[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
 THE CLEAN ENERGY RECOVERY: CREATING JOBS, BUILDING NEW INDUSTRIES AND 
                              SAVING MONEY

=======================================================================

                                HEARING

                               before the
                          SELECT COMMITTEE ON
                          ENERGY INDEPENDENCE
                           AND GLOBAL WARMING
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 10, 2010

                               __________

                           Serial No. 111-14


             Printed for the use of the Select Committee on
                 Energy Independence and Global Warming

                        globalwarming.house.gov



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                SELECT COMMITTEE ON ENERGY INDEPENDENCE
                           AND GLOBAL WARMING

               EDWARD J. MARKEY, Massachusetts, Chairman
EARL BLUMENAUER, Oregon              F. JAMES SENSENBRENNER, Jr., 
JAY INSLEE, Washington                   Wisconsin, Ranking Member
JOHN B. LARSON, Connecticut          JOHN B. SHADEGG, Arizona
HILDA L. SOLIS, California           GREG WALDEN, Oregon
STEPHANIE HERSETH SANDLIN,           CANDICE S. MILLER, Michigan
  South Dakota                       JOHN SULLIVAN, Oklahoma
EMANUEL CLEAVER, Missouri            MARSHA BLACKBURN, Tennessee
JOHN J. HALL, New York
JERRY McNERNEY, California
                                 ------                                

                           Professional Staff

                      Michael Goo, Staff Director
                       Aliya Brodsky, Chief Clerk
                 Bart Forsyth, Minority Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Edward J. Markey, a Representative in Congress from the 
  Commonwealth of Massachusetts, opening statement...............     1
    Prepared Statement...........................................     3
Hon. F. James Sensenbrenner, Jr., a Representative in Congress 
  from the State of Wisconsin, opening statement.................     5
Hon. Stephanie Herseth Sandlin, a Representative in Congress from 
  the State of South Dakota, opening statement...................     6
Hon. Emanuel Cleaver II, a Representative in Congress from the 
  State of Missouri, opening statement...........................     7
Hon. Jackie Speier, a Representative in Congress from the State 
  of California, opening statement...............................     8
Hon. Jay Inslee, a Representative in Congress from the State of 
  Washington, opening statement..................................     9

                               Witnesses

Mary Ann Wright, Vice President and Managing Director--Business 
  Accelerator Project, Power Solutions Division, Johnson 
  Controls, Inc..................................................    10
    Prepared Statement...........................................    12
Paul Gaynor, Chief Executive Officer, First Wind Holding LLC.....    21
    Prepared Statement...........................................    23
    Answers to submitted questions...............................    72
Lisa Patt-McDaniel, Director of the Ohio Department of 
  Development, State of Ohio.....................................    30
    Prepared Statement...........................................    32
    Answers to submitted questions...............................    74
J. Bryan Ashley, Chief Marketing Officer, Suniva, Inc............    39
    Prepared Statement...........................................    42
    Answers to submitted questions...............................    78
Brian M. Johnson, Federal Affairs Manager, Americans for Tax 
  Reform.........................................................    47
    Prepared Statement...........................................    49


 THE CLEAN ENERGY RECOVERY: CREATING JOBS, BUILDING NEW INDUSTRIES AND 
                              SAVING MONEY

                              ----------                              


                       WEDNESDAY, MARCH 10, 2010

                  House of Representatives,
            Select Committee on Energy Independence
                                        and Global Warming,
                                                    Washington, DC.
    The committee met, pursuant to call, at 9:35 a.m., in Room 
2141, Rayburn House Office Building, Hon. Edward J. Markey 
(chairman of the committee) presiding.
    Present: Representatives Markey, Inslee, Herseth Sandlin, 
Cleaver, Speier, Sensenbrenner, and Capito.
    Staff present: Jonathan Phillips.
    The Chairman. Welcome, ladies and gentlemen, to the Select 
Committee on Energy Independence and Global Warming.
    I think it is appropriate to begin this hearing today on 
the Recovery Act with a reflection on where our Nation stood 1 
year ago. Our economy was in a free fall. The Dow was below 
6500, down 54 percent from its high. Less than 2 months into 
the Obama administration, unemployment had already hit a 25-
year high. People stopped looking at their 401(k) statements, 
spending froze, businesses shuttered, credit disappeared, and 
everyone wondered when the downward spiral would end.
    While the Nation's collective economic security was 
disappearing before our eyes, many of the pillars of American 
strength have been quietly decaying in the shadows for decades. 
Roads and infrastructure were crumbling, schools were sinking 
deeper into mediocrity, our middle class was losing ground. At 
the same time, China, Germany, and other nations were racing 
past us in the 21st century's greatest growth industry, clean 
energy.
    Amidst this storm, Congress passed the American Recovery 
and Reinvestment Act; and it became law on February 17, 2009. 
As a result, two million people have jobs today that otherwise 
would not. This emergency legislation has not only helped us 
round the corner on the worst recession in generations, it has 
become the catalyst for reinvesting in America's future.
    Nowhere is this reinvestment more apparent than in clean 
energy, where the Recovery Act targeted $90 billion to jump-
start jobs in efficiency, wind, solar, advanced battery 
technology, and countless other critical industries.
    Equally important, these investments are laying the 
foundation for a new era of innovation and technology 
development that will provide the next generation of Americans 
with economic security and job opportunities over the long 
term.
    While we still have a long journey ahead of us, I think we 
need to take stock of how far we have come with the Recovery 
Act.
    A decade ago, we had a grand total of 450 megawatts of 
solar electricity installed in the United States. Flash 
forward. We installed 480 megawatts of solar in 2009 alone. In 
2010, the solar industry is likely to bring on line the likely 
equivalent of a nuclear power plant. Solar energy programs in 
the Recovery Act supported more than 10,000 new jobs in 2009, 
and it is likely to support another 30,000 in 2010.
    Then there is wind. Four years ago, 25 percent of the 
components of a wind turbine was made in America. Today, more 
than 50 percent is made in America. Annual additions of wind 
power have quadrupled during that time, from less than 2,500 
megawatts in 2005 to nearly 10,000 new megawatts installed in 
the United States in 2009. When the wind factories supported by 
the Recovery Act come on line over the next couple of years, 
the average content is likely to be over 70 percent in these 
wind facilities.
    Then we have the advanced batteries that are going to power 
the electric vehicles rolling off assembly lines later this 
year. Asia owns 98 percent of that market today. With Recovery 
Act investments, the U.S. global markets share is projected to 
raise to 20 percent next year and 40 percent by 2015. Imagine 
the jobs that will be created when we stop sending $250 billion 
a year overseas for oil and start sending money to the workers 
in Michigan and Ohio who are building our electric batteries. 
Make no mistake, clean energy industrialization is happening in 
America, and the Recovery Act is playing a major part.
    Public investment in innovation is a proven all-American 
pathway to long-term economic security and job creation. The 
public investment behind Neil Armstrong's one small step 
spurred giant technological leaps that ensured American 
economic security for generations.
    The Recovery Act reoriented America to the future and 
refocused our efforts and our strengths. Our strength is our 
ability to innovate. As we move forward into a clean energy 
future, we will wean ourselves from our greatest weakness: 
addiction to oil. The Recovery Act laid that foundation. A 
long-term policy like the Waxman-Markey bill, which the House 
passed last June, will ensure that the thousand flowers of the 
Recovery Act are likely to fully bloom.
    That completes the opening statement of the Chair.
    I now turn and recognize the ranking member of the 
committee, the gentleman from Wisconsin, Mr. Sensenbrenner.
    [The prepared statement of Mr. Markey follows:]

