Jay Inslee’s Gubernatorial Campaign Plan to Develop Cleantech
Following is the text from Jay Inslee Approach to Job Creation released by Inslee for Governor Campaign in early February 2012. Read the full plan here.
Chapter 6: Clean Technology
Rising gasoline prices, dependence on fossil fuels, and climate change realities have driven world demand for clean energy technology. As this demand continues to grow, job creation follows.
When it comes to clean energy, Washington State is one of the most innovative places on the planet. According to the Washington State Employment Security Department, Washington’s clean technology economy employs around 61,775 people in our state. During the down economy, Puget Sound’s Prosperity Partnership estimates that the sector would still outperform the rest of the economy.
Jay Inslee has worked for years to help build a clean energy industry in our state. He championed Washington’s Energy Independence Act, which has changed our energy landscape while creating thousands of jobs and generating millions in tax revenue to fund rural schools and first responders. To help create jobs across the state, he championed advanced sustainable bio–‐jet fuels by partnering with the Department of Defense and securing local funding. Jay also co–‐authored a book on clean energy job creation, Apollo’s Fire: Igniting America’s Clean Energy Economy.
Promote Our Energy Independence
Energy is the lifeblood of our state’s economy. Affordable electricity has helped industries grow across our state, and clean energy is attracting new businesses today. Washingtonians spend over $20 billion each year on energy, with a significant amount being purchased from out of state. If we reduce that economic leakage, we can invest our dollars into more job creating energy sources in Washington communities.
Jay Inslee’s proposals will build on the state’s competitive advantage of affordable and clean energy to position Washington State for success in a national, low–‐pollution energy future. By leading the region and the country in clean energy initiatives, Washington will grow local jobs by exporting our technologies and expertise.
Lead the country in development and production of advanced sustainable biofuels
Of the $20 billion that Washington State spends on energy, over $15 billion per year goes to oil and gas companies for transportation fuels. We can lessen that economic hit by seizing the opportunity to create jobs in Washington by growing, processing, refining and deploying advanced biofuels at a commercial scale.
This is an area where industry, environmental leaders, and communities have identified vast need and as much opportunity. It addresses a key strategic challenge for one of our state’s greatest economic sectors, aerospace, and draws on the full range of our capabilities, from high–‐tech companies to workers in forestry and agriculture.
Alaska Airlines, Boeing, Port of Seattle, and Spokane Airport are working with Washington State University and environmental leaders to facilitate the commercialization of locally produced fuels to power the aviation industry. Local companies have already made drop–‐in bio–‐jet fuel to power U.S. military aircraft like the U.S. Navy’s F/A–‐18 Super Hornet and Boeing jets. Homegrown feedstocks can be produced in all corners of the state and include agriculture–‐based crops, wood wastes, solid wastes, and even algae.
We can build on this work and put Washington State on the map as an industry leader in advanced biofuels.
- Create an Advanced Sustainable Biofuels Center of Excellence, led by Washington State University, to partner with private industry, local, state, and federal government. The Center will facilitate research, feedstock growth, sourcing, processing, and the deployment of commercial scale production.
The Biofuels Center of Excellence can help create conditions for industry leadership in producing advanced renewable fuels, including production scale refinery by leading efforts to:
- Coordinate, support, and accelerate proposals for research and technology development.
- Advocate for private, non–‐profit, and federal funds.
- Support production and pilot scale refineries to produce advanced renewable fuels at scale.
- Work with the Department of Defense and local bases in order to maximize opportunities around supplying sustainable fuels for aviation and local job creation.
We can help to create “market pull” to encourage local demand for biofuels that will help create local jobs for farmers, haulers, and manufacturers.
- Partner with the Department of Defense and WSU in a “Fields to Fuels” effort help the department meet its biofuels goals while creating jobs from the farmer growing crops, to the trucker hauling it and the technician refining it into fuel.
- Provide a technology-neutral market mechanism to spur development of local and regional alternative transportation fuels, including advanced sustainable biofuels, electric vehicles, and natural gas.
- Identify and pursue opportunities to increase the use of advanced fuels in state and local operations.
Update our Energy Independence Act and help electrify the transportation sector
The Clean Energy Independence Act has already generated over $7 billion in new, clean energy investment, providing thousands of jobs and helping rural communities build stronger local economies. Still, more can be done to make it work better and continue to create jobs for the entire state. We can aim higher and do better, at lower cost, if local utilities are provided more flexibility to be part of the solution in a way that works best for their communities. We can also leverage our clean, low cost hydropower and wind resources to lead the country in the move toward vehicle electrification while decreasing the $15 billion Washington’s economy loses annually to pay for oil and gas imports.
- Grow and diversify Washington’s clean energy commitment by accelerating the development of hydro efficiencies, safe and sustainable biomass, combined heat and power systems, and electrification of the transportation system. With increased flexibility, the Energy Independence Act can accomplish more and work better for all Washington citizens and utilities, including low-load growth utilities.
- Expand opportunities for communities to achieve clean energy goals while advancing critical local priorities such as clean air, reducing oil dependence, and local economic development.
- Build a clean energy economy to last in Washington by increasing long-term renewable energy goals and better aligning clean energy growth with utilities’ power requirements.
Remove barriers for renewable energy projects
Renewable energy projects have created jobs in every corner of Washington State. Eastern Washington farmers benefit from increased land revenues from wind developments, and port workers in Vancouver move hundreds of turbines per year. In other rural areas, anaerobic digesters convert animal waste into energy. Yet, barriers remain to create a more robust deployment and job creation. As Washington positions itself to lead in the clean energy sector, it is vital to develop clean energy facilities, like wind turbines, solar collectors, combined heat and power generators, district energy projects and next generation alternative energy systems.
