Business

Adam Putnam Energy Bill Prevails

By: Jim Turner | Posted: April 14, 2012 3:55 AM

From left, workers install solar panels on a rooftop, accept delivery of wind turbine towers and feed a biomass power generatos. All three renewable energy sources, solar, wind and biomass are part of a new energy bill set to take effect in Florida July 1, 2013. Credit: Elena Elisseeva - Shutterstock - thestar.com - sciencephoto.com

The state’s first comprehensive energy bill in five years, considered a more “modest” approach than past diversification efforts and approved with overwhelming bipartisan support by the Legislature, will become law without the governor’s signature.

In announcing Friday that he will allow the bill to become law effective July 1, Gov. Rick Scott expressed mixed feelings on the pro-business legislation due to the addition of targeted tax credits that he threatened to later try to repeal if they don’t work as advertised.

“While I support many of the provisions of CS/CS/HB 7117, I am concerned whether the taxpayers of Florida will receive a return on the targeted tax credits in the bill,” Scott wrote in a letter to Secretary of State Ken Detzner.

“I look forward to reviewing the analysis of returns to the taxpayers as a result of these tax credits. In considering this analysis, it is my goal to ensure that any investment on behalf of Florida taxpayers in renewable energy would afford them the kind of return they would expect of their tax dollars. Absent clear documentation that the proposed tax credits have produced a sufficient return or provided significant cost savings for the state’s taxpayers, I will request their repeal.”

Slade O'Brien, director of Americans for Prosperity Florida, which lobbied against the energy bill, admitted the group is disappointed, but expects it won’t take long for Scott to seek the repeal of the tax credit program that could be worth up to $100 million in five years.

“I thought the governor had an opportunity with this particular bill to set an example moving forward that we were going to change the culture of this state and get out of the business of picking winners and losers in the market place,” O’Brien said.

“I’m pleased that he didn’t sign the bill and I’m somewhat pleased by his statement. He clearly heard the argument we were making,” O’Brien added. “I think if you look at history, it (tax credits) doesn’t work, they become very expensive jobs.”

Putnam released a statement after the bill's passage was announced to say the state was taking “a modest step forward toward a smart, long-term energy policy” and that his agency would “implement measures of accountability to analyze the economic impact that results from the bill’s tax credits.”

“The bill offers technology-agnostic tax credits to businesses that demonstrate investment in energy production and create jobs in Florida,” Putnam stated in the release. “Any form of renewable energy is eligible; the market will determine how investments are made. The bill also repeals outdated and counterproductive regulations like the renewable portfolio standard and makes clear that the sale of unblended gasoline is legal.”

Besides the widespread legislative support, the Florida Chamber of Commerce and Associated Industries of Florida backed the package.

While expressing caution about the tax credits, Scott didn’t hold back in his praise of other parts of Putnam’s proposal to diversify the state’s energy portfolio.

“This legislation contains numerous pro-­business reforms intended to encourage the development and expansion of businesses in Florida that produce renewable energy,” Scott wrote Detzner.

“CS/CS/HB 7117 streamlines the permitting process for these companies in Florida and reduces other administrative barriers for new companies to operate and grow. Further, it repeals the state’s renewable portfolio standard mandate, which dictates the appropriate level of investment in renewable energy without the influence of the free market.”

The proposal, which includes up to $100 million in tax incentives for renewable energy investments over five years, includes:
  • A renewable energy technologies sales tax exemption capped at $1 million a year.
  • Reinstatement of the biofuel portion of the renewable energy technologies investment corporate income tax credit up to $10 million per year.
  • Reinstatement of the renewable energy production corporate income tax credit that is equal to 1 cent per kilowatt-hour of energy produced from renewable sources. The energy would be sold with a cap of $5 million in the next fiscal year, $10 million a year through 2017.
An independent study by the Delaware-based Environmental Economics of Cardno ENTRIX projected the law will generate $143.5 million in new tax revenue and create more than 3,000 jobs for Floridians.

“The combination of these incentives is projected to generate an annual average of $28.7 million in new tax revenue over the fiscal years 2012-2016 and support as many as 3,350 new jobs in all sectors of the Florida economy by 2017,” John Urbanchuk, technical director for Environmental Economics, stated in a release.

“Not only does increased investment in the form of new capital expenditures generate new economic activity, this investment increases the size, and presumably the quality, of the capital stock, resulting in additional growth in real output in all sectors of the Florida economy.”

Opponents, including Americans for Prosperity Florida, The Heartland Institute, and comedian Victoria Jackson, have derided the bill as the government picking winners and losers among energy companies and have painted the incentives in the energy bill as equal to the stimulus loan guarantees to the failed California-based solar energy company Solyndra. Those loan guarantees cost taxpayers more than $500 million.

Supporters of the bill have countered that Americans for Prosperity is linked with the billionaire Koch brothers, who are deeply rooted in oil money, and that arguments used against the plan to replace alternative-energy mandates with market-driven incentives are rooted in a lack of good information.

Tom Feeney, president of Associated Industries of Florida, called the comparison between Solyndra and Putnam’s bill “false and misleading.”

In an April 10 letter to Scott in support of the energy bill, Feeney noted the tax credit is patterned after “the federal production tax credit signed by several Republican administrations.”

Feeney’s letter also stated that the bill includes two important provisions for the state. One removes burdensome renewable portfolio standards from state law while extending renewable production credits.

“This tax credit is a tax cut for Florida businesses that invest in alternative energy and produce this energy for sale in the state,” Feeney wrote.

