Jon Powers (00:02):

Welcome back to Experts Only. I’m your host, Jon Powers. I’m the co-founder of Clean Capital and serve as President Obama’s chief sustainability officer. On this podcast, we explore solutions to climate change by talking to industry leaders about the intersection of energy, innovation and finance. You can get more episodes@cleancapital.com.

Jon Powers (00:29):

Happy New Year and welcome back to Experts Only. I’m your host, Jon Powers. Today we’re talking with Rob Diamond, who’s a return guest. Folks that don’t remember Rob, he and I had worked together in the Obama administration and he’s been really doing an amazing job building an infrastructure practice to help people understand both the bipartisan infrastructure bill as well as the IRA and how to access those dollars and get them moving into your community. So Rob and I are going to talk about where we are today in terms of the implementation of these generational pieces of legislation. As always, you can get more episodes@cleancapital.com. We’re looking for ideas and who we should be chatting with this year. So please let us know what the conversations we should be talking about to help drive the energy transition. Thanks so much and I hope you enjoy the chat. Rob, welcome back to Experts Only.

Rob Diamond (01:15):

Thanks, Jon. Great to see you and happy New Year.

Jon Powers (01:18):

Yeah, happy New Year. When you and I set up this conversation, we wanted to talk about the progress that’s being made around the monumental legislation, that’s the bipartisan infrastructure bill and the Inflation Reduction Act, but before doing that for listeners, you’ve been on this show before, Rob and I know each other from previous lives in Washington where we worked together both in the Obama administration. Rob is an Annapolis grad, a naval officer, and has really gone on to build quite a private practice. He now is at Capital Council and is helping to lead organizations, nonprofits, cities, and others to understand and engage on this legislation. Rob, do you want to talk a little bit about your day-to-Day work at Capital Council?

Rob Diamond (02:02):

Yeah, thanks Jon and appreciate you having me back. It’s great to be on the podcast again. Glad I didn’t ruin it the first time. I’ll say anyone,

Jon Powers (02:14):

Listen, Rob, I’m just saying you’re back.

Rob Diamond (02:17):

Not sure how many people get invited back, but I feel honored. Not many. Not many, and appreciate the introduction and again, for listeners, Rob Diamond, I’m a partner at Capital Council. We’re a full service bipartisan lobbying and advocacy firm in Washington dc. We’ve been around about 17 years and I lead our executive branch practice and our infrastructure implementation group. And so my day-to-day focus is on the Biden administration and then in particular, as we saw two years ago now, just as you mentioned, the monumental impact and scale of both the infrastructure bill and then the Inflation Reduction Act and then the CHIPS Act and go all the way back to the American Rescue Plan. I mean just really monumental and gargantuan pieces of legislation. We saw the need instantaneously to help clients navigate these laws and to your point, across the full spectrum from cities and states and counties to nonprofits to private sector entities, these touch all of them and there are enormous opportunities and challenges for all of those entities as well. And so we’ve been very focused on those now going into year three of the infrastructure law and although the IRA was passed in 2022, many ways, it’s just still the first inning of the implementation of that law. So a lot of opportunity ahead, a lot of challenges ahead, and it’s a critical time for folks to be staying engaged and if they haven’t been engaged to be engaged on these topics. Now

Jon Powers (04:13):

For folks that are outside of the Washington bubble, may not pay attention to some of the conversations that are happening as closely as you and I do. I usually end this podcast by looking forward to 2030 and then looking back to how what we’re doing today will progress. I want to start the conversation that way though. And if we look forward to say 2030 and look back at the fact that as you said, these monumental pieces of legislation, I think you correctly added the CHIPS Act in there. I think folks may not fully understand the impact that’s going to have on US manufacturing and some other really key drivers for the economy. What will this marriage of bills do to sort of revamp the clean energy transition, climate change or economy? How are they going to help drive change across the ecosystem?

