U.S. senators have introduced a bill to extend the deadlines for incremental hydropower and other renewable energy sources to qualify for production tax credits and for Clean Renewable Energy Bonds.
The Alternative Energy Extender Act, S.2401, was introduced by Sens. Charles Grassley, R-Iowa, and Max Baucus, R-Mont. It would extend the tax credit's in-service deadline for qualified projects to Jan. 1, 2011, from the current Jan. 1, 2008. It also would extend bonding authority for the Clean Renewable Energy Bonds to Dec. 31, 2010, from the current Dec. 31, 2007.
National Hydropower Association honors co-sponsor
The National Hydropower Association honored a co-sponsor of the bill, Sen. Gordon Smith, R-Ore., for his efforts to pass the original incentives contained in the Energy Policy Act of 2005. Smith, a member of the Senate Finance Committee, was named NHA's 2006 Legislator of the Year, during the NHA annual conference April 2-5 in Washington.
The new Senate bill also would authorize another $2.4 billion in Clean Renewable Energy Bonds, which are an incentive for tax-exempt public power utilities that cannot use the production tax credit. The bill would allot $800 million a year in bonding authority for calendar years 2008, 2009, 2010.
The Energy Policy Act originally authorized $800 million in Clean Renewable Energy Bonds to be used before Jan. 1, 2008. Public power utilities could issue up to $500 million in bonds, while rural electric cooperatives could issue up to $300 million in bonds.
NHA: Examine hydro assets for tax credit opportunities
The hydro industry hopes the incentives will spur the expansion of existing hydro plants and the addition of generating units to non-hydro dams and water facilities. Industry leaders said extending the deadlines is key to incremental hydro development, because the current window for qualifying closes Jan. 1, 2008. Bond applications must be filed with the Internal Revenue Service by April 26, 2006.
Incoming NHA President David Youlen encouraged project owners to look for hydro assets that could be developed if Congress extends the tax credit, and to advise NHA so lawmakers can be kept informed of hydro's potential. Youlen is vice president of New York Operations for Brookfield Power, which approved plans to add a total of 12.1 MW of incremental capacity to eight projects at a cost of $18.4 million to take advantage of the production tax credit.
"In order for hydropower to be taken seriously by federal legislators as part of our nation's energy solution, we must show our willingness to advance hydro by building incremental projects," he said.