Could a federal-state partnership on clean energy projects help create new jobs? Could federal regulations slow the progress states have made on clean energy? During today's OnPoint, Lewis Milford, founder and president of the Clean Energy States Alliance, a nonprofit coalition of the nation's leading state clean energy funds and programs, makes the case for creating a partnership between federal and state governments to more efficiently distribute funds for stimulus projects. Milford also explains how such a partnership could be applied to cap-and-trade and renewable portfolio standard legislation.
Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. With us today is Lewis Milford, the founder and president of the Clean Energy States Alliance, a nonprofit coalition of the nation's leading state clean energy funds and programs. Lewis, thanks for being on the show.
Lewis Milford: Hi, thank you.
Monica Trauzzi: Lew, an interesting time for an organization like yours with all of the talk about a clean energy stimulus and funding green projects.
Lewis Milford: Yes.
Monica Trauzzi: And your group is pushing for a federal/state partnership in the stimulus. So what role should states be playing moving forward?
Lewis Milford: Well, the key is that the states, really for the last five or 10 years, have served as the really deployment arm of the government. And I mean the states around the United States have made significant investments, probably about a billion and a half dollars in clean energy projects all around the United States. Virtually every solar, wind, biomass project is really funded in one way or another by these states. So we now have the states as the deployment infrastructure, if you want to call it that, for clean energy projects. And our view is that we have, in place, the mechanism the implementing mechanism for what could be in a stimulus package for clean energy investment.
Monica Trauzzi: Isn't it a problem though that all the different states are doing different things and investing in different ways? Don't we need sort of a national, cohesive approach to addressing energy issues?
Lewis Milford: I think, when it comes to clean energy projects, in fact, we really do want diversity. We want the level of experimentation that's occurred out there in the country. You know, California has very different resources from Massachusetts or Wisconsin or New Jersey. So this is really, in the language of the Obama administration, a really bottom-up situation where each state is looking at its own strengths, building its own markets and also looking at the economic development opportunities that exist in its own state and looking at it very differently. So I think we want, I think the strength comes from that diversity. But at the same time most of the states are doing very similar things. I mean they are investing in solar projects, they're supporting wind projects, they're doing a fair amount of biomass, and a small amount of hydro. So there's a lot of similarities, but at the same time there's the diversity, which I think is its strength.
Monica Trauzzi: So we're talking about taking money from the stimulus and dividing it amongst the states. Is it an even division? I mean does someone get more money?
Lewis Milford: Well, we have kind of a couple of ideas about this, think of existing states and then also there are probably half the states in the country that don't now have clean energy funds. And so what we're saying is that take these states that now exists that have funds, about 20, 23, if you look at those collectively, their revenues are in the neighborhood of about $400 to $450,000,000 a year. So what we would say is that let's have a federal matching program, let's say a 2:1 matching program. And you could pick any number; it depends on how much money is available. That would then double in effect the state investment dollars that are available for those projects. So you could double it, you could triple it, but the idea is to match that money which then the state's in turn can leverage their dollars to get money out the door. The key here is that we have this infrastructure in place and they have a backlog. Most of these states have a backlog of projects. So if there were additional federal dollars that were available in this area they could deploy these dollars, get projects in the ground, and create jobs.
Monica Trauzzi: So, is there a concern that federal action could slow progress that the states have already made?
Lewis Milford: Well, I think if it's cleanly done, that is that if it's a fairly simple matching funding formula, where federal dollars make their way fairly quickly to this existing infrastructure, that's the best way to go. I think the thing to do, again, if the purpose of the stimulus is to quickly get in the marketplace, quickly create jobs, get metal in the ground, we don't want to burden it too much with a lot of new federal requirements. I think the idea is states know how to do this. States have been doing this for five or 10 years. So they have the expertise, they have the sophistication, and, again, they have a backlog of projects that really need to be funded.
Monica Trauzzi: You mentioned California, which states, which other states are leading the way in promoting clean energy further?
Lewis Milford: It's a very interesting mix. California, obviously has done a tremendous amount of work over the years, but you also have states like Massachusetts, Connecticut, New Jersey, Pennsylvania, Wisconsin, a lot of states in the upper Midwest, Oregon, Florida is actually considering developing a fund. Alaska has just created a fund. So each one of them, in their own way, are looking at the resources that they can best tap, and are also experimenting in different ways with it . And I think what's happened is that the character of what they do has changed. You know, clean energy five or 10 years ago, probably 10 years ago was considered kind of an environmental program. And for a governor it might have been a third or fourth-ranked interest. Now, for many, it's a very, very high level economic development strategy. You have governors like Corzine who are looking at clean energy as one of the real growth potentials. So even in this economic downturn these states like Jersey and New York, Paterson for example, Governor Paterson just recently had decided to not, either keep that funding at a level or even increase it because they see clean energy as one of the real growth opportunities moving forward.
Monica Trauzzi: What's your sense of what the level of understanding is on Capitol Hill about this federal/state partnership or just having federal regulations? I mean the people that you're talking to, do they understand?
Lewis Milford: I think there's an education process that needs to go on. I think the case is that states have been operating, oddly enough, a little bit under the radar screen I'd say in the last five or 10 years. I think people tend to think some how that these projects have appeared magically and that's not the case. I mean it's the case because states have spent a significant amount of money putting dollars on the ground and then leveraging private capital to make those projects. So I think actually there's a fair amount of education that has to happen on the Hill. I don't think there is a clear recognition that states have a clean energy infrastructure in the same way that they have had a bridge and road and conventional infrastructure process. But I think that's the education that needs to happen. They need to understand that there is this infrastructure in place, the vehicles are there, the implementing pieces are there. That's something that probably needs to be understood much, much better.
Monica Trauzzi: Are you going to be able to do all this educating in the next couple of weeks?
Lewis Milford: We're going to hope so. We'll see. I mean a number of the states are, we're all here now meeting actually in these few days. And they are all fanning out to meet with many of their congressional delegation to talk about this. So I think they're interested, obviously, in educating their delegations about what they do. And I think we need to do that. We need to do that for the transition team, we need to do that for Congress, we need to do it on the Hill to get a very clear understanding that there is this capacity that's out there right now.
Monica Trauzzi: And this is relevant beyond the stimulus as well when we talk about a federal program for climate change, a renewable portfolio standard. So, specifically, how should states play a role in those types of legislation?
Lewis Milford: Absolutely, I mean let's assume there might be stimulus dollars that would match state monies. I think the beauty of that is that you begin to create that kind of partnership and an infrastructure that then could be used as a prototype, let's say for future auction allowance funding from a cap-and-trade bill that needs to go to the states. I mean after all, at the end of the day, this is a technology play. This is all about turning over our current energy system with new technologies, replacing one machine with another and really, at the end of the day, those investment decisions are made at the state level, at the local level. That's where the money really hits the road. We have, obviously, important federal tax policies that drive a lot of these investments, but at the end of the day, for the most part, states are really making these investment decisions. And if we can create the infrastructure to get the right dollars to match the states, that's how we're going to turn this over much more quickly.
Monica Trauzzi: All right, we'll end it right there on that note. Thanks for coming on the show.
Lewis Milford: Great, thanks for having me.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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