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    Mr. Sensenbrenner. Thank you very much, Mr. Chairman.
    You never have to admit you are wrong if you always argue 
that things could be worse. The unemployment rate is hovering 
around 10 percent, and the economy has lost around 3.3 million 
jobs since Congress passed the $862 billion stimulus bill. But 
the majority has still convened today's hearing to celebrate 
the bill as a success. No matter how sluggish our economy gets, 
they always can pretend that things are better than they could 
have been.
    I am still hopeful that last year's $862 billion stimulus 
bill will help get people back to work. But this is mostly 
wishful thinking. Evidence already shows that this massive 
government program is unlikely to produce any significant 
growth in the workforce. There are good intentions behind some 
of these so-called green jobs projects, but we also need 
accountability.
    The stimulus program was a failure, and we need an honest 
accounting as to why.
    Spending government money can create jobs, but most of 
these jobs are entirely dependent upon the government's 
subsidies. Take away the subsidy, the job goes, too. Based on 
per unit of energy output, wind and solar energy products 
received 50 times more subsidy than coal. The subsidies 
required to create these green jobs result in the loss of 
economically sustainable jobs in other industries. Experiences 
abroad have already documented this fact.
    Spain spent $1.6 billion to subsidize its solar industry. A 
study from a Spanish university, however, found that for every 
job this money created, it cost the economy 2.2 jobs in other 
industries. The same study also found that 9 out of 10 jobs 
created by the subsidies were temporary in nature.
    The Obama administration immediately attacked the study, 
but critics must account for the fact that, since implementing 
the subsidies, the unemployment rate in Spain has climbed to 
nearly 20 percent. I know the playbook is to argue that things 
would have been worse without the subsidies, but when one in 
five people are unemployed, how much worse can it get?
    The administration was so frightened by the Spanish 
statistics that it took what the Department of Energy employees 
described as an unprecedented step of issuing a direct 
rebuttal. DOE contracted with a national renewable energy lab 
to produce a response to the Spanish study. Documents obtained 
through a FOIA request by the Competitive Enterprise Institute 
made it clear that the administration's rebuttal was written in 
conjunction with wind lobbyists and other advocacy groups. This 
blatant conflict of interest not only undermines the integrity 
of NREO's attack but also exposes the agenda of the report 
sponsors.
    Unfortunately for us, the stimulus bill might actually be 
of some help to Spain. The Investigative Reporting Work, a 
product of the School of Communication of American University, 
found that a majority of the program's grants went to foreign-
owned companies and that a majority of the turbines purchased 
with the money were built by foreign manufacturers. The 
workshop found that of the $1.05 billion in clean energy grants 
handed out by the government since September 1, 84 percent--a 
total of $749 million--have gone to foreign wind companies. The 
Spanish utility company Iberdrolla, SA, alone has collected 
$545 million through its American subsidiary.
    In response to a letter from Democratic Senators 
criticizing the stimulus program, Secretary Chu wrote that all 
the wind turbine installation jobs are created here in America. 
So we are spending U.S. taxpayer money to create long-term 
manufacturing jobs abroad and consoling ourselves because we 
are also creating a few short-term construction jobs here at 
home.
    The job creation benefits of the stimulus package were 
further undermined by the Democrats' political alliance with 
unions. The Government Accountability Office recently found 
that the pro-union Davis-Bacon language in the stimulus bill 
meant Energy Department officials have to spend valuable time 
determining the prevailing wages for these so-called green 
jobs. This bureaucratic exercise cost valuable time during a 
period where many Americans needed the work.
    In the case of weatherization, the Energy Department spent 
only 8 percent of the nearly $5 billion budgeted to improve 
energy efficiency in homes across the country. Indeed, a study 
by the Heritage Foundation shows that Davis-Bacon rules require 
government contractors to pay wages that average 22 percent 
above the market rate, and suspending Davis-Bacon rules would 
let the government hire 160,000 additional workers.
    I am glad that Brian Johnson of Americans for Tax Reform is 
here to tell us more. He will testify that Davis-Bacon rules 
reduced the jobs-creating benefits that the stimulus bill 
sought to create. The question is what are the priorities of 
the authors of the stimulus bill.
    I also want to welcome Mary Ann Wright of Johnson Controls, 
who are based in my district, and thank her and her company for 
their work in cutting-edge battery power. I believe the only 
way we can confront climate change is through technology 
breakthroughs, and I am in fact a lead author and original 
sponsor of the Hybrid Truck Act, which has twice passed the 
House.
    I hope this hearing proves to be the beginning of 
legitimate oversight, rather than an attempt to spin 
ineffective policies.
    I yield back the balance of my time.
    The Chairman. The gentleman's time has expired.
    The Chair recognizes the gentlelady from South Dakota, Ms. 
Herseth Sandlin.
    Ms. Herseth Sandlin. I thank the chairman for holding this 
hearing giving us this opportunity to examine how the Recovery 
Act has played a key role in maintaining and fostering the new 
energy economy.
    I supported the Recovery and Reinvestment Act in order to 
prevent the worst recession since World War II from lasting 
longer and going deeper, to build infrastructure and invest in 
other ways in the future of South Dakota and the country.
    As an example, South Dakota has already been allocated $9.6 
million in Recovery Act smart grid funding, Batros Power in the 
western part of the State is slated to receive $5.6 million in 
Recovery Act funds, with 50 percent cost share to install smart 
metering technology, and Sioux Valley Energy Electric 
Cooperative was awarded $4 million to install SMART meters.
    As virtually every economist agrees, we needed an 
aggressive recovery package to stem the loss of jobs, to save 
jobs, to create jobs, and to reinvigorate demands for goods and 
services that had evaporated in the economic collapse triggered 
by the financial meltdown originating from risky and 
unconscionable actions on Wall Street. Our Nation was in a free 
fall, losing hundreds of thousands of jobs a month, and we 
needed to act. As South Dakota's Republican governor has said, 
the Recovery Act played a key role in balancing South Dakota's 
budget in multiple years, while reducing cuts to critical 
programs as our State suffered from the downturn.
    Moreover, one of the key components of the Recovery Act 
conveniently overlooked by its critics is over a third of it is 
tax cuts for families and businesses, including a long-term 
extension of the production tax credit for wind through 2012, a 
tax credit of up to $800 per family for 2009 and 2010, tax 
relief for small businesses, and a cut in the capital gains tax 
for those who invest in small businesses.
    In addition, I have met with homegrown wind developers and 
other domestically headquartered wind blade manufacturers who 
have brought hundreds of jobs to South Dakota who have praised 
the Recovery Act's extension of the production tax credit and 
the new Treasury grant in lieu of the investment tax credit 
included in the Recovery Act. I have heard firsthand how these 
measures are allowing the survival of domestic wind development 
in the United States, creating jobs and fostering economic 
development in rural communities.
    So I thank you again, Mr. Chairman, for holding this 
hearing and look forward to the testimony of our witnesses 
today.
    The Chairman. The gentleman from Missouri, Mr. Cleaver, is 
recognized.
    Mr. Cleaver. Thank you, Mr. Chairman.
    I think it is important for us to take a look at the impact 
of the ARRA legislation.
    Mr. Chairman, I was in the room as a member of the 
Financial Services Committee. I was sitting there when 
President Bush's Secretary of the Treasury, Hank Paulsen, along 
with Ben Bernanke, along with Mr. Cox, our former colleague, 
and Sheila Bair sat at a table not dramatically unlike the 
table before us today; and from their lips fell the most bone-
chilling testimony I have ever heard since being in government.
    They explained to us that if the Fed did not act quickly 
that the U.S. economy would fall from the precipice, taking 
with it the economy of the planet. President Bush pushed hard 
to take action, and I don't disagree. And we took action. We 
then, after electing President Obama, began to address this 
problem that was deepening even after trying to put a 
tourniquet on the Wall Street entities that could have also 
taken down other financial institutions around the country.
    President Obama put forth a stimulus package. Some, like 
Paul Krugman, the Economist journalist, believed that it was 
too small, that you can't have a $15 to $17 trillion economy 
and try to completely turn things around with less than a 
trillion dollar stimulus. Nonetheless, we approved it, and I 
supported it and supported it strongly.
    If you look at the job losses in the United States over the 
last decade, you would be alarmed. Because many of those jobs, 
even after this recession ends, will not return. And I fear 
that the 3.5 unemployment, full employment number, is going to 
have to be adjusted, that no longer can we expect full 
employment to be when 3.5 percent of the American public is 
unemployed. That is probably going to go up after this 
recession is over. So the only thing remaining for us to do is 
to create new jobs, and ARRA gave us the opportunity to create 
new jobs.
    In Kansas City, Missouri, one of the cities I represent in 
Missouri, we used the money to create what is called the Green 
Impact Zone, 150 blocks of the most decrepit piece of geography 
in urban America. One census track shows unemployment at 70 
percent. The Kansas City Star did a story on this track and 
called it the Murder Factory.
    We have been able, since ARRA, to get a matching grant from 
the Department of Energy to match a $24 million grant from our 
power and light company to begin the construction of a smart 
grid. Men and women are hired today, this day, who live in the 
Green Impact Zone who will be a part of the construction team 
for the smart grid. And we are weatherizing 3,000 homes, and 
the men and women doing the weatherization are men and women 
who are unemployed, and, yes, some of them were union members.
    The point is, as I close, Mr. Chairman, that this is 
working and working well.
    Thank you, Mr. Chairman.
    The Chairman. I thank the gentleman.
    The gentlelady from California, Ms. Speier.
    Ms. Speier. Thank you, Mr. Chairman.
    I am glad that we are here today to discuss clean energy 
jobs which are crucial not only for our economic recovery but 
for our long-term economic growth.
    On Monday of this week, I organized a bus tour to inspect 
the progress of recovery projects in my district. From 300 
construction jobs at San Francisco Airport, job training for 
transportation workers, new buses fueled by biofuel, aid to 
services for the unemployed, and a collaborative partnership to 
secure $2 million in grants to re-house the homeless, I can see 
the impact of timely and targeted recovery funding working in 
my district.
    What was very interesting during the tour was I visited a 
company that built super-efficient surge protectors for our 
electric grid to shield consumers from blackouts. The company 
received 8.5 million ARRA grant dollars to fund an installation 
in southern California and has already expanded its 
headquarters to a larger facility. One thing they pointed out 
to me, though, was that there is no testing facility in the 
United States. So they have to actually transport this huge 
piece of equipment to Vancouver to test it, another opportunity 
for us to start growing some of these opportunities at home.
    Another company based in south San Francisco received $21 
million in recovery funding to build an advanced biofuels 
refinery in Pennsylvania which will create jobs in both 
locations and will help them scale up production of a cutting-
edge renewable biofuel which will help us break our addiction 
to oil.
    Finally, my district is home to the Nation's leading solar 
power provider for homeowners on up to Federal Government, and 
thanks to the Recovery Act policies for renewable energy 
providers that has ended its hiring freeze and plans to add 16 
new solar installation crews in the coming months.
    I know we have much to hear from our witnesses, and I yield 
back.
    The Chairman. The gentlelady's time has expired.
    The Chair recognizes the gentleman from Washington State, 
Mr. Inslee.
    Mr. Inslee. I want to make a point about--maybe someone has 
already said it--I just met a woman named Elana Meyers, who was 
our Gold Medal winner in the bobsled competition in Vancouver; 
and it was the first time I ever got to hold a Gold Medal. It 
was pretty cool. But it made me think about another competition 
we are in about who is going to get the Gold Medal in the clean 
energy economy. And if it wasn't for ARRA, we would be giving a 
huge head start to China. ARRA allowed us to get out of the 
chute, at least to begin getting into this competition with the 
rest of the world to see who is going to be preeminent in clean 
energy.
    And I just want to make two points about why ARRA was 
successful in getting us into the race, two companies I will 
mention.
    I met a fellow from Johnson Controls the other day who said 
they are going to start building a lithium ion battery 
manufacturing plant in Michigan, hopefully construction this 
fall, which would not have happened but for ARRA. And we would 
not have any meaningful manufacturing plant in the United 
States but for ARRA in this regard.
    And in the R&D provision, we have a company called Energy 
II. It is in Seattle. It has got a $20 million-plus grant to 
fund ways to use nanotechnology to make ultra capacitors 15 
times more efficient and more dense.
    So ARRA has got us into the race. We are in the race, and 
we wouldn't have been for it, and I am glad we are in the race.
    The Chairman. And the gentleman's time has expired.
    Maybe what we could do is hear from Johnson Controls. The 
gentleman from Washington State has, as you know, given Johnson 
Controls a little bit of a plug here. So while the gentleman is 
here--we apologize to the other witnesses who have been told 
what the order will be--I thought maybe we could start with 
you, Mary Ann Wright, Vice President of Johnson Controls and 
Managing Director of the company's Business Accelerator Project 
for advanced energy storage solutions. Perhaps you could expand 
upon what Mr. Inslee was just referring to.

  STATEMENTS OF MARY ANN WRIGHT, VICE PRESIDENT AND MANAGING 
DIRECTOR, JOHNSON CONTROLS, INC.; PAUL GAYNOR, CHIEF EXECUTIVE 
    OFFICER, FIRST WIND; LISA PATT-McDANIEL, DIRECTOR, OHIO 
   DEPARTMENT OF DEVELOPMENT; BRYAN ASHLEY, CHIEF MARKETING 
  OFFICER, SUNIVA, INC; AND BRIAN M. JOHNSON, FEDERAL AFFAIRS 
               MANAGER, AMERICANS FOR TAX REFORM

