UPDATE – Senate-passed stimulus includes incentives for hydro

The Senate passed an $838 billion economic stimulus bill Feb. 10, providing a lengthy list of tax incentives and spending programs, including financial incentives for the development of renewable energy including some hydropower.

The Senate passed the bill, 61-37, with a minimum of 60 votes needed to avoid a filibuster by Republican opponents. The bill now goes to a conference committee with the House, which approved its own $819 billion economic stimulus package, 244-188, on Jan. 28. (HNN 1/28/09)

Senate Majority Leader Harry Reid, D-Nev., and House Speaker Nancy Pelosi, D-Calif., have said they want a final bill to be on President Obama’s desk for signature by the Feb. 16 Presidents’ Day holiday.

A bipartisan group of senators led by Sen. Susan Collins, R-Maine, and Sen. Ben Nelson, D-Neb., developed the Senate measure, a substitute amendment to an original bill. Even so, only three Republicans voted for the new measure.

The Senate bill includes several renewable energy incentives. It would extend the project in-service date through 2013 to be eligible for production tax credits for renewable energy. The House passed similar language.

Among eligible renewables 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 such new renewables projects to claim a 30 percent investment tax credit in lieu of a production tax credit for the duration of the production tax credit extension. Similar to House language, that provision is intended to help free up financing for renewables projects, given current market conditions and uncertain future tax positions of potential investors. The provision is expected to cost $218 million over 10 years.

As was the case in the House, the Senate bill authorizes $1.6 billion in new Clean Renewable Energy Bonds to finance development of facilities that generate electricity from renewables, including hydropower and ocean currents. The bonds are offered to entities not eligible for tax credits: state, local, and tribal governments; public power providers; and electric cooperatives.

The Senate bill includes a temporary program for rapid deployment of renewable energy systems and electric power transmission projects. It would authorize $10 billion for fiscal years 2009-2012, to provide the cost of guarantees made under that section of the bill.

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