The Inflation Reduction Act Delivers Long-Awaited Federal Action on Clean Energy & Climate

 After a year of fits and starts, after many months of breakthroughs and reversals, the US Senate has passed long-awaited federal action on clean energy back on August 7^th. That was a dramatic reversal from mid-July of 2022, when climate activists were in near total despair suspecting that all hope was thought to be lost. This legislation, which started as “Build Back Better” and has since been retitled as the “Inflation Reduction Act” was also passed by the US House and Signed into law by President Biden on August 16^th.

It was passed as a reconciliation bill so as to avoid needing to clear the legislative filibuster. While clean energy and emissions reductions standards could not get into a budget reconciliation bill, clean energy investments could. So it has a lot of carrots and few regulatory sticks.

The Bipartisan infrastructure package from Nov of 2021 was a bit different. The IRA is more of a tax and spend bill whereas the Bipartisan Infrastructure package was a capital bonding bill. The IRA involves about 10 times more carbon reduction capacity.

When Build Back Better first started, Budget Committee Chair Bernie Sanders wanted 6.5 Trillion for it. Then Biden proposed 3 trillion instead. Then Senator Joe Manchin said he would only accept 1.5 trillion. The IRA is about 10^th of this original amount. However, the climate provisions from BBB are the only part of the package that crossed the finish line intact thanks to public pressure.

Tax credits for clean energy is essentially the same as Gov’t spending. While there is no tax credits for E-bikes, just about about everything in the way of clean energy and climate gets one- Wind, Solar batteries, nuclear power, heat pumps, clean vehicles, insulation, low income families switching appliances and upgrading electric panels etc.

Some of these clean energy federal tax credit expired 3 times in 10 years. Now the Tax credits of around 30% are extended until 2032 which has potential to put the energy transition on steroids.

It is estimated to save households $50 Million on electric bills.

As for clean vehicles, the incentive will now be at the point of sale rather than a buyer having to pay the full costs of the Eclectic Vehicle up front and then filing taxes to get it the incentive.

After close to 30 years of trying to put a price on carbon and other ways to make fossil fuels more expensive, the political resolution ended up being to make the clean stuff cheap rather than the dirty stuff expensive.

 

Read the full statement from MN350 on the IRA here.

 

The IRA has got its fair share of critique lately, namely because a raft of provisions that makes it easier to site harmful facilities in environmental justice communities and promote more oil, gas, and coal extraction. This was the result of the political sausage making process and it is no consolation to front line activists who have been maintain top removal in Appalachia or fighting a pipeline.

One deal was that if we could use the public lands for Renewable Energy then fossil fuel companies should also get leases for drilling on public lands. The side deal, which was agreed to in principle but not in formal bill involves enabling fossil fuel infrastructure to be build more easily, along with reform on easing of permitting for renewable energy infrastructure.

 Because the economics of fossil fuels is becoming increasingly grim, the worst-case scenarios for pipelines and fossil fuel extraction from the bill will not likely happen. But we are trying to drive down the demand for fossil fuel consumption.  

 We are already seeing (for example) many cases of oil and gas leases opening with no bidders, or bidders who ultimately conduct no extraction. For every ton of carbon increased as the result of the IRA, it would be coupled with 25 units of carbon going down.

 The IRA could have gone further in protecting environmental justice communities who have long borne the brunt of dirty energy pollution and climate risk, despite some limited funding for environmental justice projects. It falls short of 40% going to disadvantaged EJ communities. That is below what Build Back Better and Justice 40 would have given.

It is regrettable to see local communities impacted by fossil fuels and climate change are understandably incensed at once again being a bargaining chip sacrificed to make progress on climate. To dig more into the things about the bill that throw impacted communities under the bus and fail to address the root causes of climate change, read this summary in the Guardian or this direct response to the bill from the Indigenous Environmental Network.