                  STATEMENT OF MARY ANN WRIGHT

    Ms. Wright. Chairman Markey, Congressman Sensenbrenner, and 
the rest of the members, thank you very much for inviting us 
here to tell you what we are doing with our Recovery matching 
grant; and I also appreciate that you did it today because I 
have to head back to Milwaukee and greet all of my new 
employees in Milwaukee that we are hiring as a result of the 
work we are doing in the United States.
    I have three things that I want to talk about. One is the 
state of the industry in general, number two is what we are 
doing with our stimulus grant, and number three is the 
challenges that we face.
    I think you have a packet of some pictures. It is also in 
the written testimony, and I would like to kind of talk you 
through this. Because if you look at this, what should pop out 
at you is it is a pretty scary picture.
    If you take a look over in the right, a cell, which is 
this--and there is about 100 to 200 of them in these electric 
vehicles--50 to 75 percent of the value is in the cell. All of 
these materials come from virtually the Pacific Rim who has a 
stranglehold on the supply base. Over on the left-hand side is 
the system, and that is where we put the cells and integrate it 
and put it into the vehicle.
    And if you think about this for a minute, if we don't 
change this, we will change our oil cartel, our OPEC oil cartel 
for an Asian battery cartel. And to scare you a little bit 
more, our Pacific Rim friends aren't standing still. They 
continue to invest in manufacturing capability, technology, and 
capacity.
    In 2008, Johnson Controls opened up the world's first 
lithium ion manufacturing facility for automobiles in Nersac, 
France, in 2008. Out of that facility, we supply on a mass 
production scale Daimler and BMW. For pre-production, we 
support our customers Ford, Azure Dynamics, Jaguar, Land Rover, 
and Volkswagen.
    In 2009, we were the recipient of a stimulus grant. And the 
key thing that I would like you to take away--and Congressman 
Inslee, you stole my thunder--and the fact is, in the absence 
of this grant, we would not have expanded our manufacturing in 
the United States. We were looking in Europe and in Asia, but, 
because of this action, we are going to build our first 
manufacturing facility in Holland, Michigan. As a matter of 
fact, it is up. We are retrofitting it, and we will begin 
production later this year for one of our customers and begin 
full-scale cell production next year. We are moving fast, we 
are moving decisively, and we are very encouraged by the 
actions that the legislature has taken.
    I think also--and it may be something Congressman Inslee 
doesn't know--that by 2012 we will move and transition all of 
our European production into this U.S. facility, and I think 
that is a real feather in our cap versus what is typically 
happening in our economy.
    When we were awarded our grants, our commitment wasn't just 
to put up a plant but that we would help stand up an industry; 
and that involves everything from our raw materials suppliers 
all the way to our end-of-life recycling infrastructure.
    Johnson Controls presently is the largest provider of your 
starter batteries and the largest recycler of these batteries 
as well, so we are going to build on those capabilities of a 
long-standing, mature company and industry to be able to 
transition that into lithium ion.
    But if you think about the materials for a moment, as I 
said, most of those comes from the Pacific Rim. One of our 
commitments is to develop a domestic supply base. I am very 
happy to let you know that we have recruited two Asian 
suppliers to the United States who will be setting up business 
in Michigan and supplying the U.S. market. We need to continue 
to develop a domestic supply base as well.
    We have great partners in Ford Motor Company, Azure, 
Daimler, BMW. We have terrific long-standing partnerships with 
Argonne National Laboratory in Oakridge to continue our work on 
our technology.
    In Milwaukee, which is our headquarters for this business, 
we have stood up a team called the accelerator team, which I 
lead; and our job is to accelerate the demand creation and the 
technology and innovation so that we can have a sustainable 
business that does not rely on subsidies and incentives, that 
can be profitable.
    So while we have customers, this is terrific. We have some 
great partners. We have an issue. And one of the graphs that I 
gave you was the demand. And if you take a look out in the 2015 
time frame, we believe there will be about 4 million units of 
global capacity versus 2 million units of demand. In North 
America alone, there will be about 2 million units of capacity 
and 800,000 units of demand. We have got to find a way to fill 
that gap.
    Transition of government fleets is going to be an important 
piece of that because, one, it allows us to drive scale, which 
is a key part of our business equation and, number two, we have 
over a million units in these fleets in the GSA and Postal 
Service which are perfectly suited because--I am running out of 
time.
    Respectfully, I want to leave you with one key piece, 
however, is that we need to make sure we leverage these 
recovery investments as we transition these fleets and as we 
build our industry. Shouldn't we give preference to vehicles 
that are built with batteries and electric drive components 
that come from investments that we made here in the United 
States so that we don't allow these vehicles and this industry 
to transition from a Middle Eastern OPEC to an Asian battery 
cartel?
    Thank you very much.

    [The statement of Ms. Wright follows:]

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    The Chairman. Thank you very much, and thank you for 
telling us something Jay Inslee doesn't know. That is a first 
in this committee.
    Our next witness is Paul Gaynor, who is the CEO of First 
Wind, an independent company focused on the development, 
ownership, and operation of wind farms. Mr. Gaynor has over 20 
years of experience in the energy industry and has been 
involved in the financing of these projects around the world.
    We welcome you, sir.

                    STATEMENT OF PAUL GAYNOR

    Mr. Gaynor. Thank you, Chairman Markey, Ranking Member 
Sensenbrenner, and members of the committee. Thank you for 
inviting me to testify today.
    My name is Paul Gaynor. I am the CEO of First Wind, a U.S.-
owned, independent wind energy company based in Massachusetts. 
We are focused on the development, financing, construction, 
ownership, and operation of utility-scale wind farms in the 
United States. We have been in business since 2002, and today 
we operate about 500 megawatts of clean, renewable wind power 
through six operating projects in Maine, New York, Utah, and 
Hawaii. Currently, we are wrapping up construction on our 
seventh project, the Stetson II expansion in Maine. All in all, 
these facilities represent an investment of approximately $1.2 
billion.
    First Wind currently employs over 200 professionals in nine 
States in this new industry. In the communities that we work, 
we also rely heavily on people in these communities with local 
knowledge in order to properly site, build, and operate wind 
farms. Our projects generate significant amounts of employment 
and economic activity, which I will cover in more detail 
shortly.
    I have been asked to address the impact of the clean energy 
provisions of the Recovery Act on our company; and the answer, 
in short, is the Recovery Act has been profoundly important to 
our ability to continue to grow and to make investments in 
renewable energy facilities. This has also resulted in 
approximately 1,000 jobs in 2009, and we expect a similar 
number in 2010.
    The convertible investment tax credit, or ITC, has had the 
most impact with the collapse of the credit markets in 2008. 
Sources of capital practically dried up overnight. As a 
relevant example, we lost a $140 million firm commitment from 
Lehman Brothers for a project that was under construction in 
New York. Then Lehman filed for bankruptcy, and the commitment 
was lost. At that point, all sources of capital were frozen; 
and an analysis by the American Wind Energy Association shows 
that in 2009 wind power development might drop as much as 50 
percent from the 2008 levels.
    Fortunately, Congress and the Obama administration 
recognized the threat that this extraordinary economic turmoil 
presented to our industry and responded with urgency and 
effectiveness. Thanks in large part to the clean energy 
provisions of the Recovery Act, the U.S. wind industry broke 
all previous records by installing nearly 10,000 megawatts in 
2009, as the chairman noted in his opening comments. The 
Recovery Act provided the help we needed when we needed it.
    During 2009, First Wind completed construction of wind 
facilities in Maine, New York, and Utah and began construction 
on another project in Maine. In partnership with our general 
contractors, RMT in Wisconsin, Mortenson Construction in 
Minnesota, and Reed & Reed in Maine, we created over 1,000 jobs 
during the construction of these facilities. And without the 
convertible tax credit program, the construction job creation 
and long-lasting economic impacts would not have happened.
    Using the Stetson projects and the ongoing expansion as an 
example, the combined facility represents a $220 million 
investment, with over 130 local named businesses providing 
goods and services during the development and construction 
phases, about 550 construction jobs in both phases.
    For another example, I draw your attention to the pamphlet 
that I have handed out which outlines the economic benefits of 
our 200 megawatt Milford wind project in Utah. In this project, 
over 60 local businesses participated, creating 250 jobs on 
site and supporting an additional 200 jobs in the region.
    Additionally, because of the Recovery Act, we have been 
aggressive in forging ahead with our business plans in 2010 and 
beyond. We plan to construct a second phase in Utah plus 
additional projects in Maine, Vermont, New York, and Hawaii, 
representing an additional 300 megawatts of power capacity and 
an incremental $650 million of new investment in this sector.
    The success of the program has importantly sent a strong 
signal to the capital markets and mobilized significant 
incremental capital. In our case, the Recovery Act funding has 
spurred an additional $695 million of our own equity and loans 
from banks. We expect a similar impact on our 2010 plans.
    Wind power is a capital-intensive business; and, thus, the 
opportunity to use Recovery Act funding to leverage significant 
private investment has been extraordinarily effective and 
important.
    Additionally, I want to let you know that last week 
Secretary Chu announced that one of our projects has received a 
conditional commitment from the DOE under the Innovative Loan 
Guarantee Program. The Kahuku project in Hawaii uses an 
innovative battery storage system to address some of the wind 
integration issues facing the local utility.
    We encourage Congress to follow the leadership of Chairman 
Markey and others on this committee who are trying to foster a 
more stable and predictable investment and regulatory climate 
for renewable energy. In particular, we hope Congress will make 
it a priority to extend the convertible tax credits this year. 
Access to capital has improved, but it remains far short of 
pre-financial collapse conditions.
    Thank you for the opportunity to take part in this hearing. 
I look forward to answering your questions.
    [The statement of Mr. Gaynor follows:]

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    The Chairman. Thank you, sir.
    Our next witness is Lisa Patt-McDaniel. She is the Director 
of the Ohio Department of Development, and she leads efforts to 
accelerate Ohio's economic growth through development of high-
growth industries. She oversees Ohio's Recovery Act efficiency 
programs, including weatherization.
    Welcome.

                STATEMENT OF LISA PATT-McDANIEL

    Ms. Patt-McDaniel. Thank you, Chairman Markey. I want to 
thank you for the opportunity to speak with you today on behalf 
of Governor Strickland and myself.
    The Ohio Department of Development is responsible for 
distributing $512 million in stimulus funding through a variety 
of programs ranging from homeless assistance to renewable 
energy deployment. Ohio's nationally recognized home 
weatherization assistance program is administered by our 
Department's Community Development Division and specifically 
our Office of Community Services. We are providing assistance 
for citizens whose annual household income is at or below 200 
percent of the Federal poverty guidelines.
    The State's weatherization budget from the Federal stimulus 
is $266 million. More than 32,000 housing units will be 
weatherized during the 3-year grant period and more families 
will get the help they sorely need and local businesses will 
see an increase in sales of materials, supplies, and trucks to 
carry out the larger program.
    Ohio's process for utilizing weatherization resources 
effectively and expeditiously is one of the reasons I have the 
honor of speaking to you today. Ohio was recently recognized by 
the USDOE as leading the Nation in spending Recovery Act 
dollars to weatherize homes, with Ohio completing more than one 
in five of the projects reported nationally last year.
    Since July, 2009, our State has weatherized over 8,100 
homes. Dwellings weatherized to date represent 103 percent of 
our planned production so far, meaning that we have weatherized 
an additional 204 additional units than originally planned. 
And, importantly, the additional support for our weatherization 
program has required the creation of another thousand jobs and 
retained 1,500 jobs as of December of 2009.
    We believe there are several reasons why our State was able 
to ramp up and respond to the needs of our citizens so quickly. 
Just to highlight, we have an excellent weatherization network. 
We have a large list of eligible households that we had before 
the Recovery Act was passed. We have an excellent Ohio 
weatherization training center. It is run by a corporation for 
Ohio, Appalachian Development; and we established three 
training hubs so we can train people to work in these jobs 
quickly. And, importantly, we instructed our providers to go 
ahead and start weatherizing homes with these funds as of July 
1st, knowing that we would have to make up our staff salaries 
and retroactively adjust them once the prevailing wage rates 
were issued by the Department of Energy.
    By reducing household energy expenditures, increasing 
energy efficiency, and increasing the safety of homes owned or 
occupied by low-income Ohioans, we have a foundation to make 
our State a cleaner, more efficient place to live.
    There are several important programs that complement our 
efforts to create jobs and promote energy efficiency, and these 
are through the State energy program, which received $96 
million of Recovery assistance. We designed programs through 
that set of money to stimulate the economy through the 
retention and creation of jobs, saving energy, increasing 
generation from renewable energy projects, and reducing 
greenhouse gas emissions.
    I am going to briefly touch on the programs that we 
designed with that $96 million, but the programs were meant to 
support our aggressive renewable energy portfolio. It is the 
third most aggressive portfolio in the Nation, and we wanted to 
make sure that we created jobs with a focus of the expenditure 
of these programs.
    We set up a Deploying Renewable Energy in Ohio Initiative 
which is investing more than $42 million of those funds through 
renewable deployment projects focusing on strengthening Ohio's 
manufacturing industry, transforming waste to value by 
capitalizing on what would otherwise by considered waste by-
products from Ohio's agricultural and food production 
industries and turning it into a source of renewable energy.
    We took $8 million and allocated it to making efficiency 
work through grants to help fund greater energy efficiency 
projects. Our targeting industry efficiency program provides 
for $15 million in grants to manufacturing companies seeking to 
improve the sustainability of Ohio's industry. The banking on 
new energy financing, which we also call the Ohio Energy 
Gateway Fund, is a private-public partnership which will expand 
access to capital to grow and sustain the fuel cell, solar, 
wind, and energy storage industries in Ohio; and, finally, 
setting the stage for Ohio's Carbon Management Strategy 
Initiative, which is allocating $500,000 to organize an 
integrated collaborative planning process to address energy 
policy.
    The announcement of the targeted industry efficiency 
portion of the State energy program will create an estimated 
217 jobs across the States.
    In conclusion, I would just like to say that we are 
building on the foundation with the Recovery Act funds, and 
they have been very important to us in promoting Ohio's 
economy.
    I thank the Chairman and the ranking member and the 
committee members for having me speak today.
    [The statement of Ms. Patt-McDaniel follows:]

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    The Chairman. Thank you.
    Our next witness is Brian Ashley. He is the chief Marketing 
Officer of the solar company Suniva and has most recently led 
Suniva's emergence into the Indian and European solar 
photovoltaic markets.

