In markup of a House-passed economic stimulus bill, the Senate Finance Committee Jan. 30 added language to extend expiring production tax credits for renewable energy projects, including some hydropower, as well as Clean Renewable Energy Bonds for such projects.
The bill moved to the full Senate for debate Jan. 31. If approved with committee amendments, the $157 billion economic stimulus package would return to the House, which passed a smaller $146 billion version with no energy incentive provisions. President Bush urged lawmakers to approve the House version.
The Finance Committee added a one-year extension of the production tax credits for renewable energy sources currently qualified under the expiring PTC law. The eligible project in-service date would be extended to Dec. 31, 2009.
Among qualified energy sources are small irrigation hydropower of less that 5 MW, and "incremental" hydro: efficiency improvements or capacity additions to existing hydro projects, and the addition of hydropower generation to existing non-hydropower water resources facilities. The incremental hydropower projects would continue to receive only half the production tax credit offered to other technologies. Based on inflation adjustment in 2007, hydro projects received 1 cent per kWh, compared to 2 cents/kWh for other technologies.
The committee also endorsed a one-year extension of the Clean Renewable Energy Bond program and an increase in the volume cap on bonds by $400 million. Clean Renewable Energy Bonds were created to provide tax-exempt state and local governments and electric cooperatives with a federal incentive to invest in renewable energy generation projects. They are to provide an incentive similar to the production tax credits available to investor-owned utilities that invest in such projects.
Congress previously authorized a total of $1.2 billion in bonding authority for the program, which is scheduled to expire Dec. 31, 2008. (HNN 1/28/08)
"Renewable energy production depends on investment," said Sen. Charles Grassley, R-Iowa, the Finance Committee ranking Republican, who pushed to extend the tax credit. "Investors need certainty."
Renewables associations call for tax credits extension
The National Hydropower Association and other renewable energy groups issued a call Jan. 22 for a long-term extension of production tax credits to provide developers financial certainty to attract investment. (HNN 1/25/08)
NHA Executive Director Linda Church Ciocci and officers of the Geothermal Energy Association, Solar Energy Industries Association, and American Wind Energy Association issued a joint statement, calling for extension of renewables tax credits for economic stimulus.
�Renewable energy will put Americans back to work, provide reliable and domestic energy for homes and businesses, and spur billions of dollars of economic investment but only if Congress and the administration take immediate action to extend the renewable energy tax credits,� the trade association leaders said.
In a separate statement, NHA said a long-term extension of the production tax credit and other measures could expand business by more than 20 percent in coming years. NHA added that without renewable energy tax credits its members reported their business development could slow by as much as 20 percent. Investment follows support and certainty in a stable tax environment, it said.
�In the two years since the hydropower industry became eligible for PTC certification, companies have developed 18 incremental hydropower projects that provide an additional 230,908 MWh of electricity,� NHA said. �These projects improve the efficiency of existing facilities, one by as much as 23 percent.� (HNN 1/24/08)