Rob Diamond (05:04):

Yeah, it’s a great sort of step back to take that long view and recognize that this is a, for the first time in nearly 50 years, you have the federal government really changing the industrial policy of the country, and that’s in regards to both how we produce and consume energy. The federal government really incentivizing and accelerating the transition to electrification and then the re onshoring of American manufacturing, and that’s both really in the energy sector and we mentioned the CHIPS act. I know it’s a little tangential to this conversation, but really the onshoring of the semiconductor industry and so

Jon Powers (06:01):

It towards the energy industry for sure,

Rob Diamond (06:03):

For sure, and the national security of the country. And so at a very macro level, you have this sea change in the industrial policy of the country, and I think it’s really important to recognize what’s going on and the inherent opportunities within that, and then certainly with something that large and with that much change coming back quickly, all the challenges that are associated with it. So I think when you look towards 2030, and there’s a lot to play within that, obviously, I’m sure we’ll talk a little bit about impacts in changes in congress and changes in administrations, but were this glide slope to continue. You’re going to be looking at a fundamentally different country or are we all driving electric vehicles and has the gas turbine engine gone away and by 2030, how many vehicles are we selling? Where are we on producing a domestic battery supply chain and critical minerals and a new electric grid, universal broadband access and just all of these big opportunities that really will I think, change the way we live and work and learn and play every day when they really mature over the next five to six years.

Jon Powers (07:41):

Yeah, I mean it’s a true investment in the future of the country if it’s executed appropriately. Just to do a little recap on the infrastructure bill versus the ira, for folks that may not remember as clearly, if you go back to the politics for a second, the infrastructure bill was a compilation of things that could be agreed upon by both Republicans and Democrats that were major investments in our infrastructure, which we needed to get done. There were certain components of that that was really truly a target list of things that could help drive both action on climate. The clean energy transition, which obviously had a lot of forceful pushback by status quo groups like fossil fuel industries and others, and then the IRA was a separate piece of legislation that ended up getting truly passed because of Senator Manchin and Joe Biden were able to come to an agreement and get that 51st vote maybe. Is that the best way to put it and get it done on what’s in those two that are different, and then how do they compliment each other?

Rob Diamond (08:50):

Yeah, sure. I think we all know that for years, if not decades, multiple congresses and multiple administrations have tried to pass large scale infrastructure investments. It’s been infrastructure weak for a long time in Washington DC it became a running joke, but in 2021, the Congress and the Biden administration were successful in passing nearly a trillion dollar infrastructure, a bipartisan package at the end of the day, and it really think roads and bridges and rail and broadband and water and a big piece on the energy grid. And so truly a historic bipartisan piece of legislation that’s making a generational investment into our airports and our ports and our bridges and our roads, et cetera. We’re now in the third year of that law, which was a five year piece of legislation, but the programs were authorized and appropriated over a five year cycle. And so we’ve got two years of the infrastructure law under our belts. The agencies have been implementing those programs and spending down that money over the last two years. And now we’re the start in 2024 of a third year of,

Jon Powers (10:28):

Can I pause you for a second there, Rob? Just to paint a picture for folks that are not as close to it as you are every day when this bill passed, the administration put out a bit of a playbook and how it was going to get done, your end of bureaucracy, all of a sudden you’re tasked with deploying billions of dollars in some cases, trillions total, and understanding how to execute on that. The first year of that was really riding the ship and figuring out the rules. Was year two getting the programs moving and now we’re really in execution mode where dollars are flowing and grants are moving and et cetera?

Rob Diamond (11:02):

Yeah, it’s hard to, it really goes program by program, I mean an agency by agency because this involves hundreds of programs across dozens of federal agencies. And when you take a look at the individual program, for example, the Department of Energy had to be, is an entirely different entity today than it existed just two years ago and really reorganized itself around the infrastructure law to implement 60 billion of funding. And so in an instance like that, and the Department of Transportation, another good example where they had to stand up dozens of new programs year one was very much the federal government itself getting up to speed to implement the law. Year two, the first time you had a really mature funding cycle and all the programs up to speed and all the guidance out. And now here we are 20, 24 and year three again of five in those cases of those programs issuing those windows. And I want to make a point on infrastructure, two thirds of the spending on the infrastructure law is actually moves by block grant, which is just sort of gate chunks of money that flows from the federal government to the states directly, and then it becomes the purview of the state governments, how they spend those investments. But a third of the infrastructure law is what is called competitive discretionary money, and that’s where we spend most of our time helping different entities compete for those discretionary dollars. And so it’s important to know

Jon Powers (12:49):

That could paint a picture of a case study. You don’t have to name a client, but just a case study of what that process looks like and how you guys manage that.

