The issue with that is there’s limited tax appetite. We’ve also lost many of our financial investors or banks in the last two years. But we want to take renewable energy from being alternative to mainstream. To do that, we need to change our regulatory and energy policy to open up the capital markets for traditional, 20-year utility loading. That’s my mission.
So what change needs to be made?
What we’d like to see is a national renewable portfolio standard that would require utilities to buy renewable energy. And that would help clear the price they pay for power. Then, that can be financed through bond markets or any of the capital that we have available in the United States. Actually, I think there’s adequate capital that’s interested in sustainable infrastructure development.
What role would the federal government play in the policy you favor?
Right now the government is providing an important bridge to get from a tax-oriented policy to a financial structure that’s less complicated. Tax investors helped grow the industry to where it is today — it wouldn’t be there without that. What was passed in the stimulus bill was a direct treasury grant to help continue renewable development as the capital markets recover [from the economic downturn]. Meanwhile, the government has worked on longer-term renewable energy portfolio standards and how we address carbon on a national basis. Because those are more complicated issues, they’re going to take more time.
In the interim, there’s a 30% direct cash grant refund that a project sponsor can apply for. We’re in the process of doing an application this week for two of our projects. That helps us continue to fund projects while the capital markets are recovering and fill some of the gap.
Turning to your role as a corporate CFO, what has it been like to start up a new department?
Not very many vacation days in the last three years. But as the first CFO for North America, I had the wonderful opportunity to build a finance organization from scratch. When I joined, our accounting system was outsourced. So I’ve developed the infrastructure for accounting, financial planning analysis, finance, asset management, compliance, and risk management.
How large a finance operation do you have?
I have a team at Acciona Energy North America; Acciona Wind Power has a team at our manufacturing plant; and also Acciona Solar Power has one. There’s an organization of about 30 and growing.
How do you balance your project finance role with the more traditional parts of a finance chief’s portfolio of tasks?
Because of the nature of the business, capital raising and having an external focus as a CFO is a critical part of my role and takes a good portion of my time. But I balance that with the operational side of the business. From the time we first go out and execute a land lease to the time we build and then close a project and then decide how we’re going to structure our financial statements and our reporting, it all has a finance-driven touch to it: to be able to go out and produce that package, to raise all those billions in capital. I’ve tried to make my finance organization function not only as a controllership; we have to be partners with all the cross-functional teams because they understand what the financial markets are like.