Congress passed a $787 billion economic stimulus bill late Feb. 13, providing a lengthy list of tax incentives and spending programs, including financial incentives for the development of some hydropower and other renewable energy sources.
Senate voting was held open for several hours to await arrival of Sen. Sherrod Brown, D-Ohio, in Washington to cast the 60th vote needed for passage. The White House arranged for a government plane to fly him back from services for his late mother in Ohio. (HNN 2/13/09)
The Senate then passed the bill 60-38, with only three Republicans voting for the politically contentious tax and spending package, reaching the bare 60 votes needed for passage. The House earlier passed the bill, hammered out by a joint conference committee, on a vote of 246-183, with no favorable votes from the minority Republicans.
President Obama hailed congressional approval of the economic stimulus bill as a “major milestone on our road to recovery” and vowed to move swiftly to set the plan in motion.
“I will sign this legislation into law shortly, and we’ll begin making the immediate investments necessary to put people back to work,” Obama said Feb. 14.
The House-Senate conference committee crafted the compromise from the Senate’s $838 billion bill, and the House’s $819 billion version of the legislation. (HNN 2/10/09)
Production tax credits, investment tax credits, bonds
The bill includes several renewable energy incentives, including an extension of the project in-service date through Dec. 31, 2013, to be eligible for production tax credits for renewable energy. Among eligible renewables technologies are small irrigation hydro, incremental hydropower from additions to existing hydro plants, hydropower development at existing non-powered dams, ocean energy, and in-stream hydrokinetic technologies. The measure is expected to cost $13.1 billion over 10 years.
Another provision would allow new renewables projects to claim a 30 percent investment tax credit in lieu of a production tax credit for duration of the production tax credit extension. The provision is intended to help free up financing for renewables projects, given market conditions and uncertain future tax positions of potential investors. It is expected to cost $285 million over 10 years.
The bill authorizes $1.6 billion of new Clean Renewable Energy Bonds to finance development of facilities that generate electricity from renewables, including the hydro and ocean energy sources listed in the production tax credit section. The bonds are offered to entities that are not eligible for the tax credits: state, local, and tribal governments; public power providers; and electric cooperatives.
Investment tax credit for advanced energy manufacturers
Hydropower equipment manufacturers would be eligible to participate in a new 30 percent investment tax credit for facilities manufacturing “advanced energy property.” Advanced Energy Investment Credits are available only for projects certified by the Treasury secretary, in consultation with the Energy secretary, through a competitive bidding process. The Treasury secretary must establish a certification program within 180 days of the bill’s enactment, and may allocate up to $2.3 billion in credits.
Advanced energy property includes technology for the production of renewable energy, energy storage, energy conservation, efficient transmission and distribution of electricity, and carbon capture and sequestration. The proposal is estimated to cost $1.7 billion over 10 years.
Other provisions of the bill that support hydropower development include a 20 percent tax credit for research and development expenditures in renewable energy, and a one-year extension in the bonus depreciation allowance for capital expenditures. The bill also would establish Treasury Department energy grants that could be used in lieu of production tax credits for electricity produced from renewable energy facilities.
Appropriations include funds for infrastructure
The final bill provides $311 billion in appropriations, including $120 billion for investments in infrastructure and science, and $37.5 billion for investments in energy that include another $30 billion for infrastructure. Included are allocations for rehabilitation and upkeep of government water resources and hydropower facilities.
Investments include: $2.75 billion for the U.S. Department of Homeland Security to “secure the homeland” and promote economic activity; $4.6 billion in funding for the Corps of Engineers; and $1 billion for the Bureau of Reclamation. Investments in energy include $2.5 billion for energy efficiency and renewable energy research, and $6 billion for new loan guarantees for standard renewables projects and for electricity transmission projects.
The $37.5 billion to be invested in energy includes $2.5 billion for energy efficiency and renewable energy research, development, demonstration, and deployment activities. The figure includes $6 billion for new loan guarantees for wind, solar, and other ï¿½standardï¿½ renewable energy projects and for electricity transmission projects.