Updates from SMI
SMI’s Chalk, Davis, and Ronneberg Were Key Players in Execution of Billions in Obama Recovery Act Energy Funding
SMI Sees Similar Opportunity Under Biden in 2021
Prior to joining SMI, Vice Presidents Steve Chalk, Pat Davis, and Dr. Drew Ronneberg held positions at the U.S. Department of Energy (DOE) and have over 80 years of combined experience managing federal programs. During their time in federal government, they were responsible for executing billions of dollars of clean energy funds.
At the DOE, Mr. Chalk led two Presidential transitions for the Office of Energy Efficiency and Renewable Energy. He was Acting Assistant Secretary for the Bush to Obama Administration and for the Obama to Trump Administration. Mr. Davis served as Director of the Vehicle Technologies Office, where he led DOE’s research and development in electric vehicle drivetrains, advanced batteries, and advanced combustion and fuels, among other priorities. Dr. Ronneberg, as Supervisor for Engines, Fuel, and Deployment in the Vehicles Technologies Office, held responsibilities that included overseeing millions in annual Research, Development, and Deployment activities as well as forming the SuperTruck and Laboratory Recovery Act programs.
Notably, during their time at the DOE and early on in the Obama Administration, Congress passed the American Recovery and Reinvestment Act of 2009 (ARRA) – which included the largest single investment in clean energy in U.S. history. The Office of Energy Efficiency and Renewable Energy made over $17 billion in grants, including investments in battery manufacturing, combined heat and power, hydrogen and fuel cells, solar, wind, geothermal, low income weatherization and funding to the states for energy efficiency.
Under their purview at DOE, Mr. Chalk, Mr. Davis, and Dr. Ronneberg also became key players in establishing and executing tax incentive programs, such as the $2.3 billion Manufacturing Tax Credit program (IRS Section 48C) which helped offset industry’s capital investment for new manufacturing of clean energy technologies. They also helped establish the Cash-In-Lieu of Tax Credits program (ARRA Section 1603), which helped stimulate over $90 billion in clean energy projects – resulting in over 30GW of clean energy generation.
Now, as part of SMI’s Energy Practice, these experts see similar opportunities for critical climate and energy funding in a prospective Biden stimulus package.
According to Chalk, “The Recovery Act federal grants and tax incentive programs helped unlock private capital in low carbon, clean energy technologies. The DOE Recovery Act investments catalyzed the launch of the energy transformation we’ve seen over the last decade and a new stimulus package under President-elect Biden could incentivize similar industry investments towards our climate goals.”
Davis agrees. “During the Recovery Act, I led approximately $3 billion in vehicle energy storage and electric drive development and manufacturing projects,” he says. “Given the need to address carbon mitigation, the burgeoning plans by OEMs for electric drive vehicles and the need for supporting manufacturing value chains, I expect the Biden administration’s stimulus efforts to support this industry at a level well above what was done in the Recovery Act.”
SMI’s Energy Practice is uniquely positioned to help energy clients navigate a future stimulus.
Says Ronneberg, “The team’s extensive experience at the DOE, including reviewing and selecting hundreds of federal awards, will give SMI clients a distinct advantage in proposing successful R&D or tax credit projects to anticipated stimulus funding under a Biden administration.”
For more information on our Energy Practice, you can visit our website or reach out to individual team members by email or phone.
SMI’s Jeff Leahey Moderates Virtual Event for the National Energy Resources Organization (NERO)
by: Aarzu Maknojia
On November 17, SMI Vice President Jeff Leahey moderated a discussion hosted by the National Energy Resources Organization (NERO). This virtual event featured speakers from the House Committee on Ways and Means and the Senate Finance Committee and discussed tax policy during the congressional lame-duck session.
Staff indicated that negotiators seemed close to a deal on tax items for a COVID-19 relief bill. Notably, there are nearly two dozen tax credit provisions for various industries that are set to expire at the end of the year. They may be renewed but their fate is highly dependent on the passage of a larger COVID-19 relief bill. While there seems to be some agreement on these specific provisions, the same cannot be said for more controversial parts such as defense spending, state and local government funding, etc.
Please reach out to Jeff directly if you have additional questions regarding tax credits, specifically as they relate to energy tax provisions.
Updates from Washington
Final Composition of 117th Congress Still to be Determined
by: Richa Patel
No candidates in either of the U.S. Senate races in Georgia received a majority of the vote in early November, sending the races into a runoff election that will occur January 5, 2021. As the current composition for the 117th U.S. Senate stands at 48 Democrats and 50 Republicans, this election will determine which party takes ultimate control.
GOP Senator David Perdue will continue his run against Democrat Jon Ossoff, joining the special election between GOP Senator Kelly Loeffler and Democrat Raphael Warnock. The November elections that sent these races to runoff also ended with President-elect Joe Biden carrying the state, the first time a Democratic presidential candidate has won the state since 1992.
