STATES:

Stimulus bill could rescue threatened energy programs

Managers of state renewable energy programs urged Congress yesterday to pour stimulus money into backlogged energy projects, warning that the financial crisis threatens to delay or capsize efforts to address climate change.

Twenty states have programs credited with building 50,000 renewable energy projects in the last decade, using $1.5 billion in public financing, gaming funds and utility surcharges, according to the Clean Energy States Alliance, a nonprofit group that represents state programs.

The programs often use their funding to attract private developers, which contributed an additional $2.5 billion to those projects over that same period, the alliance found.

But the deepening recession is causing lenders and investors to abandon new projects or to hike interest rates, often to the point of making projects uneconomical, several managers of state programs said in an event yesterday meant to capture the attention of Capitol Hill staff as lawmakers work on a sprawling stimulus package.

In Pennsylvania, one developer saw the interest rate double, to 12 percent, for a conventional wind project, according to Rob Sanders, manager of the Philadelphia clean energy program TRF Sustainable Development Fund.

"That project is dead," he said.

Energy programs plundered

State programs are also facing cutbacks as legislatures and governors seek to balance their budgets, sometimes using money from utility surcharges meant for renewable energy. Some programs could close.

"The funding for our office will go away in the next fiscal year," warned Tom Plant, director of the Colorado Governor's Energy Office, which has helped build more than 1,000 megawatts of renewable energy in six years using gaming funds.

Lewis Milford, founder of Clean Energy States Alliance, is recommending that Congress give grants to the 20 states with programs, amounting to at least twice their annual budget. He said the states are best equipped to identify projects able to reduce emissions and create jobs -- a priority for any stimulus package.

"There are projects waiting to happen," Milford told an overflowing audience of Hill staffers and environmental researchers and advocates.

He estimated that the states together spend more than $400 million a year on clean energy. Under his plan, those states would receive an additional $850 million from a new stimulus bill, instantly tripling the investment in non-fossil fuel power.

He also proposed creating clean energy programs in the states that don't have them, saying they could mimic the outlines of existing programs. He believes all 50 states could have programs "very quickly."

States could want $10 billion

Milford is hesitant to ask Congress for a precise dollar amount. But in an interview last week he indicated that it should be in the billions.

"Whether it's $1 billion, $2 billion or $10 billion -- those are the type of questions I think the states really haven't yet grappled with in terms of making a specific proposal," he said.

Program managers say they could quickly create jobs by using stimulus money, or even federal loans, to leverage private investment in scores of projects related to solar, wind, biomass, fuel cells and efficiency initiatives.

"We absolutely need a federal-state partnership to leverage our resources," said Janet Joseph, director of clean energy research at the New York State Energy Research and Development Authority, which has helped develop more than 1,000 megawatts of renewable power and has another 8,000 megawatts waiting for funding.

Fifteen percent of the homes in Oregon are heated and powered by renewable energy as a result of its 6-year-old program, the Energy Trust of Oregon. It could do more, said Peter West, the program's manager.

"We all have an overhang ... of projects," he said of all the states.