                   STATEMENT OF BRYAN ASHLEY

    Mr. Ashley. Thank you very much. I am very proud and 
honored to be here before the committee today.
    Suniva is a great American jobs and export success story. 
We manufacture some of the world's most efficient and highest 
power silicon solar cells and modules, and we use low-cost and 
manufacturing techniques to do so. Therefore, we can beat the 
Chinese at their own game.
    In fact, this is what we make in Norcross, Georgia. It is 
about 4.3 watts when the sun shines on it; and, Mr. Chairman, I 
will be happy to give this to you. You can tape it on the 
module that you have in your office and modernize it a little 
bit.
    Suniva was spun out of the Department of Energy funded 
University Center for Excellence in Photovoltaics at Georgia 
Tech University with a deep patent portfolio of American 
patents and technology and access to one of the best solar labs 
in the world for our research and development. It is a great 
example of governmental-funded research helping create U.S. 
industry leadership and 150 new jobs since 2007 when we were 
founded. Very good, well-paying jobs, I might add.
    We currently have a hundred megawatts of capacity in our 
plant in Atlanta, and we do produce the highest efficiency at 
low cost solar cells in the world. We produce 18 percent 
efficiency cells today. Most of our competitors are at about 
16.8 percent. And that efficiency, of course, represents the 
amount of sunlight actually converted to electricity.
    We expanded in 2009. We added 80 new direct jobs, provided 
over 200 indirect jobs, and spent $19 million on new equipment 
for our lines. We received 48C credits of $5.7 million for that 
investment, and we thank you very much. This was very important 
to the expansion and being able to add these jobs sooner than 
we would have been able to.
    Domestic demand has also been stimulated for solar thanks 
to the Treasury's 1603 provisions which gave us the additional 
confidence to move up the expansion dates earlier than planned, 
as well as for our plant, too, which I will mention in a 
minute. And the demand there is turning into real business here 
in the United States. We currently employ many former auto 
workers and managers from shuttered GM and Ford plants in the 
Atlanta metro area; and 24 percent of our workforce are 
veterans, mostly from the Iraq war.
    We exported 90 percent of our 2009 production. We are 
beating the Chinese. I exported to India, China, South Africa, 
even to Taiwan.
    The first grid-connected solar farm in India in the state 
of West Bengal is powered by Suniva cells manufactured by 
workers in Norcross, Georgia, instead of Shanghai.
    Currently, the second largest solar farm in India in 
Karnataka state, which Prime Minister Singh will dedicate this 
month himself, is also powered by American technology made in 
Norcross, Georgia.
    The roof of the new sports stadium in New Delhi, which will 
be home to the commonwealth games, has 1.1 megawatts of Suniva 
cells.
    We have power fields in Germany, Italy, and France powered 
by Suniva; and the list is growing.
    We plan to export at least 85 percent of our production 
this year, which is greatly expanded from last year--if we can 
expand quick enough.
    Our problem is we are sold out. We have had to turn away 
new export customers since last December, unfortunately, 
including another Chinese company that wants to buy my 
products. We have had to impose limits on the allocations to 
our current customers.
    I was in India three weeks ago on a U.S. Commerce 
Department Trade mission and had to turn business away. I am 
sad to say that Chinese and Taiwanese workers will benefit from 
that and get that business rather than more U.S. workers.
    The Chinese and Taiwanese are very, very serious about 
owning the solar PV value chain which we in this country have 
neglected far too long; And they will own it like they own many 
other manufacturing industries if we don't continue to do what 
you started to do in the last year to help support us.
    There are many high, very large, well-funded Asian 
businesses that are trying very hard to do what we do. Right 
now, we are the only ones who do what we do with our 
technology, but they will catch up with us. They will figure it 
out. And we have got to stay ahead of them. But we have also 
got to spend money on expanding and creating new jobs to meet 
that customer demand. It is a big tradeoff, and right now it is 
hard to borrow money still. It is damn hard to borrow money 
still, I am sorry to say.
    We are currently building out a 30,000 square foot physical 
extension to our facility in Atlanta right now, adding a new 
70-megawatt line. That is 50 new direct jobs we are hiring 
right now and 200 indirect jobs in construction. An extension 
of extra funding in 48(c) like the President has asked for will 
help us a lot, especially if it is refundable quickly so we can 
turn it into cash. We would immediately apply if that were to 
happen. Reasonable financing is very hard to get.
    We are planning our second plant, a 400 megawatt initial 
capacity plant in Saginaw, Michigan, 500 direct jobs, 21,000 
indirect jobs according to Michigan Economic Development. It 
will go to a gigawatt eventually. We are awaiting word right 
now from the DOE on a loan guarantee so we can break ground and 
start this. Again, if 48C were expanded and refundable, like 
1603, we would put in an application ASAP for that equipment.
    Other areas where you could help create more clean tech 
jobs are in RPS and certainly in national feed and tariff would 
be extremely helpful.
    We are competing against the Chinese. We need U.S.-based 
solar industries as a matter of national security, I believe. I 
invite all of you to come to Atlanta, see our facility and see 
the jobs. See the former auto workers and the veterans working 
there. It is real.
    Thank you.
    [The statement of Mr. Ashley follows:]

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    The Chairman. Our final witness today is Mr. Brian M. 
Johnson. He is the Federal Affairs Manager for Americans for 
Tax Reform and is the Executive Director of the Alliance for 
Worker Freedom.
    Welcome, sir. Whenever you are ready, please begin.

                 STATEMENT OF BRIAN M. JOHNSON

    Mr. Johnson. Good morning, Chairman Markey, Ranking Member 
Sensenbrenner. I appreciate the opportunity to appear before 
you today to discuss the effects of the Recovery Act on our 
economy with respect to green job creation.
    Government spending of this magnitude cannot stimulate our 
economy. Every dollar spent attempting to force the market 
toward a specific sector is subject to taxation and must be 
first borrowed out of our economy. The result is a 
redistribution of existing purchasing power, rather than the 
creation of new purchasing power. This spending creates less 
economic activity than if the money had been left with private-
sector investors.
    The goal was to create 3.6 million jobs, according to the 
administration's own estimates. Since signed into law, we have 
lost 3.3 million jobs. According to Recovery.gov, there were 
440 non-existing congressional districts that saved or created 
false jobs to the tune of $225,000 per job. Any potential 
impact the recovery package brought to the economy was 
virtually negated by the application of a 1931 market-
distorting wage law known as the Davis-Bacon Act. Investigators 
from the Office of Inspector General found that, quote, one or 
more errors existed in 100 percent of the wage reports they 
reviewed.
    The Davis-Bacon Act inflates wages on average by 22 percent 
nationwide and construction costs by almost 10 percent. 
Application of this wage law added $17 billion to the Recovery 
Act and is impeding efficient implementation of the 
weatherization program nationwide. Mismanagement of the 
Recovery Act not only encompasses wasting money in the United 
States, but much of the money spent actually creates jobs 
overseas. Eighty percent of the first 
$1 billion spent on grants to wind energy companies went to 
foreign firms. In the second round of government grants, 79 
percent of the $2.1 billion went to wind energy companies based 
overseas.
    The renewable energy policy project estimates that for 1 
megawatt of wind energy that is developed, 4.3 jobs are 
created. The 1,219 turbines built by foreign-owned 
manufacturers have potential capacity of 2,280 megawatts. Using 
their estimate, the installation of these turbines may have 
created as many as 6,838 manufacturing jobs overseas.
    Domestically, the market-altering subsidization has the 
same economic effects. The Mohave Desert solar power project 
received $1.4 billion from the Recovery Act. Construction of 
that facility required a thousand workers but only 86 permanent 
employees to run the plant. That is $16 million in taxpayer 
subsidies per permanent job.
    In Florida, the DeSoto solar center was to be the, quote, 
largest solar power plant in the U.S., according to President 
Obama. The center received $150 million from the Recovery Act. 
After using 400 construction workers to build the site, the 
solar center now only employs two people.
    The single largest wind grant under the program reported by 
the Department of Energy on December 29th was $178 million for 
the Texas gulf wind farm in Sarita, Texas. All 118 turbines 
erected on the farm were built by Mitsubishi, a Japanese firm 
that does not build wind components in the United States.
    Perhaps the most evident use of mismanagement and inherent 
inefficiencies lie in the failed weatherization program. While 
some States have experienced success, national results have 
been dismal. The Recovery Act provided $5 billion to weatherize 
593,000 homes. ABC News reports that less than 10,000 homes 
have been weatherized nationwide, while the Department of 
Energy claims 22,000 homes have been impacted, which is still 
less than 4 percent of the targeted goal.
    So far, the Inspector General found the jobs impact has, 
quote, not materialized and the application of the costly 
Davis-Bacon requirement costs $57,000 per home weatherized 
nationwide on a national average.
    A State-by-State look exposes the localized impact of this 
flawed national program. New York has $394 million available to 
weatherize 45,400 units but only did 280. Alaska, Rhode Island, 
Wyoming, and Washington, D.C., were given over $50 million 
combined to weatherize homes. To date, zero homes have been 
impacted.
    The biggest expenditure in the stimulus weatherization 
program is $270 million. Not one penny of that went to actual 
home weatherization but was given to the Department of Energy 
to administer grants.
    The Recovery Act was supposed to be timely, effective, and 
show immediate results. The realization is that using the 
invisible hand of the government to artificially tilt the 
economy will never be sustainable. Responsible solutions should 
remove barriers for private investment and should incorporate 
an all-of-the-above energy approach using a diverse blend of 
sources without raising taxes or increasing the regulatory 
burden.
    Thank you again for the opportunity to speak today, and I 
look forward to answering any questions.
    [The statement of Mr. Johnson follows:]

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    The Chairman. Thank you, sir. You spoke so fast you left 
yourself 30 seconds over.
    The Chair recognizes the gentleman from Missouri, Mr. 
Cleaver.
    Mr. Cleaver. Thank you, Mr. Chairman.
    I thank all of you for your testimony.
    I am a little concerned. We just had economic output rise 
at the slowest level this past decade since any decade since 
1930, which means we have a serious challenge. And I am 
curious, Mr. Johnson, if you are criticizing government 
subsidies in the development of energy technology--and then 
make sure that you are--is that correct?
    Mr. Johnson. Yes.
    Mr. Cleaver. Do you ever find it necessary to criticize 
government subsidy of the oil industry?
    Mr. Johnson. The term ``subsidy'' has been thrown around a 
lot. One of the things a lot of industries benefit from are tax 
cuts. For example, section 199 is the domestic manufacturer's 
tax deduction that all companies who manufacture domestically 
in the United States get.
    Mr. Cleaver. We only have 5 minutes. Are you equally upset 
that we have subsidized the oil industry approximately $150 
billion at least from 1968 to the year 2000, 150 billion, we 
don't have decades of subsidization so that I am sure, does 
that bother you?
    Mr. Johnson. Yes. I think targeted spending toward any 
industry is flawed.
    Mr. Cleaver. So let me suggest what should we do when we 
have an economic downturn, should we say we are not helping 
create any new jobs, we are going to sit around and remain 
happy and allow the rest of the world to overtake us? What 
would you have done had you been sitting in the room with the 
people I named earlier?
    Mr. Johnson. Sure. You can create jobs without targeted 
spending. One of the ways which I mentioned was tax cuts. You 
can freeze spending and rescind unspent stimulus funds. You can 
reform regulations to reduce unnecessary business costs. And if 
you are intent on spending, you can make sure it is done 
efficiently and effectively by suspending all Davis-Bacon Act 
requirements.
    Mr. Cleaver. Are you aware that 30 percent of ARRA were tax 
cuts?
    Mr. Johnson. Thirty percent, yes.
    Mr. Cleaver. You were aware of that?
    Mr. Johnson. Yes.
    Mr. Cleaver. So you don't support that?
    Mr. Johnson. I support the tax cut component. The majority 
of the plan was spending, $836 billion.
    Mr. Cleaver. So we should have done a stimulus package that 
wasn't, in fact, a tax cut package?
    Mr. Johnson. Think we should have done the tax cuts without 
the targeted spending.
    Mr. Cleaver. So we should have had a stimulus package 
without a tax cut?
    Mr. Johnson. I am not supportive of a stimulus package at 
all.
    Mr. Cleaver. Including the tax cuts?
    Mr. Johnson. The tax cuts as part of the package--the tax 
cuts I support. Tax cuts in general I support. The stimulus in 
terms of targeted massive government spending programs--
    Mr. Cleaver. But the tax cuts were supposed to stimulate 
the economy.
    Mr. Johnson. The tax cuts are not spending. The part of--
most of the stimulus package was direct spending which came 
into the market in favor of targeted certain industries.
    Mr. Cleaver. So you don't support tax cuts?
    Mr. Johnson. I support tax cuts. I oppose targeted 
spending. They are two separate components.
    Mr. Cleaver. I understand clearly what they are. But I am 
saying you said you support tax cuts, but you don't support any 
stimulus. I am telling you the tax cuts were a part of the 
stimulus and you are saying, so I just want to know what you 
support.
    Mr. Johnson. I support tax cuts and not massive government 
spending.
    Mr. Cleaver. So after we put the tax cuts in, that should 
have been the bill we approved?
    Mr. Johnson. The bill should have been a broad based 
massive tax cut bill with no government spending.
    Mr. Cleaver. Okay. And so what about the fact that the rest 
of the world is taking off in terms of their technology in 
energy and what about the people who lost jobs, 8.4 million, 
8.4 million just since the recession started?
    Mr. Johnson. We are continuing to lose jobs. The stimulus 
package has not done anything near to what the economists 
predicted and what the administration said. The international 
experience hasn't been always positive. Spain, Germany, and 
Denmark have experienced extreme job losses in direct relation 
to targeted government subsidies with respect toward the Green 
JOBS Act. Only one in 10 of the jobs created through green 
investment is permanent in Spain. Germany is experiencing the 
same thing.
    Mr. Cleaver. Now you do recognize that Spain is a whole 
'nother industry that relates to deficits and debt and the 
Euro. Let's talk about another country. Let's not do Spain. 
Spain is having some problems like Greece, but I just want to 
deal with, I am trying to get, if you had been sitting in this 
seat, what you said let's just forget everybody, forget 
everything, let's just have some more tax cuts, that by the way 
were passed without any kind of means of making up for the tax 
loss. Would that have been your policy?
    Mr. Johnson. If I was sitting in that chair right now there 
were several things I would have done. Passing a massive 
spending bill is not one of them. Repealing the Davis-Bacon 
Act, enacting other reforms, making government more 
transparent, extending drilling areas. There are ways to reduce 
our energy independence and extend security.
    Mr. Cleaver. Okay, my last statement because my time is 
running out. Economists say that had wages kept up with the 
rising cost of living, that minimum wage today would be $20.65 
an hour. So I am coming out of public housing, I am concerned 
about everyday human beings who are losing their jobs and 
suffering and now have the opportunity to get a job doing 
weatherization. And they are doing it in my district, so it is 
not like a phantom job.
    Thank you, Mr. Chairman.
    The Chairman. The gentleman's time has expired. The Chair 
recognizes the gentlelady from West Virginia, Mrs. Capito.
    Mrs. Capito. Thank you, Mr. Chairman. I thank the witnesses 
here today. Just for bit of a background, I represent the State 
of West Virginia, which we know is a very energy rich State in 
natural resources. Since the stimulus bill was passed our 
unemployment has gone from, in January of 2009, 6.7 to up over 
10.5 percent and it is steadily climbing, a source of great 
concern for us in our State.
    I am interested on a couple of issues. First of all, the 
statement by Mr. Johnson that and, Mr. Gaynor, you may be able 
to help with this, that 80 percent of the dollars that went for 
wind production were for foreign companies that are 
manufacturing overseas. I noticed in your statement you said 
you buy your components from domestic manufacturing. Can you 
help me with that?
    Mr. Gaynor. We have historically, since we have been 
building our business we have historically bought turbines from 
General Electric and Clipper Wind Power, which are both 
domestic suppliers.
    Mrs. Capito. But the statement about, would you say 
generally speaking that most of the wind production jobs are in 
terms of making the actual turbines and stuff overseas, is that 
correct?
    Mr. Gaynor. AWEA has actually released some data that shows 
for all of the 1603 dollars, those projects I think were a 
total of 53 percent of the components, were actually sourced 
domestically.
    Mrs. Capito. So that 47 percent went overseas.
    The Chairman. Thirty-seven.
    Mr. Gaynor. The trend of where it was back in 2005 I think 
the number was 25 percent, and just anecdotally new wind power 
companies, Clipper is a good example, it is home grown here in 
the U.S., they have added manufacturing facility. Vestas, which 
is a large Danish manufacturer, has also made a very large 
manufacturing commitment in Colorado. So although the number, I 
think 53 percent is--it is true that means 47 percent is coming 
from overseas--I think the trend is certainly favorable.
    My view is one of the things that is making that happen is 
the Recovery Act.
    Mrs. Capito. I think that certainly in my State we are 
being told that we need to wean ourselves from fossil energy 
fuel production, and I wanted to ask from Mr. Ashley to in 
Norcross, Georgia, what is the energy, how do you generate your 
power in your manufacturing facility? How is it generated?
    Mr. Ashley. We buy our power from a local utility.
    Mrs. Capito. And how do they generate their power? Is it 
natural gas, coal, nuclear?
    Mr. Ashley. I believe it is a combination of coal, gas and 
nuclear. It is Georgia Power, which is owned by the Southern 
Company.
    Mrs. Capito. Disturbing in your testimony in my viewpoint 
is that you have opportunity for business expansion that you 
said you just saw 3 weeks ago in India, and you were unable to 
take advantage of that. If we are being told that we need to 
replace our fossil fuel jobs with green jobs and you can't 
expand your business and we are buying components from all 
around the world and not in the United States, how can we 
reasonably think that the replacement of coal miners and others 
is going to take place here in this country when obviously we 
are not competing well internationally. This is the question I 
have, that if we are going to have the green jobs in our 
country and our States that are going to be penalized under a 
cap-and-trade proposal, how are we going to attract these jobs 
into our States.
    Mr. Ashley. Well, I can't comment. I don't propose taking 
jobs away from coal miners at all. We need renewable energy 
because we need a combination of all energy sources to meet the 
world's needs, and that is here in the United States.
    Mrs. Capito. I couldn't agree more.
    Mr. Ashley. A 3-megawatt project that we are doing in India 
right now is bringing irrigation to people for the first time 
ever because of the locational flexibility of solar. It is not 
just about the U.S.
    The U.S. could do a heck of a lot more, especially in 
Georgia, but a lot of people have fought it so long. Look, we 
need power especially, peak shaving power, Congresslady. It is 
not taking jobs away from somebody. It is not a zero sum game, 
I don't believe.
    Mr. Gaynor. I would certainly add to that and echo the same 
sentiment. Where we are building wind farms we are not taking 
away jobs from people that operate nuclear plants or natural 
gas plants, hydro plants, solar plants. These are new jobs that 
are being created.
    And also from a wind perspective, wind is not the only 
solution, renewables are not the only solution. Nuclear, coal, 
clean coal especially, is all part of the solution. So I don't 
see them as replacing. It is not a zero sum game. It is 
additive. That has been our experience.
    Mrs. Capito. I agree. I do think this is where I think we 
are in agreement here. I would like to say even though I did 
not vote for the stimulus package, I in my district do have a 
very expansive clean coal carbon sequestration experimentation 
going on right now at the A P plant, the Mountaineer plant on 
the Ohio River, right across the river from you. So I am very 
hopeful this will result in the technology and in the 
investment that will give us that all-of-the-above energy plan 
so that we can expand our solar, expand our wind but still keep 
our baseload energy going.
    So thank you very much.
    The Chairman. Gentlelady's time has expired. The Chair 
recognizes the gentlelady from California, Ms. Speier.
    Ms. Speier. Thank you, Mr. Chairman.
    Mr. Johnson, in your exchange with Mr. Cleaver, you spoke 
about the tax credits or I should say the tax cuts that you 
supported, and I think it is really important when you speak up 
on this issue that you be knowledgeable. The actual ARRA 
funding, the largest amount of money in ARRA is for tax cuts. 
It is $288 billion in tax cuts. The next largest amount is $275 
billion which is, in fact, the money that is being distributed 
to try and create jobs. And then the third area is $224 
billion, which is unemployment benefits.
    Now do you not support extending unemployment benefits and 
COBRA benefits for people who are out of work?
    Mr. Johnson. No, I do not.
    Ms. Speier. So two-thirds of the recovery bill you support.
    Mr. Johnson. I support tax cuts when they are a stand-alone 
tax cut. If they are coupled with other measures the economic 
offset is far too great. The spending component of this bill 
completely skews the economy. These jobs would not be created. 
They are saying they are not taking jobs away from other people 
and, with all due respect, you need this money to create these 
jobs or the private sector would not create them on their own, 
which means they are not there yet.
    Ms. Speier. Thank you, Mr. Johnson. I would like to give an 
opportunity to all of the other participants on the panel to 
respond to Mr. Johnson's criticisms and of your specific 
programs, if you would.
    Mr. Ashley.
    Mr. Ashley. Yes, just last week we were voted by the Wall 
Street Journal, we were named Number 2 VC-backed company in 
renewable energy and this week we were ranked Number 15 in the 
Wall Street Journal's top 50. There are people wanting to give 
us money in the private sector as well, but we need help from 
the government right now to expand faster and quicker just 
because debt is in such terrible shape in this country. Solar 
is getting, because of efficiency work that companies like us 
are doing much, much, much, more competitive in the market. And 
the people that are the antagonists of solar constantly use old 
pricing. They misuse the technology. When they are making 
comparisons of thin films in solars they use one technology to 
represent all of solar in a particular situation. It has 
changed a lot, and it is very viable. It is getting more 
viable.
    But if we are serious about not letting the Chinese, the 
Taiwanese, and others own this industry, we need to do more 
here, just like they are doing. They think it is important. 
They are investing a heck of a lot of money. The rest of the 
world thinks it is important. We should, too. That is my point.
    Ms. Speier. A follow-up question, Mr. Ashley. When the 
Section 1603 program expires, are you going to be able to 
continue to finance and construct in your industry?
    Mr. Ashley. I believe so because of our worldwide demand, 
yes. I wish 1603 would continue to be expanded just to expand 
domestic demand for solar because it is good for the industry, 
et cetera, at this point in time. But the key right now is the 
financial situation that banks are in in lending, borrowing 
money, you can't get money. Even with a very positive scenario, 
the interest rates they want to charge you and the terms are 
very onerous and it is still very difficult.
    Ms. Speier. Thank you. Ms. Wright.
    Ms. Wright. Well, I think quite simply if you take a look 
at where we believe the transportation industry is going to go 
in an uncertain time frame, whether it is over the next 5 years 
or 50 years, there is an awful lot of risk and technological 
uncertainty around how we will transport ourselves around, and 
the fact is the United States does not have the infrastructure 
to be prepared to make that transition. Over the past several 
decades we have allowed our manufacturing base to erode, become 
a service economy. And frankly, while we are technology leaders 
we allow the countries around the world to implement it and 
commercialize it, and so from our perspective, one, we would 
not have been coming to the United States to do this. Two, we 
need to continue to expand our R&D and technological 
capabilities so that we cannot only catch up but start to lead. 
And that is risky. And private sector is not going to bear that 
cost all by itself. We are going to need strong collaboration 
with the government, and that is going to be skin in the game 
for private sector, skin in the game for the government as 
well.
    So from our perspective we are a for profit company and we 
are for allowing market forces to take their course, but there 
are unnatural events and disruptive events taking place that 
are going to change how we get ourselves around and we have to 
do it as a partnership.
    Ms. Speier. Ms. Patt-McDaniel, there were a lot of 
statistics that Mr. Johnson was spewing out that would suggest 
that weatherization is not working.
    Ms. Patt-McDaniel. Well, same as we weatherized over 8,100 
homes, and I would be the last person who has personally walked 
into those homes and seen the families who have benefited that 
this was not a worthwhile program. As far as Davis-Bacon, only 
30 percent of our agencies had to adjust their payroll, which 
meant that those jobs were well paying in the first place. So 
Davis-Bacon certainly hasn't hampered the program. The 
adjustments were not significant.
    And I think that I would be the last person also to say to 
the 1,000 men and women who were trained and are now working 
with a trade to weatherize homes shouldn't have had those 
programs and that we shouldn't have had the recovery money and 
that they shouldn't have had the opportunity to provide for 
their families.
    Ms. Speier. Thank you, Mr. Chairman. I see my time has 
expired. Mr. Gaynor may or may not have a comment.
    The Chairman. We have time. Go ahead.
    Mr. Gaynor. Thank you. From our perspective, if we take a 
long view on the policy of getting this country towards 
independent, more energy independent, then what the Recovery 
Act did in the short term is send a signal to the capital 
markets that the government is going to put some skin in the 
game, and that is certainly what happened. And I would argue 
that it was a crucial bridge that the government provided in 
the 1603. And from a long-term policy perspective, I think if 
you--again if we want to hit the energy independence targets 
and renewable energy targets you are going to need a policy 
that is sustainable and sends a signal to the capital markets, 
where most, if not all, of the money is going to come from over 
the long term, that the policies are there both at the Federal 
level and the State level. So that is certainly where we see 
the long-term play on the policy.
    The Chairman. Thank you. Gentlelady's time is expired.
    So, we had a great year in 2009. People were predicting 
that wind was going to just go right off a cliff, that we were 
going to drop from 8,400 new megawatts of electrical generation 
from wind in 2008 and because we were deep in a recession, 
because the economic climate was not good, that perhaps we 
could go down to only 4,000 megawatts of new winds that was 
generated in the United States. But then, because of the 
stimulus bill, we wound up producing 10,000 new megawatts of 
wind in the United States. And what a great story that is 
because just for people who aren't really familiar with this, 
that a nuclear power plant, 1,000 megawatt nuclear power plant, 
you think of a nuclear power plant that you might have heard 
of, Seabrook, Diablo Canyon, you name it, that is about 1,000 
megawatts, a nuclear power plant. Ten thousand new megawatts of 
wind installed in the United States in 2009 alone. It went up 
when everybody predicted it was going to be cut in half. And so 
that is a tremendous story because obviously that wind is in 
the United States of America. Those facilities will be going 
for a long, long time. And as we move to electrifying our 
automotive fleet, the electricity that we are putting into the 
vehicles will be generated here in the United States. We won't 
be importing oil from OPEC. We can tell OPEC we don't need 
their oil anymore than we need their sand because we are going 
to start generating the electricity for the all-electric 
vehicles, for the hybrid electric vehicles here in the United 
States. So that is a tremendous story.
    So let me go back over to you, Mr. Johnson, of the $787 
billion in the recovery package, $288 billion of the $787 
billion were tax cuts. So did you support the $288 billion 
worth of tax cuts?
    Mr. Johnson. I support tax cuts on their own, not when they 
are coupled with a massive government spending----
    The Chairman. But if we just made it a $288 billion tax 
break program you would support that?
    Mr. Johnson. Yes. Just the tax cuts.
    The Chairman. So your problem was when we started giving 
out, extending unemployment benefits?
    Mr. Johnson. I am opposed to unemployment insurance and 
massive government spending programs that tilt the market in 
favor of one sector over another.
    The Chairman. You didn't like the unemployment benefit 
extension in the bill.
    Mr. Johnson. I am opposed to the unemployment benefit 
extension, yes.
    The Chairman. And I think that is important. It is an 
honest position to have that you oppose unemployment benefits 
extension. We are going to try to strap Congressman Cleaver in 
over here, okay, as he is listening to this. And also the same 
thing is true for extension of health care benefits to people 
who have lost their health care benefits, you also don't 
believe that that is a good expenditure of Federal money as 
well, is that correct?
    Mr. Johnson. Yes, sir.
    The Chairman. Okay.
    Mr. Johnson. I do agree with that.
    The Chairman. That is a fair----
    Mr. Johnson. Unemployment insurance extension has been 
shown by several think tanks and organizations to prolong the 
unemployment process by making individuals more dependent on 
the Federal Government. And if I can address the statistics I 
was spewing on weatherization----
    The Chairman. Spewing?
    Mr. Johnson [continuing]. From the Office of Inspector 
General, a government agency, and they have a table right here 
and actually in California only .03 percent of units have been 
weatherized out of 43,400 that have been planned.
    The Chairman. I get it. But let me get back to you, Ms. 
Patt-McDaniel, how many new jobs did you create in Ohio in 2009 
from the weatherization project?
    Ms. Patt-McDaniel. One thousand. And that is as of 2009. We 
are still counting.
    The Chairman. That is great. So that is a lot of jobs, a 
lot of people who would not have been able to work.
    So let's move over to you, Mr. Ashley. That is a great 
story that the wind industry has, 10,000 new megawatts. And 
what is the projection for 2010, Mr. Gaynor, in the wind 
industry? Then we will come to you, Mr. Ashley.
    Mr. Gaynor. Certainly at least 10,000 new megawatts.
    The Chairman. At least 10,000 new megawatts?
    Mr. Gaynor. Certainly, from our perspective, we are 
building slightly less than we put online in 2009 but just ever 
so slightly, but the industry consensus is at least 10,000.
    The Chairman. So if we did 10,000 megawatts of wind every 
year between now and 2020, that would be 110,000 new megawatts 
of wind on top of the 35,000 megawatts that the United States 
already has, the 10,000 in 2009, the 8,400 in 2008 and then 
much smaller numbers in the preceding years, but that would 
wind up at 145,000 new megawatts of wind installed in the 
United States by the year 2020 and the entire nuclear industry 
after decades of subsidies from the Federal taxpayers only has 
100,000, has a total of 100,000 megawatts which is about 18 
percent of all electrical generating capacity.
    Is that a realistic goal for the wind industry.
    Mr. Gaynor. I certainly think that wind technology is 
improving. One of the things that everybody is concerned about 
is what is the price, what is the price of delivered wind? And 
I think with, when you, if you want to scale up to that level, 
doing 10,000 megawatts a year, increasing domestic 
manufacturing, you have to assume that with all of that 
additional capacity that will be built in the U.S. that the 
price per unit will come down, making wind a lot more 
competitive. So if that is certainly true, then you could see 
that the growth could sustain itself.
    The Chairman. Let me go back to the point that I heard you 
make in your testimony, which was that 4 years ago only 25 
percent of the components of a wind turbine were made in the 
United States, and in 2009, after the stimulus bill, the 
recovery package passed, it zoomed up to over 50 percent of the 
component parts of a wind turbine were made in the United 
States, is that correct?
    Mr. Gaynor. That is correct.
    The Chairman. That is a huge turnaround.
    Mr. Gaynor. Those are the statistics from AWEA based on all 
the 1603 projects, and again we would expect that to continue 
as if you are going to keep adding megawatts, wind turbines are 
big, they are difficult to transport so having them made 
locally makes a lot more sense.
    The Chairman. That sounds great. So you are saying during 
the Bush administration 25 percent of wind turbine component 
parts were made in the United States. During the Obama 
administration the percentage doubled to over 50 percent. So 
that is a huge shift from the Bush administration, which was 
clearly allowing for these component parts to be built 
overseas, that we had to import them from other countries. And 
clearly the Bush administration was just turning a blind eye to 
this incredible drain of revenue. But under the Obama position, 
we now see a dramatic increase in domestic production. We see a 
capacity being built here in our country and a turnaround from 
this Bush administration era perspective that had us importing 
oil from OPEC.
    In fact, President Bush was over there asking the Saudis to 
please produce a couple more million barrels of oil a day in 
April of 2008, even as the wind turbines that we were 
installing in our country were being imported from other 
countries as well. What a disastrous policy for our country.
    So now with this installation of new renewable energy 
resources in our country we see more domestic production, we 
actually see the jobs being created here in our country, and we 
are seeing a reduction actually in the importation of oil in 
our country. All of it great, especially with these new battery 
technologies that Ms. Wright and Johnson Control are beginning 
to manufacture here in our country which will make it possible 
for us to have these all-electric vehicles.
    Mr. Gaynor.
    Mr. Gaynor. I agree with the statements. One other point to 
make is that, again, in order to hit these saturation levels in 
wind, battery technology is going to be a piece of that 
technical pie as well. And as I mentioned in my comments, we 
were awarded a conditional commitment from the DOE for one of 
our projects in Hawaii that we are building this year. It is a 
wind farm on the north shore of Oahu coupled with a battery 
energy storage system that is actually made by a domestic 
manufacturer called eStream Power.
    The Chairman. By the way, in the Waxman-Markey bill, just 
for the record, we actually included $60 to $100 billion for 
carbon capture and sequestration technology for the coal 
industry. But of course Peabody Coal is leading the opposition 
to that bill. Peabody Coal. So it is not like we are not trying 
to help the coal industry. We are. But Peabody Coal doesn't 
want any part of our comprehensive bill to deal with the issue 
and so as a result we are not going to stop helping the 
industries that want to move forward. But we are not going to 
allow them, at the same time, the Peabody Coals of the world to 
say, don't make any progress at all on any front. We can't 
block--because we can't make progress on all fronts doesn't 
mean that we can't make progress on any front.
    So let me come back to you, Mr. Ashley. Could you give us a 
little update on the solar industry, how many new megawatts 
were installed in the United States in 2009?
    Mr. Ashley. Mr. Chairman, I have seen several figures. 
Between 450 and 480 megawatts.
    The Chairman. Do you know how many were installed in the 
United States in 2008?
    Mr. Ashley. Much less than that. I believe less than 300 
megawatts.
    The Chairman. So nearly a doubling of solar----
    Mr. Ashley. Substantial increase.
    The Chairman. Of solar installation in the United States, 
so almost as you are saying, it is like half of the nuclear 
