NGI The Weekly Gas Market Report / NGI All News Access

Senate Renewable Bill Excludes Revenue Raisers on Oil, Gas

Sens. Maria Cantwell (D-WA) and John Ensign (R-NV) last week introduced a measure that would extend tax credits for renewable energy and energy efficiency, without increasing taxes for the oil and natural gas industry. Ensign Friday offered the $6 billion tax entension package as an amendment to housing legislation on the Senate floor.

Senate Majority Leader quickly filed a motion to limit debate on the housing package and move toward passage this week, CQ Today reported. A vote on the motion is scheduled for April 8, it said. Senate votes on amendments to the housing bill, including the Cantwell-Ensign amendment, will begin then, said Cantwell spokeswoman Ciaran Clayton.

"I have no way of gauging" Senate support for attaching the Cantwell-Ensign measure to the housing bill, she told NGI.

Because the Cantwell-Ensign measure does not seek to raise taxes on oil and gas, it may be better received by some Senate Republicans, who had blocked previous attempts by Democrats to pass a renewable tax measure that boosted taxes for traditional fossil fuels (see NGI, Feb. 11). The new measure has 14 Republican cosponsors and six Democratic cosponsors.

One of the cosponsors is Sen. Pete Domenici of New Mexico, the ranking Republican on the Senate Energy and Natural Resources Committee. "It is time to stop playing politics with our energy future and extend these important tax credits," he said.

By "getting the problematic oil and natural gas offsets out of the mix, we think [the] odds are improving [that] this effort could get done in April," said energy analyst Christine Tezak of Stanford Group Co.

But even with the oil and gas offsets out of the bill, the Cantwell-Ensign measure does not face smooth sailing. "The multi-year nature of some of the proposed [tax credit] expansions may make it a tougher sell to fiscal conservatives who might find the multi-year extensions beyond the 'targeted and temporary' nature of stimulus legislation," she said.

The Cantwell-Ensign bill extends the placed-in-service date by one year (through Dec. 31, 2009) for facilities producing electricity from renewable sources to qualify for a 10-year tax credit. It also allows companies to claim a 30% business credit for the purchase of fuel cell power plants and solar energy property and a 10% credit for stationary microturbines through Dec. 31, 2016.

In addition, the measure extends the tax credit for residential solar property for one year (through Dec. 31, 2009) and repeals the $2,000 credit cap for qualified solar electric property. It allows the tax credit to offset alternative minimum tax liability as well.

Current law allows utilities that cannot benefit from tax credits to issue clean renewable energy bonds (CREB) to help them reduce the cost of renewable energy investments. The national limit on CREB bonding authority is $1.2 billion and the CREBs must be issued before the end of this year.

The Cantwell-Ensign bill authorizes an additional $400 million of CREBs to be issued and extends the authority to issue such bonds through Dec. 31, 2009. It also allocates one-third of the additional bonds for qualifying projects of state, local and tribal governments.

Moreover, the measure extends through Dec. 31, 2009 the current deferral that allows qualified electric utilities to recognize gains from certain transmission transactions over an eight-year period.

It also extends the tax credits for energy-efficient improvements to existing homes, energy-efficient new homes, energy-efficient commercial buildings and energy-efficient appliances.

©Copyright 2008 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus