House passes production tax credit extension; fate uncertain

The House passed a tax measure Sept. 26 that would extend expiring production tax credits for renewable energy, including hydropower, and expand the incentives to include ocean and hydrokinetic technologies. However, the measure faced an uncertain future in the Senate as Congress approached an Election Day recess.

The House passed the Renewable Energy and Job Creation Tax Act, 257-166. However, three days earlier, Senate leaders warned the upper chamber would be unable to reach agreement on any renewables incentives other than the hard-fought bill senators passed, 93-2, on Sept. 23. Additionally, the White House threatened to veto the House version of the legislation.

Like the Senate bill, the House bill would extend expiring tax incentives for renewables, including some hydropower, although for a different length of time, and would expand incentives to ocean, wave, and tidal technologies. (HNN 9/23/08) In both bills, eligible facilities would include incremental hydropower from additions or upgrades to existing hydro plants, and hydro projects installed at non-hydropower dams.

The House bill does not include an extension of the Clean Renewable Energy Bonds program for public power utilities and electric cooperatives to finance plants that generate electricity from renewables. The Senate bill would extend the bond program with a new $800 million limitation on bonding.

The House bill would extend the incremental hydropower project in-service date for production tax credits nearly three years to Sept. 30, 2011, from Dec. 31, 2008, while the Senate bill would extend the in-service date two years, to Jan. 1, 2011. The House bill would require that facilities using ocean, tidal, and in-stream technologies be placed in service before Oct. 1, 2011, while the Senate bill would give those facilities until Jan. 1, 2012.

The major dispute between the House and Senate is the differing ways in which the two bills would be funded. The House bill includes revenue-raising measures, mainly aimed at oil companies, to pay for extending the expiring renewable energy incentives.

The Senate bill only partially pays for the renewables incentives, in deference to minority Republicans who argue there is no need to raise additional revenue if the renewables incentives are merely an extension of the status quo. Unlike the situation in the House, the Republicans in the Senate have sufficient votes to filibuster to block the bill, ensuring their objections are heeded.

It was unclear whether the two chambers would be able to work out differences in their bills in time to deliver a final energy tax package to the White House before lawmakers leave to campaign for the November elections. A final bill might have to wait until a lame-duck session of Congress after the election.

The House previously voted, Sept. 16, on an energy package containing incentives that would help hydropower. However, that bill also contained offshore oil drilling language that was expected to doom that version. (HNN 9/17/08)

The earlier House bill also included a federal renewable electricity standard requiring utility companies to generate 15 percent of their electricity from renewables by 2020. That language was not contained in either of the latest House and Senate versions.

Continuing resolution could assure $10 million for hydro R&D

Due to Congress’ failure to approve most major appropriations bills during the current session, the House passed a “continuing resolution” Sept. 24 that would fund the federal government at existing levels until a new president takes office.

If approved by the Senate, the continuing resolution would contain $10 million for the Department of Energy’s hydropower research and development program, the same amount Congress appropriated for DOE’s Water Power Energy R&D Program for the 2008 fiscal year, ending Sept. 30. (HNN 7/11/08)

Although Senate and House committees had endorsed $30 million and $40 million for the program, it appeared those appropriations would not see floor action before adjournment. However, the continuing resolution route would ensure at least $10 million for hydro R&D, a program that has been zero-funded in years past.

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