power plant was installed in solar in the United States in 
2009.
    Mr. Ashley. Yes, sir, in our industry association the 
latest numbers look like probably around 10,000 direct, 
indirect and induced jobs in solar in 2009, thanks to the 1603 
provisions, and 60 percent are----
    The Chairman. Now when you say 1603 no one knows what you 
are talking about. They are trying to think of something famous 
that happened in history and they don't remember getting the 
right answer in the 6th grade, so people have no idea what you 
are talking about. What is 1603? What would be a good, give us 
another title for 1603 so that people would understand? Explain 
to your mother why this is so important. How would you explain 
it to her?
    Mr. Ashley. It is taking a tax credit, which is a very good 
idea, and making it better because----
    The Chairman. What would you call the program? Don't use 
the word tax credit.
    Mr. Ashley. Solar incentive.
    The Chairman. Solar incentive program, yeah, and so with a 
solar incentive program we were able to double the amount of 
solar in 1 year, produced here in the United States, creating 
upwards of 10,000 jobs?
    Mr. Ashley. Yes, sir, that is correct. And I think going 
forward it will also be important to develop the domestic 
industry because even some of the foreign, my competitors that 
are foreign, will come here and build plants if the industry is 
big enough. I don't like that, but it is good healthy 
competition. Because I tell you Malaysia and China will give me 
a lot of money and a lot of grants to come build a plant like 
the one in Saginaw, Michigan.
    The Chairman. So what percent of solar new jobs were 
created here in the United States as part of the Obama stimulus 
plan? Do you know?
    Mr. Ashley. I believe the job numbers that I just 
mentioned.
    The Chairman. So a very high percentage of all the new jobs 
that were created in the solar area were here in the United 
States?
    Mr. Ashley. Yes. And to be fair, going back to the initial 
stimulus bill in December of 2008 when the tax credit was 
extended for 3 years or several years, et cetera, from that 
point forward and then when the Obama administration came in it 
really gave the industry a shot in the arm and the confidence 
to expand.
    The Chairman. So what I am hearing is that there is a 
massive reindustrialization of the United States going on, that 
we have moved under the Bush era with only 25 percent of wind 
jobs here in the United States, and we import 75 percent, to 
now it is over 50 percent of the wind jobs are here in the 
United States, and the percentage keeps going up, as almost 
each month goes by. I think the ultimate goal is that 70 
percent of all of the wind jobs will be here in the United 
States by the time the Obama stimulus package is completed, and 
that is a big good news story because people are wondering 
where are the jobs for the next generation going to come from? 
What is the next new industry in our country?
    So what we are hearing from Mr. Ashley and Mr. Gaynor and 
Ms. Wright are huge good news stories in terms of jobs here for 
Americans.
    And Mr. Johnson seems to support using tax credits to 
accomplish these goals. He hasn't voiced any opposition to tax 
credits creating these incentives. So here we have a huge area 
of agreement, and an agreement--do you agree, Mr. Johnson, that 
at least in these areas that the tax breaks are working and we 
are creating these jobs that are helping to put people back to 
work in our own country?
    Mr. Johnson. Tax cuts generally tend to do that, yes, Mr. 
Chairman.
    The Chairman. That is great. So from the perspective of the 
billions of dollars that are going to be spent in wind and 
solar and batteries and other programs, that is good. You agree 
with that?
    Mr. Johnson. Tax credits that stimulate the economy and 
create jobs are good.
    The Chairman. That is great. So that is a big success story 
for us. And we do understand that you don't like spending 
Federal dollars on unemployment insurance for unemployed 
Americans, but what we are trying to, as you can probably 
appreciate, is we don't like paying unemployment benefits 
either. We actually hate the idea of unemployment benefits if 
people can have a job. So we are trying to create the jobs over 
here that could then make it unnecessary for people to have to 
go in and to actually apply for unemployment benefits.
    The evidence that we actually have that people don't like 
to collect unemployment benefits is that when unemployment went 
down to 4 percent in our country, all the people who are now 
unemployed actually took jobs and worked in them. But when jobs 
are not available, unfortunately and much to their own personal 
chagrin, they are forced to go in to accept unemployment 
benefits. But we have evidence that every single ethnic group 
in the United States, whites, blacks, Asians, Hispanics, and 
male and female, all take jobs when they are available to them. 
But unfortunately, because of a recession induced by reckless 
mismanagement of the financial marketplace during the Bush 
administration, almost turning a blind eye to an oncoming 
economic disaster, we have seen a tremendously high rate of 
unemployment. So that is the conundrum that we face because we 
don't--the reason we don't want to pay unemployment benefits is 
that we hate to see people unemployed. But we recognize the 
moral necessity of helping people in those times of 
desperation. These kinds of programs are working and working 
very successfully.
    Let me turn back to the gentleman from Missouri to see if 
he has any additional points he might want to make.
    Mr. Cleaver. One point and then a question. Having grown up 
in public housing around poor people, I grew up hearing that 
people had babies so they could get $190 a month welfare and 
that people didn't work. My father worked on three jobs. He 
cleaned up the T.A. Litikan building on Saturday mornings, 
worked at the Wichita Club as a maitre d', and then did yards 
on the weekends and sent four kids through college. I can 
remember my father being unemployed, one of the most miserable 
times of my life seeing him almost in a depression. But the 
question related to what I have just said is do you know how we 
know that, how we determine whether or not people get 
unemployment compensation? Mr. Johnson, do you know how we find 
out whether or not they get unemployment?
    Mr. Johnson. Not off the top of my head.
    Mr. Cleaver. Yes. And that is why this is important, I 
think, because you said you thought it was a disincentive for 
people to get jobs. The only people who can get unemployment 
checks are the people looking for jobs. You have to go to the 
State Unemployment Bureau seeking a job to get unemployment 
compensation. So it is not a disincentive. The only people who 
get this are out struggling trying to find jobs. And as the 
chairman mentioned, they are not--8.4 million jobs, when you 
say disincentive, I just want to make sure you know that you 
have to look for a job to get the money.
    So you don't think it is a disincentive now, do you?
    Mr. Johnson. I still think it is. I have read several 
studies specifically from James Sherk, an economist at the 
Heritage Foundation, that say several things to the contrary of 
what you just stated, that it actually helps prolong 
individuals not find finding work because they are satisfied by 
having----
    Mr. Cleaver. But you didn't know that you couldn't get 
that. You just said you didn't know.
    Mr. Johnson. I didn't know off the top of my head. I had 
heard that.
    Mr. Cleaver. But now that you know, does that fact--you 
can't contradict that fact. It is a fact. So knowing that fact, 
do you now change?
    Mr. Johnson. It is also a fact that since the stimulus 
package has been signed into law we have lost 3.3 million jobs. 
I am glad these individuals here are creating jobs. And the 
Ohio weatherization program is a huge success. I will grant 
them that. The Inspector General report even recognizes it as a 
success. But it is one of the only States having success with 
this program.
    There are individual success stories everywhere. But the 
package as a whole and the reality is the jobs have not been 
created since the stimulus package and that was its goal, to 
create jobs. More work has been created for certain individuals 
who have jobs, but the overall jobs impact has not 
materialized.
    Mr. Cleaver. So now that you know that the fact that you 
have to be looking for a job to get an unemployment check, now 
that you know that to be a fact, it is unquestionable, if 
anybody in here can contradict it, you are saying you still 
believe that it is a disincentive?
    Mr. Johnson. I oppose extending unemployment insurance 
benefits, yes.
    Mr. Cleaver. But will you continue to say it is a 
disincentive to provide those benefits?
    Mr. Johnson. Until I see empirical data otherwise, based on 
what I have read and learned in the past, yes.
    Mr. Cleaver. So you don't believe what I was just saying, 
that you have to be--
    Mr. Johnson. I would be very interested to see empirical 
data supporting what you are saying.
    Mr. Cleaver. That you have to be--how do you think you get 
the checks, people get checks?
    Mr. Johnson. I am speaking of the disincentive issue. I 
have read reports that showed that it was a disincentive and it 
did disincentivize based on surveys, reports, et cetera.
    Mr. Cleaver. Okay, we are talking past each other. And when 
somebody makes a good point I always say, well, you made a good 
point. But since we can't do that, I appreciate very much you 
coming.
    One of the persons I spend a lot of time with here is a 
Republican, and we absolutely have nothing in common with 
regard to our political views. We just like each other, and so 
we can argue and not get angry and still sit down and have 
lunch. The one thing I guess we don't do, which is why we have 
a relationship, is because when he can prove something, I say, 
okay, and the same on the other side.
    So I guess my frustration is that if you can get anybody--I 
will wait here. Somebody call Heritage to find out if I made up 
the fact that that is the only way you can get your check, is 
looking for a job. I just--when you go out and say it is a 
disincentive and people don't know any differently, they then 
begin to embrace the beliefs that there are some people who are 
just lazy sitting around taking tax dollars. And I grew up in a 
situation like that, seeing it and hearing it, and it is really 
an insult to a got lot of good, hardworking Americans.
    So I do appreciate your being here and I appreciate your 
passion and hope that you will check my fact down there and 
send me an email apologizing. Thank you.
    Mr. Johnson. Thank you.
    The Chairman. So, have you had--when you create these new 
jobs in solar or wind and weatherization, do you find that 
there are a lot of people who want to work as soon as you 
announce there are new jobs available? Do you have any problem 
finding people who want to work as soon as you put out an ad 
for new employees, Mr. Gaynor?
    Mr. Gaynor. No, we have not had problems. Just to give you 
one example, we have a small summer internship program. We 
received 10 times the number of resumes. For 10 jobs, we 
received 100 resumes.
    The Chairman. You get 10 times the applications for new 
jobs as the number of new jobs you have.
    Mr. Gaynor. For our summer internship program.
    The Chairman. Have you had any problem, Ms. Patt-McDaniel, 
finding people to work?
    Ms. Patt-McDaniel. No. We have people fighting to get into 
our weatherization training programs to get jobs; and the 
payment received is not family sustaining wages, by any 
stretch.
    The Chairman. Ms. Wright, do you have trouble at Johnson 
Controls finding people who want to work when you advertise for 
new employees?
    Ms. Wright. We are very fortunate to have a skilled 
automotive workforce in the area where our plant is located, so 
we are very fortunate to be able to reemploy them.
    The Chairman. People who got laid off when the auto 
industry collapsed and who were forced to accept unemployment 
benefits, as soon as you advertised saying you can come back to 
work they are on your doorstep?
    Ms. Wright. We have very, very highly skilled, experienced 
workers.
    The Chairman. Beautiful. That is great news. Some people 
believe that people enjoy being unemployed. I think there is 
sufficient evidence that that is not the case when a job is 
offered.
    Mr. Ashley, how about you? Do you find a lot of people?
    Mr. Ashley. We had 600 applications for the last 30 jobs. A 
lot of people are desperate.
    The Chairman. I agree with you. And, unfortunately, 570 
people perhaps had to stay on unemployment, but you were able 
to help 30 people get meaningful employment. That is 
tremendous.
    So here is the good news. You want to see a really good 
news story? Here is the picture of jobs lost in the United 
States, and this is the Bush administration over here in red. 
And as we reached January 20, 2009--we remember that day quite 
vividly, January 20, 2009--780,000 jobs were lost in January of 
2009.
    As you can see, following on a pattern of the preceding 
months of the Bush administration in terms of this failed 
economic policy--kind of, if you don't answer calls at the SEC, 
there is a guy named Madoff that might be bilking people, if 
you don't regulate derivatives or swaps, you kind of turned a 
blind eye to the whole impact that that could have, and many 
other things--780,000 jobs in the month before, 700,000 the 
month before, 720,000, really not a good picture, month after 
month.
    Then, in February of 2009, the Obama administration arrives 
with a stimulus package. You can't turn around the Queen Mary 
overnight. But look what happened in the months since then 
coming up to February. We almost have a reverse image of what 
was happening during the Bush administration. Month after 
month, we see fewer and fewer jobs being lost in our economy. 
