When Amy Hargroves made the rounds in Congress last fall to lobby for an extension of the wind production tax credit, she was often greeted with confusion: Why was she here talking about wind power?
That’s because Hargroves wasn’t fighting for the credit as a representative of a turbine manufacturer like Vestas or an interest group like the American Wind Energy Association (AWEA). Instead, she was representing Sprint Nextel, a telecommunications giant with no direct ties to the wind game.
Sprint is among dozens of seemingly unrelated corporations, including Starbucks, Levi Strauss and New Belgium Brewing, who lobbied to save the wind tax credit. It’s hard to gauge how much effect they had on lawmakers’ last-minute decision to give the tax credit a one-year reprieve by putting it in the fiscal cliff tax package. But their involvement shows that the business community has identified a need for renewables and could become an important lobbying force in promoting clean energy.
“This signals a change in the coalition structure,” said Clyde Wilcox, a professor in the government department at Georgetown University. “In the past, it would be green energy companies or environmental groups that have either a business interest or a public interest in these issues. But people look up when a new series of players lines up.”
Some companies, like Sprint, lobbied for the wind tax credit on their own. Others joined Business for Innovative Climate and Energy Policy (BICEP), which was founded in 2008 by the green investment group Ceres to push for energy legislation. Its 23 members include clothing retailers (Gap and Eileen Fisher), tech companies (eBay and CA Technologies) and the Portland Trail Blazers basketball team.
As more large corporations set internal goals to reduce their carbon footprints, they have a vested interest in keeping renewable energies cheap and available. Some are also looking to the future and are concerned that climate change could affect their bottom lines.
Starbucks for instance, has pegged its environmental goals not just to reducing its own footprint, but to “help ensure the supply of high-quality coffee that our customers expect from us into the future.”
BICEP director Anne Kelly, who is also a registered lobbyist, said her organization encourages companies that are already committed to reducing their carbon footprints to step forward and join the broader political discussion on climate and energy issues.
“Our focus is not to simply have the decisions being made by those in Washington,” Kelly said. “We all have a stake in the climate and energy crisis. These companies see it in their supply chains, in the energy they buy, so they should be standing at the table.”
Broader Issues Important
BICEP members have weighed in on a variety of issues, from the 2009 cap-and-trade bill to state-level renewable portfolio standards that would require a certain percentage of a state’s power to come from clean sources. After Hurricane Sandy swamped the East Coast, Kelly said, companies also expressed interest in promoting adaptation and resiliency policies, because they saw that extreme weather could damage their factories or customer base.
In September, 19 corporations signed a letter BICEP sent to the party leaders in both chambers supporting the wind production tax credit, or PTC. Several companies that signed aren’t BICEP members, including Sprint and Johnson & Johnson.
“As Congress investigates ways to spur business growth, we urge you to ensure an extension of the PTC,” the letter said. “Failure to extend the PTC for wind would tax our companies and thousands of others like us that purchase significant amounts of renewable energy and hurt our bottom lines at a time when the economy is struggling to recover.”
Fort Collins, Colo.-based New Belgium Brewing, which signed the letter, boasts on its sustainability blog that it was the first American company to get all its energy from wind power. Keeping wind energy popular—and cheaper—helps the brewery keep its costs low and, the blog says, helps add wind to the state’s energy mix.
The American Wind Energy Association has warned that letting the credit lapse would mean a steep drop in new wind projects. When it was allowed to expire in the past, new installations dropped between 73 and 93 percent. The credit is valued at 2.2 cents per kilowatt-hour for electricity produced from utility-scale turbines. Since its creation in 1992, it has been renewed five times.
With the one-year renewal in hand, AWEA is now pressing Congress for a long-term deal: A six-year extension that gradually phases out the credit.
Hargroves said Sprint aims to get 10 percent of its power from renewables by 2017 and might have trouble meeting that goal if the tax credit expired and fewer producers invested in wind energy. Sprint has already seen the pitfalls of losing a wind contract. When its five-year, clean energy purchasing arrangement with Kansas City Power & Light ended, Sprint’s share of wind power dropped from 2.5 percent to just .5 percent, forcing the company to make up the difference by buying renewable energy credits.