On the House side, Democrats, who were expected to gain seats in the November election, lost seats, narrowing their majority. The current composition for the 117th U.S. House of Representatives stands at 222 Democrats and 205 Republicans – there are still 8 seats left to be reported. These seats are IA-2, CA-21, CA-25, NY-2, NY-1, NY-11, NY-22, and NY-24. So far, Republicans have successfully flipped 11 seats; Democrats have flipped 3.
These results are quite different than what polling anticipated would be a much larger blue victory. Georgia Senate campaigns are still at full speed as the early January runoff election nears.
Senate Releases All Twelve Appropriations Bills
by: Aarzu Maknojia
On November 10, the Senate Committee on Appropriations released all twelve of its FY2021 funding bills. The top-level numbers are as follows:
-Agriculture, Rural Development, Food and Drug Administration: $23.330 billion
-Commerce, Justice, Science: $71.094 billion
-Defense: $696.0 billion
-Energy and Water Development: $51.752 billion
-Financial Services and General Government: $24.105 billion
-Homeland Security: $69.8 billion
-Interior and the Environment: $38.219 billion
-Labor, HHS, and Education: $184.472 billion
-Legislative Branch: $3.636 billion
-Military Construction, Veterans Affairs: $113.1 billion
-State and Foreign Operations: $55.2 billion
-Transportation, Housing and Urban Development: $74.838 billion
The next step will be for the House and Senate to reconcile the differences in their versions of the bills before sending them to President Trump’s desk for his signature or veto. The current continuing resolution (maintaining FY2020 funding levels) expires on December 11. It is likely that Congress will either pass its conferenced bills or another CR prior to the deadline to avert a government shutdown. Regardless of whether the bills pass prior to December 11, it is very likely they will pass prior to inauguration on January 20.
Companies Report COVID-19 Vaccine Effectiveness
by: Richa Patel
Three major vaccine developers have now announced promising results to their vaccine trials.
Pfizer and Moderna earlier this month announced their vaccines were about 95 percent effective. AstraZeneca has now announced that their vaccine was found to be 70.4 percent effective, lending to the suggestion that we could have at least three viable working vaccines for the COVID-19 pandemic.
SMI’s Dr. Travis Taylor, a virologist, remarks that, “the news of not one, but two highly efficacious vaccines is amazing. While there will be some distribution hurdles to overcome, those in the highest risk groups will receive the vaccine in late December.” He continues that he would “happily take either of these vaccines.”
The vaccines each come with different expected storage requirements. Pfizer’s vaccine requires ultra-cold temperatures for longer than 5 days; Moderna’s may be kept in a conventional refrigerator for up to a month; and AstraZeneca’s is expected to have relatively simple requirements, although details have not yet been provided.
Once vaccines are authorized by the FDA, doses will be allocated to states and administered according to priority groups and for free to Americans. Understanding when this may occur – and how the storage, travel, and handling requirements will be managed – is a more complicated question.
Updates on Biden’s Administration Announcements
by: Richa Patel
Biden continues to roll out announcements for who will make up his team of advisors, senior staff, and Cabinet members when he takes the helm of Presidency in 2021.
Earlier this month, he put out the list of members of agency review teams, responsible for understanding and ensuring a smooth transition for each federal agency.
He’s followed that announcement with many others, including the following:
-Chief of Staff: Ron Klain
-Secretary of State: Anthony Blinken
-Secretary of Homeland Security: Alejandro Mayorkas
-Secretary of the Treasury: Janet Yellen
-National Security Council Climate Envoy: John Kerry
-National Security Advisor: Jake Sullivan
-Director of National Intelligence: Avril Haines
-UN Ambassador: Linda Thomas-Greenfield
What to Expect During the Lame-Duck
by: Aarzu Maknojia
The lame-duck period is the time between the November elections and the January inauguration. It applies to both Congress and the President and refers to the fact that some of the people that return to Washington after the election may be retiring or have been voted out. Usually, the focus during this time period is transition. However, COVID-19 has changed the status quo this year especially as it relates to a COVID-19 relief bill and the appropriations bills.
On November 20, Senate Majority Leader Mitch McConnell proposed funneling $455 billion of unspent small business lending funds towards a new COVID-19 relief package. This comes after months of negotiations between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin haven’t yielded any results. It is possible that a COVID-19 relief bill might pass before the January inauguration.
Additionally, it is likely that the House and Senate will work to resolve the differences between their versions of the appropriations bills prior to January. This will give the new administration a fresh start and will allow the Republican White House to have an additional year of setting budget priorities.
We will keep you up to date with the details as they unfold.