What I really told Thom Tillis about terminating new solar/wind subsidies using "placed in service"

Why did Thom Tillis lie to the Senate about what I said in a secret meeting he swore not to discuss?

Several energy experts, including me, have explained to Senator Thom Tillis why the Big Beautiful Bill’s termination of subsidies for solar/wind projects not “placed in service” before the end of 2027 is absolutely necessary to keep electricity reliable, lower costs, and avoid hundreds of billions in future budget costs.

Sadly, in his zeal to preserve these subsidies (and perhaps his zeal to tank the bill) in his recent speech to the Senate he tried to discredit the many experts who support "placed in service" by singling out me—and trying to make me look ignorant by lying about my remarks in a secret meeting he organized with me, a meeting he and all participants swore not to discuss publicly.

In his Senate speech debating the Big Beautiful Bill, Tillis portrayed my remarks in his meeting as illustrating that I support a "placed in service" termination "without a clue about what they are potentially doing to our grid"—that I am someone who "can’t possibly understand what happens to this pipeline of power purchase agreements and the future of our grid." Anyone who believed Tillis's speech to the Senate would conclude that I was advocating "placed in service" without understanding its implications for the grid and for various projects in progress.

In reality, in that meeting (and in two previous ones) I explained painstakingly and irrefutably why the "placed in service" terminology is crucial: it is the only way for this Congress and administration to terminate grid-destroying solar/wind subsidies—and its use in both the House bill and most recent Senate bill (which Tillis opposes) totally protects subsidies for completed and near-completed projects.

And I can prove that my account is right and Tillis's is astonishingly dishonest. Because, to protect myself against the possibility that Senator Tillis or someone else in the meeting would break their oath to not discuss it publicly, I recorded my own remarks.

I hope all of Senator Tillis's colleagues read what I actually told him—first and foremost to understand the issue and stick with the "placed in service" termination, but also to draw their own conclusions about the motives and character of a colleague who would break an oath to secrecy in order to defame one energy expert and, by association, the many others who agree with him.

The following (everything in italics) is a transcript of (just) me speaking. I've edited it (extremely lightly) to avoid repetition.

The truth all Senators need to understand: "placed in service" is essential to terminating grid-destroying solar/wind subsidies

There's this document. It's called "The truth about the House Big Beautiful Bill's effects on subsidized projects."

90% of politicians I've talked to don't understand fully what the House did. I worked on this very intimately, and the issues are very clear. Basically, what the House Big Beautiful Bill did is it had two requirements to get a subsidy.

You had to be "in construction" by a certain date. The easy way to do that is you pay 5% of the project cost for transferable assets like solar panels.

And you have to be "placed in service" by 12/31/28 which actually means you need to be connected to grid, operating, etc.

And the reason for doing that was that the members of the House wanted to accomplish three things.

Goal 1: Stop spamming the grid with unreliable, subsidized solar/wind projects

One is they wanted to stop what I would call, some of you would not like this language, the "spamming" of the grid with unreliable, subsidized solar and wind projects. People like Doug Burgum, Chris Wright, me certainly, are very concerned with subsidized, unreliable solar, wind having negative effects on the grid. And the idea was, if you don't set the "construction" early enough, or the "placed in service" early enough, what's going to happen is the entire green industry is going to load up. They're going to put their 5% basically-recoverable money down. They're going to initiate a whole bunch of projects, and then they're going to have a four-year "safe harbor" to place in service.

So for example, if you take the Senate [Finance] proposal, you allow "in construction" by end of 2026, and that means "placed in service" end-of-2030. You've now given the green machine a year and a half to just absolutely dump as much capital as it possibly can in these 5% things [recoverable investments] with the confidence they can "place in service" within four years.

So goal is to stop the spamming of the grid with unreliable, subsidized projects.

And so both of those ["placed in service" by end of 2028 and "in construction" within 60 days of enactment] were necessary for that.

Goal 2: Actually have the subsidies terminate

The other goal was to actually have the subsidies terminate. And this was really the insistence on the "placed in service" by end-of-2028. Those of us who were negotiating on my side were pushing for end-of-2027. The idea was, unless the subsidies truly terminate during Trump's term, they have not terminated, and they will be extended, just like the PTC has a million times before.

Goal 3: Protect completed and near-completed projects

Consideration three was the desire to protect completed and near-completed projects. And so the way that it did this was: it's really easy to meet the "construction" thing. So they had 60 days. We argued for "when the bill was enacted," because we just wanted existing projects. [But under the final House bill] you have 60 days to start things, and then you have three-and-a-half years to complete things. And so any project that is is really in progress, that is near complete will be there.

So in practice existing projects are fully subsidized. Near-complete projects are fully subsidized. Many new projects will actually be initiated under the House bill, because there's 60 days to meet this very easy "construction" requirement.

I've heard many claims from certain special interests that are muddying this. But again, existing projects are totally protected and totally subsidized. Future projects, quite a few are subsidized.

After my initial presentation I was followed by several major lobbyists supporting solar/wind subsidies. (In his speech to the Senate that disparaged me as ignorant about energy, Tillis falsely described the lobbyists as "3 people, practitioners that actually work in" energy. The only participant who actually worked in industry was very supportive of my views.)

None of them could refute my points about how "placed in service" truly terminated solar/wind subsidies while protecting completed and near-competed projects. Nor could Senator Tillis or Senator Curtis—both of whom have admitted to me that they did not understand this issue well until I explained it to them when I spoke to the Republican Senate two weeks ago. (Senator Curtis has spoken publicly about this meeting and others we've had, hence I feel comfortable mentioning him here.)