Rob Diamond (12:58):

Sure. So I’ll give you two programmatic examples. One, there’s $11 billion in money in the infrastructure law essentially for clean water to replace every lead pipe in the country, and that is money that is flowing through the Environmental Protection Agency and that money is all flowing through existing funding mechanisms. They’re called revolving funds, the clean water revolving funds and the drinking water revolving funds. This is a long established mechanism for the EPA to provide money to the states on that. That is exactly how that money is still moving just at much larger scale, billions more for that. But that’s all just going to the states and state departments of public works and state water agencies, et cetera, executing on those versus the Department of Energy’s grid monetization program where they’re really trying to implement the next generation improvements in how we energy transmission and resiliency and all those issues. Those are discretionary funds where really companies and state energy agencies and others are competing directly for those dollars and applying to the Department of Energy saying, Hey, we have this project in Indiana to improve our grid and modernize our grid, and they’re competing against everybody else and the agencies deciding which projects are best and which are most worthy of funding in any given cycle.

Jon Powers (14:42):

The reason I ask, because I think it’s important for folks to understand, we’re going to talk later about if there’s a change in administration and how those programs may be affected. There’s a lot of decision in the bureaucratic level figuring out where this money’s going and how it’s going to deploy in support of a much broader agenda in this case, an agenda that I think many of us support, which is addressing the climate crisis and rebuilding our infrastructure. So I want to flash forward to the IRA, now I’m going to use the grid as an example, right? The grid modernization effort in the infrastructure bill is around 65 billion of dollars being moved out to modernize and expand National grid. Well, in the IRA, there’s another almost 10 billion focused on building reliability and resilience and for instance, rural areas in the infrastructure bill for electric vehicles, there’s like 7 billion for charging infrastructure in the IRA.

(15:36):

There’s 2 billion driven for domestic manufacturing. So these sister efforts are really clear. The infrastructure bill bill is 5 billion for school buses, greeting school buses, and there’s efforts around ports, for instance in the IRA, so in the IRA side, as you mentioned, we’re really in the early innings of this very energy policy. US is very driven by tax policy to date. I think there’s a lot of transactions happening in the clean energy space. M and a last year did slow down early, but is starting to ramp back up the second half of the year. And we see 2024 being a year where there continues to be a lot of deal flow, but there still is a lot of uncertainty on these tax credits. So for folks to understand, you talk about the process of taking the ideas that came out in the legislation on the tax credit side and actually get them into written rules and where we are on in essence like a tax credit.

Rob Diamond (16:40):

Yeah, I think one, you alluded to it, I think it’s critically important, the Inflation Reduction Act, the IRA, it’s a very different law than the infrastructure law as we just sort of talked about. I mean, the infrastructure law is just this massive infusion of federal dollars either flowing to the states or in this competitive discretionary bucket, but it really it’ss Cashs dollars directly invested in and around the country. The Inflation reduction Act is part federal grant money, federal dollars, and we may call it half and half tax incentive it, it’s a wholesale rewrite of many of the energy related portions of the tax code, both on the production tax credit side, the investment tax credit side are where a lot of the action is. And although the IRA was passed in November of 2022, most of that tax guidance, which is just critically important and

(17:51):

Very complex and very complicated and includes a lot of wholesale expansion of benefits, a lot of that guidance just came out in the last two months and it has proposed guidance. So I think one critical piece for our listeners, your listeners to be aware of is that it’s a really important moment right now with a lot of that guidance that has come out of the Treasury Department and the IRS in November and December of last year is open for public comment right now, a lot of it through February with the government saying, okay, we’ve spent almost a year thinking about this. We’ve had other agencies at the table with us. We’ve solicited public comment from industry and stakeholders and the environmental community, et cetera, and here’s what we think on the hydrogen production tax credit or the investment tax credit or the advanced manufacturing production credit.

(18:55):

This is our proposed regulation. What do you think? And I think that folks have got to be engaged in that process because again, this is big stuff. It’s complex stuff. This is the government taking a swing at expanding a lot of this for the first time doesn’t mean they got it all right. And the hydrogen PTC is a perfect example, very controversial subject about the role of blue hydrogen and green hydrogen, and is hydrogen production actually adding to greenhouse gas emissions or is it not? And these are all things that industry and advocates have to have a say in. And so really encourage folks to be engaged now because this is when these decisions are being made and when these rules and regulations are going to be finalized, really critical.

