BETC backers plot future

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Grott

Saving Oregon's Business Energy Tax Credit program from axe-wielding legislators isn't going to be easy, but it's also not impossible.

That’s the message from a coalition of clean energy groups and industrial manufacturers who have joined forces to save the popular, yet vilified state incentive program.

"It's not hopeless to get an initiative and funding through the Legislature when there are so many voices coming through," said Robert Grott, executive director of the Portland-based Northwest Environmental Business Council.

The coalition, under the leadership of Seattle-based climate policy group Climate Solutions, held what amounted to a troop-rallying event in Portland on Tuesday, launching a campaign designed to make lawmakers realize the importance of the tax credits to one of the state’s few job-creating industries.

The program offers tax breaks for investment in renewable energy.

Yet the event at David Evans and Associates in the South Waterfront carried a sense of foreboding. The task is an uphill battle and losing it could have devastating consequences.

“Without the BETC or an equivalent funding mechanism,” Grott said, “we are dead in the water.”

The BETC, as it’s called, is widely considered the primary reason Oregon has become one of the nation’s leaders in clean energy.

According to a state Department of Energy study, the program cost the state $244 million during 2007 and the first 10 months of 2008. But it generated an economic impact of $576 million, created 1,700 jobs worth $42 million in wages, and delivered $22 million in new state and local tax revenue, Grott said. [Though comprehensive jobs numbers are difficult to come by.]

Companies across the spectrum have received the credits, including large firms such as SolarWorld and Portland General Electric Co. and smaller ones like West Linn Paper Co.

But the program also has a tarnished image after critics pointed out millions of the dollars allocated for it went to companies with little or no operations in Oregon.

That makes the program vulnerable to cuts by lawmakers who return to Salem next month facing a $3.5 billion budget shortfall.

Backers also face a new political reality. Democratic supporters, who held super-majorities in both chambers last session, will now share power with Republicans in the House and maintain a slim margin in the Senate.

Faced with a shortfall last year, the Legislature cut into the BETC program, saying it was set to cost $167 million in lost revenue in the biennium that ends next year, a significant increase over initial expectations.

Lawmakers passed a bill designed to reduce the impact on the budget by $55 million this year and $98 million in the next biennium. The legislation capped credits at $300 million for renewable energy projects and $200 million for manufacturing projects, while gradually phasing out tax credits for large wind energy developments.

“Talk to your average legislator and you’ll hear how we spent way more than we should have with the BETC,” said Jeff Bissonnette of the Oregon Citizens Utility Board. “What we have to realize when you’re looking at Oregon’s budget picture, is BETC is not in the budget.”

The task at hand for the coalition goes something like this: Rebuild the BETC brand and convince lawmakers that it’s a necessary tool for job growth.

The goal, Grott said, is to ensure lawmakers preserve all three elements of the tax credit program, focusing on renewable energy generation, manufacturing and energy efficiency projects.

The coalition also wants an extension of elements of the BETC designed to expire in 2012.

Grott said the coalition will push for modifying the state’s Energy Loan Program to make it a more flexible tool for financing projects.

To address the brand-building efforts, the coalition handed out a story-telling template designed to help companies describe how the BETC has helped grow or launch their businesses.

Erin Greeson, communications manager with Portland-based Renewable Northwest Project, offered help in schooling stakeholders on reaching out to the media.

What the coalition lacks is hard data.

An Oregon Department of Energy study of the program is expected to be underway soon, but the results won’t be available until mid-March, well into the thick of the session.

The coalition also wants to highlight how the BETC stretches beyond most people’s perception of it as a tool for wind farm developers and solar panel-makers.

One example is ClearEdge Power, a fast-growing hydrogen fuel cell manufacturer in Hillsboro.

Mike Upp, the company’s vice president of marketing, said ClearEdge received nearly $6 million in credits over four years for research and development initiatives.

It has since grown from a work force of 33 in January 2009 to one of more than 200 people.

So far it has only marketed its $56,000 power-generating units in California, where energy costs and government incentives are high. Upp said the company hopes to make Oregon one of its next markets, but the state needs to maintain the BETC program for that to happen.

Despite the grim political picture, some legislators believe the BETC, or some form of energy incentive, will escape the session intact.

“I think it’s safe to say that the vast majority, if not all legislators, are interested in ways we can accelerate economic recovery and find ways to find jobs,” said Rep. Tobias Read, a Beaverton Democrat. “Components of the BETC can contribute.”

Read, however, said lawmakers will also likely consider alternatives to tax credits, such as grants, and whether the program’s pass-through mechanism — which allows companies to sell the tax credits to third-parties for cash — should continue.

“The incentives, I think, are not going to go away,” Read said. “We’re committed to making Oregon a hub in this clean energy economy.”

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