Despite it being far from perfect, the IRA is still the single largest federal investment in climate solutions and clean energy action in US history, which is not exactly a high bar. It could be a long-awaited game changer for community-based renewable energy projects:

• For the first time ever, the federal government has ever made an extension of clean energy investment tax credits to be longer than 2-3 years. The Investment Tax Credit cannot be used to help cover the cost of clean energy project is extended long-term through the early 2030. This will create predictability for clean energy developers in helping plan projects for the long term.
• While the base level of the Investment Tax Credit available to any clean energy project regardless of type drops dramatically, the value is increased from 26% to 30% for any project that:
  • Is under 1MW AC and thereby supports development of more local and community-scale energy.
  • Meets prevailing wage and apprenticeship requirements (even if it is over 1MW), which supports family-sustaining jobs and increases racial equity in the workforce.
• There are bonus credits of 10% for projects that are located in designated low-income communities or 20% for projects that deliver at least half of their benefits to low-income residents. Projects that stack these aspects together will qualify for a 40-50% tax credit, which is a major win for ensuring equitable access to clean energy.
• Most importantly, solar tax credits will become refundable, meaning Clean Energy Developers can receive the value of the tax credit directly rather than having to go through an expensive, extended, and uncertain process of trying to find a private investor to partner with to use the tax credits. This will make the process of financing solar projects dramatically cheaper and easier in the years to come.

Overall, what President Biden said at Glasgow was that we will cut our emissions by 53% by 2030.

But the goal is getting emissions to zero most likely closer to 2040 than 2050.  

The bill gives us a chance but is not an endgame. Biden could declare a national climate emergency.

But it is humanity’s best chance to solve the problem.

Minnesota Senate Climate Bills to Advocate for

 

Who represents me?

https://www.gis.lcc.mn.gov/redist2020/Legislative/L2022/senate/interactive/map.html

Minnesota State Senate Elections 2022 (to find candidates in the event your current senator is not running in 2022)

https://ballotpedia.org/Minnesota_State_Senate_elections,_2022

Climate bills that have been presented/proposed in the MN Senate and may be presented again in the 2023 session. Click on any of the bills to see its exact language.

LAND MANAGEMENT 

 SF 3711 Appropriating money for the Forever Green Agriculture, perennial regenerative crops 

 SF 1594 Treated Seed Policy Changes, tracking distribution and disposal of seeds 

 SF1113 Soil-healthy farming goals establishment and financial incentives creation

 SF 956 Urban Reforestation bond issue and appropriation (not funded)

 SF4310 Funding to farm-to-school grants increase

 SF 2272 Lawns to Legumes grant program appropriations

WATER/AIR 

 SF 4422 Community water systems requirement to inventory service lines and establish plans to replace lead service lines by 2032

 SF 3326    Products containing PFAS disclosure requirement   

 SF 3669 PFAS prohibition in juvenile products

 SF 2809 Statewide Drinking Water Safety Action Plan Appropriation 

 SF 839 Pollution control agency whole effluent toxicity (WET) rules adoption 

 SF 1630 Greenhouse gas emissions-reduction goal; terrestrial sequestration    

ENERGY

 SF2144/HF1427 Solar for Schools establishment and public utility requirements

 SF4089/HF4461 Solar for Schools funding provided

 SF4119/HF4402  Solar Energy Production Incentive program extension

 SF4102/HF3907 Solar PV Installation Cost Contingency Fund Establishment 

 SF3661/HF3621 State Policy for Carbon Capture and Sequestration Technology   

 SF3655/HF3084 Energy Provisions Modifications in State-owned buildings

Land Management Bills

 

SF3711 A one-time appropriation of $20,000,000 from the general fund in fiscal year 2023 for the Forever Green Agriculture Initiative at the University of Minnesota, available until June 30, 2028. By incorporating perennial and winter-annual crops into existing agricultural practices, it will protect the state's natural resources while increasing the efficiency, profitability, and productivity of Minnesota farmers. Of this amount, up to $5,000,000 is for equipment and physical infrastructure to support breeding and agronomic activities necessary to develop perennial and winter-annual crops.

 SF1594 Treated Seed Policy Changes A bill amending existing statutes to make policy changes related to treated seed and requiring treated seed enrollment to stop unreasonable adverse effects on the environment. "Treated seed" means seed that has an agricultural pesticide directly applied to the seed before planting and classified by the United States Environmental Protection Agency as a "treated article or substance" under Code of Federal Regulations. The intention is to mitigate any unreasonable risk to humans or the environment, taking into account the economic, social, and environmental costs and benefits of the use of any pesticide or treated seed.

SF1113  A bill establishing goals for and creating financial incentives for soil-healthy farming.

Building soil health and thereby preventing or minimize erosion and runoff will increase farm income, retain and clean water, increase vegetation on the landscape, sequester carbon, and foster healthier rural residents and pollinators and other wildlife. To accomplish this:

(1) at least 50 percent of Minnesota farmers are to implement cover crops, perennial crops, no-till, or managed rotational grazing by 2030;

(2) 100 percent of Minnesota farmers implement cover crops, perennial crops, no-till, or managed rotational grazing by 2035; and

(3) 100 percent of the state's tillable and grazeable acres employ cover crops, perennial crops, no-till, or managed rotational grazing by 2040.

