Cantwell Leading Efforts to Reinstate Expired Clean Energy Tax Credits
Sen. Maria Cantwell (D-Wash.), the top Democrat on the Energy and Natural Resources Committee, is leading efforts to reinstate and extend a slew of expired clean energy tax credits, and she may try to have them included in a broad energy bill now being written by the committee.
Cantwell, who is also a member of the Senate Finance Committee, has begun a campaign to have the credits, such as the wind production tax credit, reinstated before December, Katie Cullen, a partner and founding member of SC Partners LLC, said April 23.
“She has promised she will put a package together and push this package until she gets it done,” said Cullen, who lobbies for companies such as Tempe, Ariz., solar manufacturer First Solar Inc. and San Francisco-based wind farm operator Pattern Energy Group Inc.
Details are still being decided, but the package is expected to include a three- to five-year phaseout of the 2.3-cent-per-kilowatt-hour production tax credit and an extension of the solar investment tax credit that would step down from 30 percent to 10 percent at the end of 2016, Cullen said in an interview following her remarks at a conference hosted by the American Council on Renewable Energy.
The final version of the bill may include a three- to five-year phaseout of the PTC, a time frame the wind industry would likely support, according to Cullen.
In addition, Cantwell “has indicated” she will include an extension of an investment tax credit for residential solar energy installations, as well as a measure to extend master limited partnerships—currently reserved for the fossil fuel industry—to renewable energy as well, Dan Reicher, ACORE interim president and chief executive officer, said.
“She's bound and determined that that package, those pieces, move forward,” Reicher said in an interview. “I think there is a decent probability that a tax extenders package will happen this year.”
Energy Bill Among Possible Vehicles
Rosemarie Calabro Tully, a spokeswoman for Cantwell and other Democrats on the Senate Energy and Natural Resources Committee, said attaching a measure to reinstate expired tax credits to the energy bill is being considered. The legislation is expected to be unveiled by the committee later this year.
“Senator Cantwell wants to move energy tax provisions that provide the industry with more certainty than a short-term fix,” Tully said in an e-mail to Bloomberg BNA. “The senator is open to a number of different methods for doing so—an energy bill being one of those possibilities.”
Although the Senate Finance Committee has primary jurisdiction over tax issues, previous omnibus energy bills, such as the Energy Policy Act of 2005 (Pub. L. No. 109–58), have had entire titles devoted to tax policy. A spokesman for Sen. Lisa Murkowski (R-Alaska), who is chairman of the Energy and Natural Resources Committee and who would hold the most sway over the bill's formation, declined to comment.
Congress Approved Retroactive Extension
Congress voted in December 2014 to retroactively extend 10 energy tax credits at a cost of roughly $10 billion as part of a broader tax extenders bill until 2015.
In addition to the wind production tax credit, the $42 billion measure extended the $1-per-gallon credit for biodiesel and renewable fuel, as well as credits for cellulosic biofuel makers and certain energy efficiency improvements (233 DTR G-5, 12/4/14).
The uncertainty about when and if Congress will retroactively extend them again is reducing the amount of money investors are willing to make available for renewable energy projects, said Brad Nordholm, chief executive officer of Greenwich, Conn.-based private equity firm Starwood Energy Group.
“The inconsistent and erratic extension of tax credits has a very chilling effect on the availability of capital,” Nordholm said during an ACORE panel discussion. “For us to invest in development projects that can only happen if there is an [tax] extension is not prudent.”
Analysts Split on Action
Analysts are split about when and if Congress will act on tax extenders. Cullen of SC Partners said it probably would depend on when Congress throws in the towel on comprehensive tax reform for the year, an effort to overhaul the tax code that is moving on a separate track and isn't expected to come to fruition prior to the 2016 election.
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