Jon Powers (19:44):

That’s one of the reasons I wanted to do this podcast now is because I feel like people need to understand that we should be all be taking some action. It may be overwhelming, like not everyone’s got a policy shop, but pay attention to CF if you’re a part of the solar energy industry station or whoever, or hire a firm like Capital Council where you can have someone that’s tied into these conversations and there’s a limited window to really influence some, and it’s literally wide open right now, but we’ll shut soon in a lot of these.

Rob Diamond (20:13):

And I’m sure some people will think, oh, well, why bother providing public comment to the government? It’ll never get read. No, they read all of it. And one of the reasons why this process has taken so long is not just due to the complex nature of it, but to the amount of input that had been received through the initial phases and stakeholder engagement. I mean, thousands of hours have gone into round tables and industry stakeholder events, et cetera. So I do think they’re taking all that input very seriously.

Jon Powers (20:46):

And by the way, don’t need to recreate your own comments. Part of it is the willingness to literally copy and paste a letter or sign on to a letter and just show that there is momentum around a thought to the trust me, our opponents in the fossil fuel side are doing this, right? They’ll send out, and a lot of them will send in the same comments. We should be taking similar actions on the clean energy side and voicing our positions really loudly.

Rob Diamond (21:13):

There are people on every side of one of these issues. I mean, they’re that complex and comprehensive. So yeah, I think if you’re not providing comments, then somebody who may disagree with you very likely is. And so again, it just underscores the importance of the moment we’re in right now, literally the next 60 days on many of these inflation reduction act tax credit regulations.

Jon Powers (21:40):

Two more questions and then one is around. So both are around this upcoming year. I’m going to put the election aside to the end, recognizing this election year, and it’ll definitely affect the speed and process of some of this, but if we looked forward in January of next year and had this conversation look back, how has 2020, how’s 2024 successful in implementing both the infrastructure bill and the ira? What does the world look like in 2025 around this time that shows that we had some successes year?

Rob Diamond (22:16):

Yeah, well, let’s talk infrastructure first. I mean, again, I think the real opportunity this year is that we have two years under our belt and folks can really now see what projects have been funded and what haven’t. And for folks who have applied and not been selected, they’ve received detailed agency feedback on why they were scored a certain way and they can improve their applications and reapply. And we certainly see that across the board. So the opportunity really is that you’ve got a third year, all these programs are really matured in the sense of up and running. They’ve got examples of what they’ve wanted to fund and what those projects are looked at. And so folks can almost see case studies of what’s been successful and what hasn’t. On the Inflation reduction Act, again, it’s you’ve got many of the grant side programs coming online this cycle. You’ll have funding notices for the first time. And then again, just the importance of the rulemaking process going from proposed to final and making sure that folks are engaged in that process. And that’ll take time. I mean, again, we’ve got these regs only out, the proposed regs only out in November and many in December. I mean all the way down to the wire, the hydrogen PTC came out on December 2nd, just three days before Christmas.

(23:51):

And then the agencies are going to take all that feedback and then they’re going to go back and rework and issue those final regs. And so that’ll take us deep into 2024 before we see some of that final guidance and how that’s going to shake out.

Jon Powers (24:09):

So I’m going to take the listeners inside the White House for a second and talk about the fact that, as you said, these, there’s a reason a lot of stuff came out towards the end of the year. There is pedal of the metal by folks like Jon Podesta and others in senior executive roles in the administration who are recognizing the critical timing of getting these rules and regulations in place so we can start to move on ’em because there’s also an understanding that if there is a change in Congress or a change in the administration specifically forget change in change in Congress, they still got to pass legislation, but they can make your wife miserable, but they seem to be pretty inept right now. Anything in terms of the executive branch, if there is a change in executive branch, God forbid, what would that do to affect the implementation of a law that’s been passed by Congress, signed by the president? Truly is the law of the land, but there’s a lot of ways to slow roll and interpret what is in there to the detriment of our industry and others.