It also adds a subdivision to existing Statute to require collection and classification of data for soil healthy farming involving The Board of Water and Soil Resources, the University of Minnesota, and Soil and Water Conservation Districts.

SF956   A bill authorizing the sale and issuance of state bonds for urban reforestation. The commissioner of management and budget shall appropriate up to $16,000,000 from the bond proceeds fund to the commissioner of natural resources to give grants to cities, counties, townships, and park and recreation boards in cities of the first class. Planting of shade trees, and replacing of trees lost to forest pests, disease, or storm on public land will provide environmental benefits. A more diverse community forest better able to withstand disease and forest pests.  The commissioner must give priority to grant requests to remove and replace trees with active infestations of emerald ash borer and any tree planted with money under this subdivision must be a climate-adapted species to Minnesota.

SF 4310 A bill appropriating money to increase funding for farm-to-school grants; and authorizing reimbursement of childcare providers who purchase from local farmers; amending existing statute.

SF2272 Lawns to Legumes

A bill appropriating $1,000,000 each in both fiscal years 2022 & 2023 from the general fund to the Board of Water and Soil Resources for the Lawns to Legumes grant program. It provides onetime grants or payments for demonstration projects planting residential lawns with native vegetation and pollinator-friendly forbs and legumes to protect a diversity of pollinators. Grants or payments will cover up to 75 percent of the costs of the project, except that in areas identified by the United States Fish and Wildlife Service as areas where there is a high potential for rusty patched bumble bees to be present for which grants may be awarded for up to 90 percent of the costs of the project.

 

Water and Air Bills 

 

SF 4422   Inventory and establish plans to replace water pipes  A bill requiring community water systems to inventory service lines and establish plans to replace lead service lines by 2032. The presence of lead in drinking water represents a threat to the public health, especially to the health and development of children in Minnesota; that pipes containing lead that connect water mains to homes and other buildings are a primary source of lead in drinking water. A full and complete inventory of all lead service lines in the state does not exist. It will require notices to customers, consumers, and owners; requiring reports; authorizing rulemaking; appropriating money; proposing coding for new law in existing Statutes.

SF3326 Products containing PFAS disclosure requirement   A bill requiring notice of products containing PFAS. It requires rulemaking & proposing a new statute where a manufacturer of a product for sale in the state that contains intentionally added PFAS to a product must submit to a written notice the commissioner of the Pollution Control Agency.     "Perfluoroalkyl and polyfluoroalkyl substances" or "PFAS" means substances that 
include any member of the class of fluorinated organic chemicals containing at least one 
fully fluorinated carbon atom.

SF 3669 PFAS prohibition in juvenile products (forever chemicals}

A bill prohibiting PFAS in products designed for use by infants and children under 
12 years of age; proposing a new Statute. Examples of these products include but are not limited to a baby or toddler foam pillow; bassinet; bedside sleeper; booster seat; changing pad; child restraint system for use in motor vehicles and aircraft; co-sleeper; crib mattress; highchair; highchair pad; infant bouncer; infant carrier; infant seat; infant sleep positioner; infant swing; infant travel bed; infant walker; nap cot; nursing pad; nursing pillow; play mat; playpen; play yard; polyurethane foam mat, pad, or pillow; portable foam nap mat; portable infant sleeper; portable hook-on chair; soft-sided portable crib; stroller; and toddler mattress; and

 

SF2809 Statewide Drinking Water Safety Action Plan
A bill appropriating money from the general fund to the commissioner of health in fiscal year 2023 to develop a statewide drinking water safety action plan to protect and improve the state's drinking water through research, implementation, and outreach.

 It will establish or expand a multiagency sentinel well network to detect changes in 
water quality in the most vulnerable shallow aquifers that provide drinking water to private 
wells This will be done in consultation with the Board of Regents of the University of Minnesota and the commissioners of agriculture, natural resources, and the Pollution Control Agency. It will provide resources for well owners to identify hazards associated with aquifers and 
wells of particular designs and ages. This requires a report, (plan) to be submitted to the chairs and ranking minority members of the house of representatives and senate committees and divisions with jurisdiction over health, agriculture and environment, and natural resources.

SF 839  Requiring the commissioner of the Pollution control agency to adopt rules on whole effluent toxicity (WET) with a statewide consistency requirement for evaluating and applying whole effluent toxicity (WET) as water-quality-based effluent limitations and permit conditions for discharges occurring outside the Lake Superior basin;

 

SF1630  State greenhouse gas reduction goals modification to include terrestrial sequestration; governmental actions consistency with greenhouse gas reduction goals requirement.  This includes   net zero GHG emissions by 2050  and a 45% reduction from 2005 levels by 2035.   Terrestrial sequestration" means the amount of annual statewide greenhouse gas emissions that is removed from the atmosphere by plants and micoorganisms located in Minnesota, excluding on active croplands, and stored in vegetation, biomass, and soils so as to prevent emissions from reaching the atmosphere, as estimated by the commissioner of the Pollution Control Agency.

 

Energy Bills

 

SF2144   Solar for Schools    A bill for the Department of Commerce to establish the “Solar for Schools” program to promote the use of solar energy on school buildings; with new Statutes and public utility requirements. The purpose of the program is to provide grants to stimulate the installation of solar energy systems on or adjacent to school buildings by reducing the cost, and to enable schools to use the solar energy system as a teaching tool that can be integrated into the school's curriculum.

A Solar for Schools program account is to be established in the special revenue fund. Money received from the general fund must be transferred to the commissioner of commerce and credited to the account.

SF4119 Solar Energy Production Incentive Program extension

A bill extending the solar energy production incentive program and establishing an energy storage incentive program, appropriating money; amending existing statutes plus a new statute. Utilities are to operate a program to provide solar energy production incentives for solar energy systems of no more than a total aggregate nameplate capacity of 40 kilowatts alternating current per premise. Owners of a solar energy system installed before June 1, 2018, are eligible to receive a production incentive. 

 

SF4102 Solar photovoltaic array installation costs contingency fund establishment

A bill establishing a contingency fund to pay certain costs associated with installation of a solar photovoltaic array. It amends and adds to existing Statute.

An amount from the renewable development account not to exceed 
$3,000,000 must be withheld to serve as a contingency fund to facilitate the installation of 
a certain solar photovoltaic array within the city of St. Paul.

The commissioner may distribute money from the contingency fund to the owner of the solar array if it has started design or construction, or is constructed and put in service, prior to a corrective action determination made by the Pollution Control Agency. The owner of the solar array may use money to pay for:

(1) storage and transportation costs incurred for equipment removed;

(2) any costs incurred should reinstallation necessitate redesign or new equipment;

(3) lost revenue or any damages incurred under the power purchase agreement from not 
selling energy during the solar array's removal and reinstallation; and

(4) replacement energy costs during the disruption period.

SF3661    Carbon Capture and Sequestration

A bill establishing state policy supporting the deployment of carbon capture and sequestration technologies as a method of reducing greenhouse gas emissions in order to achieve the state greenhouse gas emission-reduction goals; proposing Statutes.

SF3655 A bill modifying energy provisions in state-owned buildings; All new building and major building renovation projects must use renewable energy sources to the extent required to meet the sustainable building 2030 performance standards. Geothermal 
energy efficiency sources may also be considered. amending and repealing Statutes.

TIMELINE OF THE UPCOMING HEARINGS ON THE CITY BUDGET:

 

TIMELINE OF THE UPCOMING HEARINGS ON THE CITY BUDGET: 

* The Budget Committee will take up their input on the Mayor’s Budget Sept 12^th at 1:30 PM. The finance team will provide a high-level overview of the recommended budget.

* This will be followed by Department hearings starting the next day through the end of October (listen for when the sustainability department gets its hearing?)  

* The first public hearing on the budget will taken up by the budget committee on Nov 10^th at 10 AM

* The Second Public hearing will be in front of the whole council on Nov 15 at 6 05 PM. For bringing forth any new ideas, we will want to make use of the Nov 15th public hearing so that the council could have time to make some substantial changes.  

* The Budget Markup hearing, where the council will make changes to the budget (show up to let them know we are watching) will be on Dec 1 at 10 AM and will continue on the next day Dec 2^nd at 10 AM.

* Tuesday Dec 6^th at 6:05 PM will be the third and final public hearing followed by a formal vote by the council that same evening. This is the required truth in taxation hearing. The December 6th Public Hearing is the opportunity to respond to the results of the budget markup hearings, but the council will usually have limited options for making any substantial changes at the final hearing.