At long last

In last week's article, I wrote about the silliness of awarding money from the U.S. Department of the Treasury, but not actually paying it to the recipients until there was a determination about how much of that money needs to be repaid to the Treasury in the form of taxes.

When President Barack Obama made the announcement about the stimulus grant awards last October, there were a lot of promises about energy efficiency, job creation and environmental impact, but those opportunities have been slow to develop pending the resolution of the tax issue. Yesterday, the Treasury and the U.S. Department of Energy (DOE) announced guidance on this issue that should clarify the situation for recipients and result in the distribution of the grant money.

More specifically, the guidance states that "the Internal Revenue Service will not challenge a corporation's treatment of an SGIG made by DOE to the corporation as a nonshareholder contribution to the capital of the corporation under section 118(a) of the Code if the corporation properly reduces the basis of its property under section 362(c)(2) and the regulations thereunder."

There you have it - the 52 words that have kept people, jobs, corporations, regulators and other interested parties in limbo for the past several months. While this is certainly good news for those looking to move forward with their plans, it is inexcusably tardy. Clearly, this issue should have been resolved before the stimulus grants were announced.

The astute reader may recall some of the bold statements in Pres. Obama's original announcement about the Smart Grid Stimulus Grants (SGIG), which can still be found on the DOE's website. Among other things, the announcement stated that the completion of the projects funded by the stimulus grants would:

• Create tens of thousands of jobs
• Empower consumers to save energy and cut utility bills
• Put the country on a path to receive 20 percent or more of our energy from renewable sources by 2020
• Leverage more than $4.7 billion in private investment

In short, the announcement led everyone to believe that the industry would be filled with opportunity and society would benefit from these investments. Consider the unemployment rate, which the Bureau of Labor Statistics recently announced is holding steady at 9.7 percent. In all fairness, that rate is down slightly from October, 2009 when the stimulus grants were announced. But, little of that change can be attributed to smart grid stimulus funds that have not yet left the treasury.

With nearly 10 percent of the workforce still unemployed, it was past time for this issue to be resolved so that investments in the people who will deliver on the promises made during the announcement can move forward. Real people, with real lives, were suffering while the government debated with itself. Several months after Pres. Obama's announcement, the great opportunities associated with the stimulus grants seemed to be in doubt.

The press release that accompanied the clarification addressed the opportunities that can now be pursued. On the issue of jobs, Matt Rogers, senior advisor to the secretary of energy, stated, "As these projects move forward, they will create thousands of new jobs and bring smart grid technologies to communities across the country." And, on the issue of efficiency and environmental impact, Don Tangherlini, treasury assistant secretary for management, stated, "Smart Grid Investment Grants help encourage innovation in the way we power our homes and businesses. By clarifying the tax treatment of Smart Grid Investment Grants, we are ensuring that their full impact is felt in the communities where these investments are being made."

There are many who believed that the federal stimulus funds should never have been awarded in the first place. And there are those who believe that the awards were too small and that the government needs to fund even more. But, I have yet to find anyone who believed that the government should award money and then tie it up in bureaucracy so that it never actually reached the intended recipients. It was time for the DOE to 'fish or cut bait' as they say and resolve the rules and get the money flowing.  And they have now done so.

I enjoy discussing industry issues with you. Please feel free to share your thoughts in the comments section, or reach me directly at bthielbar@energycentral.com