Rob Diamond (25:13):

Yeah, I mean, absolutely. I’m not so concerned on the infrastructure law. I mean, again, it was a bipartisan bill and as I alluded to earlier, generations of leadership in Washington have tried to pass this. And I think they all

Jon Powers (25:30):

Want to cut ribbons. They all want to cut roads. Yeah,

Rob Diamond (25:32):

Absolutely. Putting politics aside, at the end of the day, better roads and bridges and broadband and ports and everything is good for the country and the way that that law was passed and authorized and appropriated, that’s going to get almost spent down entirely. There might be a little bit of one year left, would there be a change in administration? And so I don’t think you’d see maybe that very, very final year of fiscal year 2026 or something, they could attempt to claw back money or something. But again, I think topically and the bipartisan nature of the importance of infrastructure investment, I don’t sweat that too much. The IRA is a different story. Again, remember this was a very partisan bill. It’s the largest climate investment in US history, but it was passed on a democratic only vote through basically a procedural trick, for lack of a better word, called budget reconciliation, which allowed Democrats to pass it on a party, essentially a party line vote. So there is no Republican love for the IRA. It’s becoming

Jon Powers (26:50):

The new Obamacare is what it’s,

Rob Diamond (26:52):

Yeah. And were you to have a Republican president and a Republican administration, I think there is a lot they could do on the regulatory front through either overt action to try to rewrite regulations because that’s what the executive branch does, or frankly, just through benign neglect and both at an agency level, at a leadership level, at a personnel level. So the IRA tax piece, the regulatory piece is of concern. I think an administration who was opposed to those programs and opposed to those regulations would could and would seek to undo them, change them, damage them, et cetera. So if these are important to you, it’s all the more reason why one, to again, be engaged now so that these are taking hold and we’re seeing the benefit to companies and to entities around the country as to the benefits they provide, but also so that they’re baked in enough and that the investments are made in enough time that they become harder and harder and harder to undo if and when that day would come.

Jon Powers (28:11):

My challenge for the listeners is if you want to get involved, and you’ve never done this before, Rob and I have both been very involved in politics and campaigns and we know how to do it, whether it be fundraising or knocking on doors, et cetera. It’s actually not that hard. And there’s places to go. Groups like Clean Energy for America, you should check them out. Also, the Environmental Defense Fund action as a C four, that’s helping to push forward the right policies that many of us support. So find a way to get involved this year because a critical campaign to continue to move forward the climate agenda, and we all need to be taking action to do it,

Rob Diamond (28:48):

And maybe most importantly, vote.

Jon Powers (28:50):

Vote. Yeah, absolutely vote. Rob, thank you so much for doing this. Would love to revisit this again in a year where we are. We’re continuing to talk about the progress here towards 2030. If you had any message for the audience on you’d like to leave them with, what would it be?

Rob Diamond (29:13):

I think it’s just don’t be intimidated by the scale and scope and complexity of this. At the end of the day, it’s really programmed by program regulation, by regulation, opportunity by opportunity and to break it down into those individual pieces is how you have to do it. I mean, every program is different. Every regulation is different. And so where and what is important to you? I think it’s critical to drill down into the details of those individual aspects of it. And that helps cut through the complexity and certainly the scope of it. But think about the infrastructure law. I mean, I think they’ve funded 40,000 projects across 4,500 communities now. So a lot of people are engaged in this and a lot of people are taking advantage of it. And if you haven’t yet, it is certainly not too late and encourage you to look at the really transformational opportunities that are ahead of us, not just this year, but in the years ahead.

Jon Powers (30:14):

And if they wanted to reach out to you guys to engage Capital Council, how would they best do that?

Rob Diamond (30:19):

Yeah, or actually all of our information is on our website. We’re capital counsel.com capital with an O and C-O-U-N-S-E-L, but you can see all our information there. My email and contact information is there all on the website. And again, we live and breathe this stuff every day on the implementation side and would be certainly more than happy to have any conversation with your listeners. Any friend of Jon is a friend of mine, so we welcome the conversation.

Jon Powers (30:49):

And mine’s Navy finally going to be able to pull one off against Army.

Rob Diamond (30:53):

Oh man.

Jon Powers (30:55):

So

Rob Diamond (30:55):

Close. Yeah, next year. Next year.

Jon Powers (30:59):

Listen, as a Bills fan, I’ve been saying that for a long time. Rob, thank you so much for the time. I appreciate it. Thanks to Colleen Young, our producer, for helping to put this together. As always, you can get more episodes@cleancapital.com. Please send your feedback on what you want to hear us talking about in 2024. That’s a really exciting transitional year for our industry and we want to be helping to lead that conversation. Thanks so much, Rob.

Rob Diamond (31:25):

Thank you, Jon for your leadership and your friendship, man. Appreciate all you do.

Jon Powers (31:29):

Absolutely.