- Drive a stakeholder process to address high wind / high water events in a manner that does not require shutting down renewable power generation by considering the deployment of low-cost, innovative solutions such as virtual batteries, scheduled transmission improvements, and power swaps.
- Extend the time frame and increase the limits for Washington’s current production tax credit for renewable energy development.
Foster the growth of Clean Energy/Technology Companies
Clean energy technology is a sector in which Washington State has an opportunity to flourish. With Washington’s rich history in agriculture and natural resources, in conjunction with a legacy of innovation and leadership in information technology, our state is well positioned to create jobs by promoting the development of clean energy businesses. According to the state’s Clean Energy Leadership Plan, with the right policies we could produce 25,000 direct clean energy jobs by 2020.
Align tax incentives to encourage investment in clean technology startups
Many clean technology start–‐up companies have the potential to create a large number of jobs if their technology is proven in the marketplace. Not all will succeed – that’s the price of innovation. Despite the challenge, it is in our state’s best interest to give these technologies a chance by taking steps to improve the tax environment at critical stages of development. The following tax incentives should be enacted in a manner to encourage job creation, while preventing overlap and “double dipping.” Further, each of these tax incentive should be capped, finite, narrow in scope, and subject to review for job creation performance.
- Provide a short-term B&O tax relief for start-up research-based companies with 50 of fewer employees.
- Allow pre-revenue research-based companies to, within limits, accrue and sell R&D tax credits.
- Establish a Job Creation Tax credit, giving a B&O tax credit for small businesses adding workers to their payroll. Credit should be increased with the wages paid, and top out at $4,000 for every job created and the program capped at $8 million.
Facilitate technology commercialization activities at our research institutions and drive investment into local companies
The vast majority of basic research in the United States is done in public research institutions, such as universities and national labs. As our country’s largest public university recipient of federal research dollars, the University of Washington is one of our state’s greatest economic assets, having spun out such companies as EnerG2 and Immunex. These research institutions become engines of economic growth by spinning off job–‐creating companies formed around new inventions.
Our research institutions have made great strides in recent years to step up and improve commercialization efficacy. Finding ways to build upon these improvements can lead to long–‐term and sustained job creation in our state. We also must keep our promises to our R&D investments to grow promising technologies.
Clean energy technology companies face significant financing hurdles to overcome research and development expenses and significant scale up costs. State policies must be aligned to help overcome these challenges, not hinder them.
- Give investor-owned utilities more flexibility to invest in the demonstration and deployment of clean energy technologies while including durable ratepayer protections.
- Enhance commercialization capabilities at our research institutions by giving them flexibility to take equity positions in their spinoff companies and to use funds generated from patent and technology licensing to reinvest in other technologies. This may require a narrow constitutional amendment.
- Identify and remove additional regulatory, statutory, or cultural barriers to commercialization efforts and work with research institutions to remove them.
Job creation through home and building efficiencies
Washington State residents spend over $5 billion each year to heat, cool and light our homes and workplaces. According to the 2009 McKinsey Report, an average of 30% of this energy is wasted through inefficiencies. This results in the waste of millions of dollars of potential job–‐creating capital.
Jay Inslee’s proposals will get Washington working by reinvesting these wasted resources into the building energy efficiency industry while saving consumers money. Energy efficiency is the most cost–‐ effective resource to power our economy and it becomes even more attractive as we look at the air pollution and environmental consequences of many other energy sources. The energy efficiency industry already employs almost 25,000 workers in the state, but our policy is lagging behind other regions in its commitment to creating efficient buildings.
Align utility and customer interests in energy efficiency
Currently, Washington regulations for investor–‐owned utilities create a disincentive for them to fully invest in energy efficiency programs for all their customers. We can unlock these investments by:
- Update UTC policies and ratemaking approaches to better align utility business interests with the interests of their customers. Such changes will enhance energy efficiency services for the customers of the state’s five investor-owned electric and natural gas utilities and ensure consumer and industrial customer protections.
Attract and leverage public- and private- sector capital
Although being cost–‐effective over a period of time, energy efficiency retrofits are often stymied by the upfront cost of efficiency measures. This condition provides an opportunity to attract third–‐party funders to provide financing options to property owners. Public policies can reduce the risk of these investors by providing reliable re–‐payment mechanisms and by enhancing the credit of energy efficiency loan pools.
- Allow homeowners and building owners the option of paying for energy efficiency upgrades over time on their utility bills by requiring regulated energy utilities to provide meter–‐based financing options for customers.
- Allow commercial building owners the option of paying for energy efficiency upgrades over time on their property bills by creating a Property Assessed Clean Energy (PACE) program.
- Establish a bonding program that uses existing revenue streams to invest in state infrastructure and efficiency investments that can spur job creation now and realize environmental benefits sooner. The bonding level must not be set at level that jeopardizes state’s credit rating.
Adopt a hands–‐on approach to recruitment and support for the industry
Our state needs a hands–‐on approach to businesses recruitment, retention, and expansion opportunities. We also need industry sector experts to work directly with the Governor and key industry sectors to achieve policy objectives.
- Create a Clean Energy sector lead, working with the Governor to ensure the State’s ongoing support for the clean energy sectors and its workforce.
- Establish a “one-stop shop” for industry recruitment, to promote Washington’s healthy climate for industry development and assist industry leaders interested in locating in Washington with everything from inventory sourcing to site selection.
- Attract new businesses to the state by personally leading recruiting efforts with clean energy businesses across the country and the globe, urging them to co-locate here in one of the greatest life sciences industry clusters in the world.
