Business, Labor and Greens Unite Behind Tax Credits to Strengthen US Manufacturing Competitiveness

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Support grows for measure to cut energy costs for American manufacturers, create jobs, and slash greenhouse emissions.

Manufacturers that recycle their waste energy can typically cut energy expenses by 20 percent, making them more competitive while slashing carbon emissions. Companies can then reinvest those savings in hiring more workers and expanding production.

A growing coalition of more than 100 business, labor, and environmental organizations today urged Congress to ensure its final tax package contains an industrial energy efficiency provision that would increase manufacturing competitiveness, create jobs, and reduce pollution.

The Alliance for Industrial Efficiency sent letters to the Senate Finance Committee and the House Ways and Means Committee reiterating its backing for tax credits to promote expanded adoption of combined heat and power and waste energy recovery techniques.

Such a provision can already be found in S. 1639 (sponsored by Senators Jeff Bingaman, D-NM and Olympia Snowe, R-ME), H.R. 4751 (sponsored by Rep. Paul Tonko, D-NY and Dean Heller, R-NV), and in the House Ways and Means Committee's draft energy tax package. If enacted, the bipartisan provision would create and preserve jobs within the industrial sector, including for the manufacture, installation, and operation of combined heat and power and waste energy recovery equipment.

“The industrial sector is a huge consumer of power, yet it’s often overlooked in the quest for energy efficiency,” said Tom Casten, chairman of Recycled Energy Development. “Manufacturers that recycle their waste energy can typically cut energy expenses by 20 percent, making them more competitive while slashing carbon emissions. Companies can then reinvest those savings in hiring more workers and expanding production.”

According to the Oak Ridge National Laboratory, combined heat and power could provide 20 percent of U.S. generating capacity by 2030 with proven technology, create nearly one million jobs, and reduce CO2 emissions by more than 800 million tons per year. Combined heat and power generation improves energy efficiency and typically costs less than conventional new generation.

“By passing industrial energy efficiency incentives now, Congress can put our men and women back to work rebuilding America." said Michael J. Sullivan, president of Sheet Metal Workers Internationa l Association (SMWIA), and chairman of Pharmaceutical Industry Labor-Management Association (PIL-MA), the latter of which joined the Alliance just days ago. "This legislation will help us revitalize the manufacturing sector and begin to take jobs back from overseas."

In addition to being good for business, the legislation will help America establish a new clean energy policy, even without a comprehensive climate bill.

"Improving energy efficiency in our factories should be a cornerstone of a larger energy and climate policy that cuts greenhouse emissions, reduces dependence on fossil fuels and makes America more competitive,” said Phyllis Cuttino, director of The Pew Environment Group’s Climate and Energy Program.

Recycled energy, which captures waste energy from industrial facilities, now receives no tax benefits. Combined heat and power, a highly efficient process that generates both electricity and heat on site (also known as cogeneration or CHP), currently obtains only a 10 percent investment tax credit for the first 15 megawatts of a project limited to 50 megawatts in size. The legislative proposals in the House and Senate would encourage more large-scale projects by removing the cap, applying the tax credit to a project’s first 25 megawatts, and adding a 30 percent tax credit for recycled energy and combined heat and power projects with efficiencies above 70 percent. For comparison, the average U.S. power plant is only 33 percent efficient.

Signers of the Alliance for Industrial Efficiency’s letter include:

National Businesses and Power Providers

*ArcelorMittal USA
*Basin Electric
Capstone Turbines Corporation
Cummins Power Generation
The Dow Chemical Company
GE Energy
Ingersoll Rand
Libbey Glass Inc.
LS Power
Mosaic Company
Nevada Energy
PPG Industries
Primary Energy
Recycled Energy Development
Saint-Gobain Containers
Solar Turbines
United Technologies Corporation
Veolia Energy North America Holdings

Contractor Groups and Trade Associations

American Chemistry Council
American Forest & Paper Association
Association of State Energy Research & Technology
Transfer Institutions (ASERTTI)
The Association of Union Constructors
Electricity Consumers Resource Council
Glass Manufacturing Industry Council
International District Energy Association
Mechanical Contractors Association of America
*Montana SMACNA
National Association of State Energy Officials (NASEO)
National Council for Advanced Manufacturing
National Electrical Contractors Association
*Pharmaceutical Industry Labor-Management
Sheet Metal and Air Conditioning Contractors’ National
Steel Founders’ Society of America
U.S. Clean Heat and Power Association

Nonprofit/Labor/Environmental Groups

Alliance to Save Energy
Apollo Alliance
Business Council for Sustainable Energy
Center for American Progress Action Fund
*Climate Institute
Energy Future Coalition
Environment America
*Environmental Law and Policy Center
International Brotherhood of Boilermakers
Northeast-Midwest Institute
*Pew Environment Group
Sheet Metal Workers International Association
Sierra Club
*United Steelworkers
World Alliance for Decentralized Energy

State and Local Businesses

ACCO Engineered Systems (California, Washington,
Idaho, Nevada)
ACR Sheet Metal Company
*Alphabet Energy (California)
Avalon Consulting, Inc. (Illinois)
*Barnes and Dodge Inc. (Kansas)
BHP Energy (Ohio)
Butters-Fetting Co., Inc. (Wisconsin)
Calnetix Power Solution, Inc. (Florida)
*Cascade Energy Group (Washington)
Charles P. Blouin Inc. (New Hampshire)
Circle “R” Mechanical, Inc. (Indiana)
Climate Energy (Massachusetts)
DCO Energy (New Jersey)
Dresser-Rand/Aircogen (Massachusetts)
*Dry Coolers Inc. (Michigan)
*Earthwise Energy Technologies (Rhode Island)
E-Finity Distributed Generation (Pennsylvania)
ECR International (New York)
Endurant Energy LLC (Illinois)
*Enercon Engineering Inc. (Illinois)
Energenic LLC (New Jersey)
Energy Solutions Center (Washington, DC)
Ernest D. Menold, Inc (Pennsylvania)
Five Star Electric Motors (Texas)
GEM Inc. (Ohio and Georgia)
*Guardian Industries (Michigan)
*Hyvac Inc. (Florida)
Interstate Power Solutions (Missouri)
KGRA Energy Corporation (Illinois)
Lewis and Lambert Industries, Inc. (Texas)
Matherly Mechanical Contractors, Inc. (Oklahoma)
Melrose Metal Products (California)
Midwest Fabricators, LLC (Oklahoma)
National Heating & Ventilating (New Mexico)
New Loop Energy (Illinois)
Office Power Energy Solutions (New York)
Pumps and Service (New Mexico and Texas)
Reagan Equipment (Florida and Louisiana)
Regatta Solutions Inc. (California)
RHP Mechanical Systems (Nevada)
RSP Systems (New York)
Rudolph Libbe Companies (Ohio and Michigan)
Sheet Metal Engineering, Inc. (Iowa)
*South Jersey Energy Solutions (New Jersey)
*Stromberg Metal Works Inc. (Maryland)
Tal-Mar Custom Metal (Illinois)
Turbine Air Systems (Texas)
Turbosteam (Massachusetts)
Tweet/Garot (Wisconsin)
Unison Solutions (Iowa)
Westside Mechanical Sales (Illinois)
Zeledyne (Michigan, Oklahoma, Tennessee)

*New signatures since the April 12, 2010 letter


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Heather Shadur
Shadur Communications
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