“As an alternative to expensive and burdensome mandates enacted in other states, this approach is a thoughtful, reasonable, ratepayer friendly way to encourage new energy production from the state’s utility and non-utility energy producers. It has the potential to be a real job creator by providing a one penny per kilowatt-hour credit for those companies who produce and sell this energy within the state.”

The bill, mediated in both chambers, is the first comprehensive energy plan to be approved by the Legislature since former Gov. Charlie Crist introduced a plan in 2007 that called for sweeping reforms. Many of Crist’s proposals have since remained dormant or required repeal.

The bill also allows local governments to use discretionary sales tax revenue to assist homeowners who make energy-efficiency improvements.

The legislation streamlines the permitting process for bio-fuel feedstock crops and allows retail dealers to sell unblended gasoline, which is a priority for the boating industry.


Reach Jim Turner at jturner@sunshinestatenews.com or at (772) 215-9889.

Comments (10)

Daniel Mccumllam
1:53AM JUN 15TH 2012
Fine, that is highly input of you. Very pleased through visiting this post and here I've found here. I would like to come back here again and again. Thanks dude. :)
John Lacquey
9:21AM APR 23RD 2012
The goverment needs to stay out of free markets. Mr. Putnam needs less to do not more.
Florida Citizen
10:02AM APR 17TH 2012
Frank, you said it very well.
The Heartland Institute and others against the bill were supported by Big Oil (ExxonMobile to be exact). The Governor let the bill pass as he has given millions in tax breaks and incenticves to businesses in FL in the name of commerce. These jobs are just what the Governor wanted, but didn't have the guts to sighn the bill. Why? Just like a politition, he is looking for favors!

Don't be fooled... Governor Scott knows how to work the system.
Sandra Wiatrowski
2:26PM APR 15TH 2012
Apparently, our Governor took a deferment on this, although the People were decidedly against it. Putnam and Haridopolis believe we are ill-informed dolts, and they are above having to listen to the "minions." Well, I hate to burst their pretty pink bubble, but it is not ONLY the swamp in DC for which we are all gunning. We recognize that for REAL change, and to turn the topsy-turvey weight of government BACK to its rightful power, the People MUST demand that the State reclaim its power from the Nazional government, and that the elected state agents of the People execute the Peoples' will! As far as I am concerned, all elected officials can go back to whence they came, as I am voting them ALL out, for breaking their oath to represent me.
Frank
9:07PM APR 15TH 2012
Yawnnnn . . . .The Nazi (or is it socialist?) rants and 2nd amendment solution references have gotten very worn out and by now have become almost laughable. The "people" are starting to tune out your Tea Party demonizations of everybody and everything, because they no longer believe you have anything to offer. Your on the downhill slide. I'm sorry but you'll be forced by reality to live in a future of alternative green energy sources, climate change adaptation, and national health insurance coverage of some sort. The Tea Party's 15 minutes of infamy are almost up. Ther best you seem able to do is destroy the Republican Party, and by so doing, strengthen the Democratic Party. Reality hurts, doesn't it? Oh, and I know this will devolve into further name-calling, so my mother told me that stick and stones . . . .and so on. . . .
Conservative Voice
9:49AM APR 14TH 2012
Well now we know who is the most powerful man in the state is right? The red head who will be king and the power brokers who will support him. Florida Chamber, Associated Industries, NFIB they are all in place.

Where will be the next power stuggle? Will it be J.D. Alexander and his PolyTech or will it be something simple. Time will tell.
RepublicanConscience
7:40AM APR 14TH 2012
Just another comment: Since this credit is for only "The Rich" (people that own homes), it only serves to reinforce the Democrat lie that the Republicans are the Party of "The Rich." This is an abomination and any Republican that supports it should be targeted in a Primary.
RepublicanConscience
7:28AM APR 14TH 2012
Adam Putnam must go. First of all it is not the state's business to manipulate the market. Secondly, the state should flip a bird at Obama and start drilling. This is a terrible bill and will cost the state far more than the taxpayers could hope to save. Just cut taxes so the people can choose whether they want green technology or perhaps choose to replace the brakes on the family car, buy food, pay the mortgage, etc.

If Rick Scott should veto this bill. Let the legislature take responsibility for this bad bill and the people take names and numbers.
Frank
8:47PM APR 14TH 2012
So, let me get this straight - you blast a 5-year $100 million green energy bill that could help us towards getting off of foreign oil, but you're are mum (or support or ignore) the economic development package that included more than $1 billion for businesses over the next three years. Is this picking and choosing, ignorance, or just plain good old hypocrisy about subsidies?

And while we're at it, I did past research and publications for the American Petroleum Institute on the eastrn Gulf - I do know a little bit about the potential for oil and gas production in the eastern Gulf. Where exactly within the state's territorial Gulf limits do you believe it makes sense to start drilling? Do you have any idea of the actual realities and potentials of drilling in the eastern Gulf, or are you simply parroting some red-herring nonsense that a Republican state legislator might have made in the past to try and pressure the feds to open up leasing offshore?

Palin's "Drill, Baby, Drill" belongs in the disproved political discard pile, along with Separate but Equal, Trickle Down Economics, Trees Pollute, Irag has Weapons of Mass Destruction, Creationism, and Climate Change is a Hoax. The U.S. will not be able to drill it ways to an oil/gas only future (even with coal). It will need most all the tools in the energy toolbox, including nuclear, solar, wind, and the others.
LDouglas
5:30AM APR 15TH 2012
You summed that up very well!

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