Some companies now see the wind tax credit as a small piece in a larger clean energy picture.
Google, for example, has lobbied for a variety of energy programs, and last week announced a $2.65 million grant to the Energy Foundation to promote more smart grid technology.
The failure of the American Clean Energy and Security Act, better known as the Waxman-Markey climate bill, in 2009 was a bitter disappointment to BICEP members and other companies that supported the bill.
Apple and Nike resigned from the U.S. Chamber of Commerce, which opposes cap and trade, in order to support the legislation.
With no other grand-scale climate legislation on the horizon, Kelly said BICEP’s members and other companies are focusing on smaller initiatives, like the wind tax credit, that might be easier to pass. If those victories can be achieved, she said larger goals could be set.
“We’re already starting to see some consensus around needing a price on carbon,” she said. “We know it’s politically volatile, but our members are saying we need to tax things that we don’t want.”
Not the Usual Suspects
The corporate lobbying effort has been a boon for the renewable energy industry. Having big business backing the wind tax credit has brought more credence—and heft—to the fight by taking it out of the realm of non-profits and wind companies.
“We’re getting such broad bipartisan support because people see this as an American industry,” said Ellen Carey, spokeswoman for the American Wind Energy Association. “I think Americans and businesses see the potential here and understand the benefits of that potential in jobs … and low-cost energy.”
AWEA has made that case countless times before, to the public and on the Hill. But having large businesses with deep pockets and hundreds of employees send that message draws a different kind of attention.
“Usually what happens on Capitol Hill is like that quote from Casablanca: ‘Round up the usual suspects,'” said Georgetown’s Wilcox. “You’ll get Sierra Club and the [Natural Resources Defense Council] and groups like that on one side, and then on the other side the oil companies and some of the ideological Republicans.
“But then here come these political elites or corporate leaders who say this is an important issue for them. People stand back when there are more than just the usual suspects doing it.”
Wilcox pointed to the gay marriage movement as an example of how corporations have challenged the lobbying status quo. Google launched a “Legalize Love” campaign last summer to fight anti-homosexuality laws around the world, including anti-gay marriage legislation in California. Other companies have also spoken out in support of gay marriage.
The participation of outside companies also means more money for wind tax lobbying.
According to data from the Center for Responsive Politics, the American Wind Energy Association spent $1.5 million on lobbying in 2011. The American Petroleum Institute, in comparison, spent just over $8.6 million lobbying for its members’ interests and a single oil company, Exxon Mobil, spent $12.7 million.
The wind lobby got a boost from Starbucks, which spent $580,000 on lobbying in 2011, with environmental issues—including clean energy promotion—among the company’s top five issues.
Sprint spent almost $4 million, with energy ranked as its second-most lobbied issue. That included meetings with lawmakers to discuss the wind tax credit, improving the use of hydrogen fuel cells for backup power and other general clean energy issues.
Sprint doesn’t pretend that its effort is entirely altruistic.
“We’re a company. We’re selfish,” Hargroves said. “For renewable energy, we came up against a barrier in purchasing more wind and right now the PTC will help us get over that barrier. When other barriers come up, we’ll deal with them.”
Hargroves expects it will become more common for businesses to coalesce around social issues, an idea supported by a recent article in the Harvard Business Review. It identified the trend of “creating shared value,” where companies look past short-term profits and focus on improving society. That means not only setting sustainability or charitable goals, but “creating economic value in a way that also creates value for society by addressing its needs and challenges,” wrote Harvard professor Michael Porter and Mark Kramer, founder of the consulting firm FSG.
“Businesses acting as businesses, not as charitable donors, are the most powerful force for addressing the pressing issues we face,” Porter and Kramer said. “The moment for a new conception of capitalism is now; society’s needs are large and growing, while customers, employees, and a new generation of young people are asking business to step up.”