For one month there, November, it actually went positive. We 
actually had job creation. And now we are going down to a point 
where it is no more than 20, 30, 40,000 jobs that we are losing 
per month. So you can see it is highly likely that this is 
going to start spiking up with new job creation in our country.
    Now, I would like to think that this economic plan of the 
President is working, that the stimulus bill is working, that 
the tax breaks are working, and that we are turning a corner 
and that the Obama plan is the antidote to the Bush plan, two 
different plans about how to run the economy.
    Now we didn't cause the accident. We are out in the street 
trying to clean it up. Some people start to blame us for trying 
to clean up the accident, all that blood in our economy. So, 
after a year, some people start to basically confuse the people 
cleaning up after the accident with the people who created it. 
And that is one of our problems. We admit that. But it is a 
political problem from a messaging perspective, not an economic 
problem from the perspective of how it is working.
    And so what we are seeing in the testimony we are hearing 
today from our witnesses is the incredible success of the 
stimulus bill. And if I could ask you, do you think 2010, Mr. 
Ashley, will be better than 2009 for the solar industry?
    Mr. Ashley. Yes, sir, I do. And, like I said, we are sold 
out through mid 2011.
    The Chairman. You are sold out now. That is fantastic. 
Where would you be without the stimulus bill?
    Mr. Ashley. We would not be in that situation.
    The Chairman. You would not be.
    Mr. Gaynor, what does 2010 look like for you?
    Mr. Gaynor. 2010 we expect to build 300 megawatts of 
capacity this year, seven wind farms, one of them we are just 
wrapping up.
    The Chairman. Where would you be without the stimulus plan?
    Mr. Gaynor. It would be a much different picture.
    The Chairman. Would it be a better picture?
    Mr. Gaynor. No, it would not be a much better picture. It 
would be worse. Tough to quantify, but, again, the thing that 
is important for our business is in a capital-intensive 
business you are taking--what the Recovery Act is doing is not 
only getting those dollars but you are taking a lot of dollars 
in the private sector and pulling it off the sidelines to come 
in and build wind farms.
    The Chairman. So venture capitalists, other investors, they 
are on the sidelines. They are saying, oh, my goodness, look at 
all that blood in the economy; look at all that red. But all of 
a sudden, in 2009, with the stimulus bill, they are saying, 
maybe it is safe again; maybe we can go back into those 
economic waters. And if there is going to be some Federal money 
perhaps--and how many new private-sector dollars were you able 
to attract in 2009?
    Mr. Gaynor. Seven hundred million dollars.
    The Chairman. Seven hundred million dollars just for your 
one company. Amazing. That is a huge amount of money.
    Mr. Gaynor. For the 1603 project----
    The Chairman. Under the what project?
    Mr. Gaynor. The wind stimulus.
    The Chairman. The wind stimulus bill attracted--
unbelievable, just for your one company. That is fantastic.
    And, Ms. Wright, over here, in your battery company, how 
many new jobs would you have created in the United States in 
2009 and 2010 without the stimulus program?
    Ms. Wright. Very few.
    The Chairman. By ``very few'', what do you mean by that?
    Ms. Wright. Potentially some engineers in our Milwaukee----
    The Chairman. When you say ``some'', are you talking about 
hundreds?
    Ms. Wright. No, a handful.
    The Chairman. What is a handful? Is that a handful? Five 
people maybe? Now, because of the stimulus bill how many do you 
think you will be creating?
    Ms. Wright. We will be hiring engineers and scientists in 
Wisconsin as we have----
    The Chairman. Give us some numbers. People want to hear 
good news. People want to have hope that this economic recovery 
is going to continue and the stimulus bill is working. So how 
many new people do you think will get hired?
    Ms. Wright. If you will indulge me for a moment, the full 
capacity our plants in Holland will employ 550 people----
    The Chairman. Your plant is where?
    Ms. Wright. Holland, Michigan.
    The Chairman. Holland, Michigan. People think Holland is in 
Europe. No, Holland is in Michigan. So how many employees will 
you have in Holland, Michigan?
    Ms. Wright. At full capacity, it will be 550, not to 
mention the supplier and the indirect jobs. In Milwaukee, we 
will continue to hire engineers and scientists to support our 
technology.
    The Chairman. Wow. So, without the stimulus bill, a 
handful, five; with the stimulus bill, 500 and more people who 
will be working who otherwise would not be working here in the 
United States. And you wouldn't even be building a plant in the 
United States, is that you what you told us?
    Ms. Wright. Correct.
    The Chairman. You would be building it perhaps in Holland, 
Europe, is that right?
    Ms. Wright. In the Netherlands, Holland, somewhere in 
Europe or Asia, that is correct.
    The Chairman. So that wouldn't be good news for American 
workers.
    So this is really a fantastic good news story for our 
country. And this energy sector just might be the brightest of 
all the bright spots in the recovery bill because it gives hope 
to families that there is going to be a source of new jobs, 
from Mr. Cleaver and the smart grid they are building in the 
most economically challenged part of Kansas City, through 
Georgia with Mr. Ashley, and Mr. Gaynor's company that sprawls 
all across our country, Utah, Maine, and States all across the 
our great country. Ms. Wright is in Wisconsin and in Michigan 
with her new job creation.
    Ms. Patt-McDaniel in Ohio with 1,000 people out there 
weatherizing homes in 2009, but many more in 2010--is that 
correct--will be out there? And you can't offshore weatherizing 
jobs. You have got to be there in Ohio, you have to be in 
Akron, you have to be in Canton. If you are not there, it is 
not going to get weatherized. So those are, by definition, 
domestic jobs.
    So these are engineers, carpenters, laborers, scientists. 
It is across the entire economic spectrum of our country, the 
people who are benefiting. So that is really great news.
    And it helps us to reduce--and here is where we will share 
our agreement with Mr. Johnson. It will reduce the unemployment 
benefits that we have to pay out of our taxpayers' dollars for 
people in our country, and that is one thing we really do hope 
to achieve.
    Mr. Cleaver, do you have anything you would like to add 
here?
    Mr. Cleaver. You said it all, Mr. Chairman.
    The Chairman. I thank you. Do you want to say it again?
    I think we are just trying to make a point here. You know, 
a lot of people, they don't like--they didn't like statistics 
in school, which is why they didn't take the course. But a 
graph like this speaks for itself.
    It is the end of the Bush administration, the beginning of 
the Obama administration, just two different plans. In one, we 
were about to go off a cliff here with red ink for our country, 
people unemployed, 780,000 new people unemployed. You come 
forward 1 year, we are down 22,000 people who newly entered 
into the unemployment rates. What an incredible change, more 
than three-quarters of a million people fewer who were 
unemployed this past month than the last month of the Bush 
administration.
    And so this energy sector is something that we are not 
going to walk away from. Your stories today really give us hope 
for the future. They really make us believe that we have a 
chance to create a new industrial sector in our country, to 
back out imported oil, to not replace ``made by OPEC'' with 
``made in China'' without ever having a ``made in the USA'' 
energy strategy. What you represent is that alternative, the 
``made in the USA'' strategy. We have used tax benefits, loan 
guarantees in the stimulus bill in order to accomplish that 
goal; and your story is tremendous.
    So here is what I will do. I will give each one of you 1 
minute to give us the one thought that you want us to remember, 
1 minute apiece without using 1603 or the words tax credits. 
Try to put it in the simplest possible form for the American 
people so they can understand what has happened over the last 
year and what you want to see continue.
    So we will go in reverse order; and we will begin with you 
Mr. Johnson.
    Mr. Johnson. First, I want to thank the chairman and the 
members for allowing me to come here today.
    I think in order to create real job growth, we need to 
consider freezing all proposed tax increases and costly 
regulations until unemployment falls at least below 7 percent, 
freezing spending and restricting unspent stimulus funds, 
reforming regulations to reduce unnecessary business costs such 
as reforming Sarbanes-Oxley, reforming the tort system to lower 
costs and uncertainty facing new businesses, remove barriers to 
domestic energy production in Alaska and the Outer Continental 
Shelf, completely repeal the job-killing Davis-Bacon Act, pass 
pending free trade agreements with South Korea, Colombia, and 
Panama, and reduce taxes on companies' foreign earnings if they 
bring those earnings home.
    I think those are all sustainable, and we need to 
incorporate in all of the above energy approach working with 
the individuals here today. And I thank you very much for 
having me.
    The Chairman. Thank you.
    Mr. Ashley.
    Mr. Ashley. Thank you, Mr. Chairman; and, again, I am proud 
to be here before the committee today.
    The key thing I would like to leave you with is please 
continue to help us build this renewable energy resource, an 
economy here in the United States rather than abroad. Many of 
the countries are very serious about this industry. They want 
to own this industry. We want the jobs to stay here in the U.S.
    We want to be competitive in the rest of the world. 
Programs like the Ex-Im Bank, and they are wonderful, offer 
facilities which we have also used, and others are helping a 
lot and DOE loan guarantees. But the stimulus that you started 
and you are doing is really helping us, and it will make a big 
difference for jobs and I think the security of this country 
going forward.
    The Chairman. Thank you, Mr. Ashley.
    Ms. Wright.
    Ms. Wright. Thank you very much, Mr. Markey and committee 
members. Because of your actions, we have made a commitment to 
be here in the United States versus being somewhere else; and 
we have also made a commitment to stand up the industry and the 
entire value chain so we can drive domestic capability and 
competency.
    We need your help in creating the demands. So, for short 
term, while the market is sorting itself out, we can drive 
scale, drive the economics so we can employ these people and we 
can employ them sustainably and stand on our own without 
subsidies and without incentives. Because that is how we want 
it to work. But I would implore you to help us make sure that 
we leverage these investments that the U.S. Government and the 
U.S. taxpayers have made and the faith they have put in us and 
make sure we leverage those vehicles and that demand with the 
components and the systems that were made from those tax 
dollars here in the United States so that we do have a U.S. 
battery cartel, not Asian battery cartel.
    The Chairman. I love it. Thank you.
    Ms. Patt-McDaniel.
    Ms. Patt-McDaniel. I want to say that Ohio is very happy to 
make use of our Recovery Act funds. I already talked about our 
weatherization. We are using our other energy dollars to invest 
in the growth of those industries.
    For example, in our wind supply chain, we have 600 
companies who are providing parts to turbines and are also 
creating jobs. We continue to use that money to incent industry 
and leverage more growth and job creation.
    I really appreciate the opportunity to speak, and we would 
like to have additional assistance from the Federal Government 
to continue to grow those jobs in Ohio.
    The Chairman. Beautiful. Thank you.
    Mr. Gaynor.
    Mr. Gaynor. Thank you, Mr. Chairman; and I also want to 
extend my thanks for allowing me to testify here today.
    We are just at the beginning. We have got a long, long way 
to go; and I would encourage he Congress to continue to send 
those strong policy signals to the private sector. Over the 
long term, that is probably a Federal renewable energy 
standard. In the short term, as the financial crisis and the 
financial markets continue to heal, could be an extension of 
the convertible ITC.
    So those are my parting thoughts. Thank you very much.
    The Chairman. We thank you so much.
    And I know everyone watching C-SPAN wants to learn more 
about a convertible ITC. But I understand what you are saying. 
But our job is to put it into English. So what we will do is we 
will pass a renewable electricity standard for the United 
States. So we have a goal of 15 percent, 20 percent of all 
electricity generated from renewables because, by definition, 
they are here in America. We have to use our own energy 
resources to do that. And we will put the tax breaks, we will 
put the loan guarantees in place so that the private sector 
will step up and create this engine of growth in our own 
country, creating ultimately hundreds of thousands of new jobs 
just in this energy sector alone and, again, meeting the 
challenge of importing too much oil from OPEC and trying to 
avoid a situation where we are importing our batteries, our 
solar, and our wind technologies from China. We have to avoid 
it.
    We need a plan. America is at its best when it has a plan, 
and the Obama administration has begun to put together that 
plan. We see the early results, which are fantastic; and we are 
now going to work to expand upon it this year and next.
    We thank you all for testifying here today.
    [Whereupon, at 11:30 a.m., the committee was adjourned.]

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