Here are some of the other remarks I made during the meeting.

Solar/wind lobbyists hate "placed in service" because it actually stops subsidies for new projects

They didn't say anything in response to what I said. They just committed the exact fallacy I warned about. So I said there are two issues. Are these subsidies good? And then how to terminate them less disruptively? And most of the arguments we got are: these subsidies are good, and therefore we need these new projects. Of course, they say we're ready to go off subsidies. So did John Ketchum, some people's boss here, who said in 2016 solar and wind are now cheaper than fossil fuels. We don't need subsidies anymore. That was nine years ago.

All of the arguments they've made about the necessity of these subsidies are very easy to refute, and I've refuted them in the document, but we were supposed to talk about terminating them non-disruptively. And the point that I made is that the House bill entirely protects complete and near-complete projects, which is true.

So the purpose of this [lobbying by others], and we know the incentives here, the purpose of this is the desire to to initiate a lot of new projects and keep the subsidies going. Obviously, John Ketchum and everyone who works for him knows that the way to keep subsidies going is to say, "I don't want subsidies going." If they tell you, “I want subsidies forever, you're going to tell them to pound sand.” But if they say, "just one last time" [you might be persuaded].

The intent of this [the "placed in service" plus "in construction” language] was to truly terminate the subsidies and to stop the spamming of the grid with these projects. So I understand that we have people here arguing these projects are great. "They've made the grid so great, we need them more to improve it." Now this is hard to argue, given that reliability has gone to the toilet and prices have gone up with these subsidies.

The hope that Senators Tillis and Curtis have given subsidy-seekers

When President Trump was was elected, I think people expected a real termination. That was a real possibility on their mind. When the House passed what they passed, it was a real termination. A very generous one that actually allows a lot of new projects to be initiated, but still, at least a real termination. With what the Senate has done now [with the original Senate Finance proposal], the industry has open season, because now they know, if we take Senator Curtis's most recent proposal, they have a full year and a half to put 5% down at any point in that year and a half, at which point they have four more years to be "placed in service," plus four years to get in rooms like this, to lobby for extensions, as they've done for the past 30 years.

The unreliability of CBO/JCT budget scoring for non-termination of subsidies

The original IRA was scored at less than $300 billion. CBO and JCT are not very transparent about how they do things, so we have very clear methodology for everything using EIA data and actually the government's expectations about things. And if you run those, what's the difference between Senate [Finance] and House? $115 billion. And if you add back leasing, it's going to be a whole lot more. I'm in favor of having leasing back, just everything terminated [during the Trump Administration]. The numbers are not trustworthy, as we've seen, because the IRA was underestimated by a factor of 3-5 3 years ago!

Real experts support real termination of solar/wind subsidies using "placed in service"

I have to go to the airport, unfortunately, in a second. Everything they were saying [about solar/wind subsidies being valuable] is refuted in this document. But let me just say this position I'm taking on the IRA, by the way, is the position of Chris Wright, Doug Burgum, James Danly [Deputy Secretary of Energy, former FERC Chairman], the people in the administration who actually know about electricity and are not hugely incentivized to farm more subsidies. As I explained, the farming of subsidies by the organizations these guys [the solar/wind lobbyists in the room] represent has been an existential destroyer of the grid. [Here's an electricity CEO who is responsible for proving low-cost, reliable electricity to 3 million customers explaining why it's crucial to terminate solar/wind subsidies.]

We used to have low-cost, reliable electricity. And even before demand went up because of solar and wind subsidies that have mechanisms that defund reliability, we now have expensive and unreliable electricity. And they're claiming we need more of the same.

The difference between desubsidizing and destroying

So the unreliables [solar and wind without storage] don't help with capacity. Batteries actually do help with capacity. So one thing is, insofar as these things are needed, whatever is needed for the grid will be demanded by the market without subsidies, I'm not arguing for destroying anything. I'm arguing for desubsidizing things.

My incentives vs. lobbyist incentives

Just remember that these guys are paid to say exactly what they're saying, and they will get fired if they do not get more subsidies. I am paid to say exactly what I think.

And I was told not to come here, by the way. Many people said, "Don't come here. It's a set up."

[E.g., one trusted advisor told me, upon learning that I agreed to debate lobbyists in front of Tillis "This is obviously a feint to liberalize the text. He can say he included you and 'heard all the different perspectives.' He’s a total fraud." At the time I defended Senator Tillis, who seemed so earnest. Now I feel more than a little naive.]

Final thoughts

At the outset of the secret meeting, according to my stenographically capable Chief of Staff, Senator Tillis said, "This is an exchange of ideas. This is an off the record discussion. If I see any evidence that anybody is trolling coming out of this meeting, I will do everything I can to make your or your members' lives miserable or any of you." He added that if anyone on his team violated confidentiality they would "be fired before the sun was set."

In a text message to me, he later wrote, "If you see even a whiff of the content of the meeting in the press, let me know."

Well, Senator Tillis, there was a lot more than a whiff about the meeting. There was the absolute stench of complete distortion. And it came from you—on the Senate floor, no less.

In the end, I'm glad that you broke your oath and that you lied about what I said. Because it gives me the opportunity to share the education I gave you about the necessity of "placed in service"—an education you have, sadly, refused to engage earnestly with—with your colleagues and with the world.

I hope anyone reading this article shares it with their Senator, so that every Senator has the opportunity to learn the truth: that for the sake of reliable, affordable electricity, our economy, and our budget, the Senate needs to stick to its termination of subsidies for solar/wind projects not “placed in service” before the end of 2027.

PS There are a lot more improvements the Senate can make, but nothing matters more than "placed in service."

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