A bi-partisan one-year extension of production tax credits for renewable energy, including hydropower, might be attached next week to Senate legislation to address the home mortgage market crisis.
Sens. Maria Cantwell, D-Wash., and John Ensign, R-Nev., were joined by more than 20 other senators April 3 to introduce the Clean Energy Tax Stimulus Act of 2008. The measure would extend federal production tax credits for qualified hydropower facilities and other renewables for one year, and would authorize an additional $400 million for the Clean Renewable Energy Bond program.
Unlike previous attempts to extend the renewables incentives, the Cantwell-Ensign language does not attempt to repeal $18 billion in tax incentives for oil company investments in order to pay for the program. Previous measures failed repeatedly under threats of a Senate filibuster and a presidential veto. Instead, the estimated $6 billion proposal would be exempt from congressional rules requiring new spending bills to include “pay-as-you-go” funding language.
In February, the House again passed a bill that included a three-year extension for expiring production tax credits and bonds for renewable energy projects, including some hydro. (HNN 2/27/08) That bill would extend the in-service date for renewables projects through Dec. 31, 2011, and add marine and hydrokinetic renewable energy to the list of qualified energy projects. It also would authorize $2 billion for the CREB program. However, because it contains the oil tax incentives repealer, it is not expected to pass the Senate.
Cantwell and Ensign proposed the incentives in the context of a stimulus to the shaky U.S. economy. The Senate prepared to debate next week a bill, HR 3221, modestly increasing the Federal Housing Administration’s role in handling mortgage problems. Added to the bill was language giving major tax breaks to money-losing corporations.
�The renewable and efficiency industries have been soaring, creating thousands of jobs and diversifying our energy supply,� Cantwell said. �If both houses of Congress don’t pass a bill, and the president doesn’t sign it into law within the next one to two months, we will start to see as much as $20 billion of anticipated investment in 2008 delayed or canceled. This could result in more than 100,000 U.S. jobs lost at a time when the country is skidding into a recession, and energy prices keep getting higher.�
In addition to the one-year production tax credit extension, the bill would extend a solar and fuel cell investment tax credit for eight years. Ensign said the bill would encourage the development of renewable energy and expand energy efficiency in buildings, homes, and appliances.
The Cantwell-Ensign measure was expected to be offered as an amendment to the mortgage relief package. Additionally, it was reported that Sens. Lamar Alexander, R-Tenn., and Jon Kyl, R-Ariz., planned to offer an alternative amendment that would extend the renewables tax incentives for two years instead of one.
However, Senate Banking Committee Chairman Christopher Dodd expressed impatience on the Senate floor April 4 at the multiple proposed amendments only faintly related to housing.
“This isn’t a Christmas tree,” he said. “Why are we taking on matters here that run the risk of tying up this process for weeks on end … It’s a housing bill.”