electron doesn’t have a color.” And that’s the point. Electrons don’t have color. Wanting cheap, abundant energy is not woke. Wanting a livable planet for today and for future generations is not radical and wanting reliable power and to avoid blackouts and brownouts is not a leftist project. But even if you set all of that aside for a minute, the states that have benefited the most from these investments are Republican states.

According to estimates, nearly three quarters of clean energy manufacturing facilities are located in Republican states. It means that Republicans are going to pay more for energy. It means Republicans will lose jobs in clean energy because of a Republican bill. It means Republicans are going to have more blackouts in their homes and businesses. Gutting clean energy is not somehow owning the libs, and at least some Republicans in the Senate and House understand that even if their votes have not manifested to say otherwise.

Here’s a letter from 21 House Republicans earlier this year, “As our conference has long believed, and all of the above energy approach combined with a robust, advanced manufacturing sector will help support the United States position as a global energy leader. Countless American companies are utilizing sector wide energy tax credits, many of which have enjoyed broad support in Congress to make major investments in domestic energy production and infrastructure for traditional and renewable sources alike.” And it goes on, “As energy demand continues to skyrocket. Any modifications that inhibit our ability to deploy new energy production risks sparking an energy crisis risks sparking an energy crisis.” 21 House Republicans are worried about an energy crisis imposed by the Republican Congress. It goes on. “This is especially true for energy credits with direct pass through benefit to ratepayers, where such repeals would increase utility bills the very next day – would increase utility bills the very next day.”

This is not me, progressive Senator from the state of Hawai‘i, who has made a career out of fighting climate change. This is 21 House Republicans saying, like, “we’re going to create a crisis here. Maybe we shouldn’t pass this thing. A lot of this stuff benefits us. If we’re all out here talking about all of the above. Why are we cutting off our nose to spite our face?” Just because someone wants a talking point? People are literally going to lose their jobs immediately upon enactment. America is going to become a very challenging place to make major investments in, immediately upon enactment. The AI industry may move abroad immediately upon enactment, and prices will go up pretty much right away as well.

A group of 175 mayors and local leaders wrote, “For the first time, state and local governments, as well as essential nonprofit community organizations such as houses of worship, hospitals and schools, can access the same clean energy tax credits as the private sector through elective pay. This has led to major projects in our communities, like solar installations for town halls, alternative fueling infrastructure, and charging stations for local government fleets. After one year of direct pay implementation, over 1200 organizations, including 500 state and local governments are already accessing these incentives. We are excited about these projects and the benefits that they will bring to our communities. However, as local leaders, we are concerned that repealing these tax credits would create economic uncertainty in our communities as it would prevent us from accessing those important benefits.”

You know, I grew up to understand Republicans were for avoiding unintended consequences. Republicans were against radical change too quickly. Republicans wanted a solid business environment that people could rely upon. This is literally none of that. This is ideology manifesting itself as energy policy. And what’s going to happen is people are going to lose their jobs and pay tons more for electricity.

The building trades unions called this bill “the biggest job killing bill in the history of this country.”  And they go on. “Simply put, it is the equivalent of terminating more than 1000 Keystone XL pipeline projects.” I’ve been here for a while. Keystone XL was a big deal to our friends in labor. I had some very tough conversations with my friends and labor about how important that project was to them, and how it was in tension with some of our climate goals.

But listen to what they say. It is the equivalent of terminating 1,000 Keystone XL pipeline projects. These guys are not me or Jeff Merkley or Eddie Markey, or Sheldon Whitehouse, or Martin Heinrich, or Rep Ocasio-Cortez, or any climate advocate. This is the building trades, and they’re saying this is the biggest job killer, perhaps, perhaps in American history. We actually don’t have to do this.

The impetus behind this bill was essentially border spending and preventing the Trump tax cuts from expiring. And then a bunch of stuff got added on because that’s what happens. And we were there for our own version of this, our own BBB, our own Build Back Better. And everybody in your party piles on with something new. And then the thing becomes a really challenging thing to pass, because everybody’s got their hobbyhorse and somebody’s hobbyhorse is not just to have an all of the above energy strategy, but to go out of your way to kill clean energy.  It doesn’t matter that it’s going to raise prices. It doesn’t matter that it’s going to kill jobs.

People at all levels, in the public and private sectors across the political spectrum are all saying the same thing, which is this is a bad bill for regular people, for the economy and for the planet. One of the great things about our climate Bill was that it made what was good for the planet also good for the economy. Clean energy become became eminently profitable for businesses and widely accessible to consumers. And we made a choice there because some in our party didn’t like the basic premise. They were attached to the idea of personal political, economic sacrifice because the planet is in peril.

And I understand that instinct. I understand that instinct. But we’ve paved a new path, and we decided, look, there’s enough technology out there. There are abundant energy sources out there that we can actually solve our planetary crisis and create jobs and lower prices, and we can do it in such a way that blue states and red states, urban rural, suburban all benefit. Republicans are on the verge of undoing all of that, even though it will hurt their constituents. And in doing so, we’re virtually guaranteeing China’s dominance in clean energy for decades to come. Because if you’re a China, you cannot believe your luck. Your biggest competitor is willingly forfeiting the fight over who controls the energy technologies of the future because Donald Trump is too busy trying to get us back to the pre-industrial age.

This is the worst piece of legislation for the planet in the history of our country, and it’s not even close. Republicans are effectively codifying Big Oil’s wish list into law, without exception. They are killing clean energy. They are subsidizing coal. They are dramatically expanding oil and gas leasing. They’re purposely jacking up energy prices and creating shortages and creating shortages. And for what? Partially, it’s to find enough savings to shovel tens, if not hundreds of thousands of dollars into the pockets of individual billionaires. But even kicking more than 16 million people off of health care coverage, denying food to the poor, and adding almost $5 trillion to the national debt was not enough.

People voted for Donald Trump for all sorts of reasons, but no one voted for higher energy bills. No one voted for more frequent blackouts and brownouts and dirtier air and water. No one, whether you’re a Democrat or a Republican or independent, wants that. I want to be clear this fight is far from over. This fight over this bill is far from over.

But even if this bill passes, it will set us back. But the fight for the planet is bigger than any one bill or vote, and that includes the big climate bill that we passed in the previous administration. And as any movement that has successfully mobilized and made changes knows, progress is not linear. Progress always has setbacks and frustrations, and progress is not assured.

States like Hawai‘i will continue to do everything that they can to protect our environment, and the rest of the world will move on without us, because doing nothing in the face of this worsening crisis is simply not an option. But make no mistake, what Congress is doing today will cost all of us in the years and decades to come.