Legislation introduced to the U.S. House of Representatives yesterday could extend production tax credits for electricity generated by qualifying conventional hydro and marine hydrokinetic projects.
The bill, called the Renewable Electricity Tax Credit Equalization Act, would apply to credits that were previously applied to hydroelectric and marine energy facilities under Code Section 45 of the Protecting Americans from Tax Hikes Act. These incentives were also applicable to closed- and open-loop biomass, geothermal and solid waste-burning plants, but expired Dec. 31, 2016.
“All of these renewable energy sources represent a new frontier for our environment and for economic growth, and it’s important that we give them the support they need,” said Rep. Elise Stefanik, R-N.Y., who introduced the bill.
Specifically, the legislation would:
- Extend Code Section 45 production tax credit (PTC) and offer the election to take Code Section 48 investment tax credit (ITC) for qualified hydro, marine energy, closed- and open-loop biomass, geothermal and solid waste-burning plants; and
- Ensure the extension is on the same terms and for the same time and phase-out schedule provided to Section 48 solar energy properties in the Omnibus Spending Act of 2015.
The bill also addresses inequities between credits received by hydro, biomass and waste-burning generation, which are up to half of those given to wind and geothermal.
“The hydropower industry applauds Congresswoman Stefanik for her efforts to eliminate the disparity in the tax code that puts hydropower and marine energy projects at an economic disadvantage, said Linda Church Ciocci, Executive Director of the National Hydropower Association, which helped the representative craft the bill. “Hydropower plays an indispensable role in maintaining a reliable grid system, and has the potential to grow by 50 GW by 2050, creating over 75,000 jobs in the process.
“Rep. Stefanik’s bill will put hydropower on a level playing field by curtailing the unfair tax policies that are driving away new infrastructure investment.”
Other hydro industry members have echoed NHA’s stance — notably Brookfield Renewable, which operates several hydropower facilities in Stenfanik’s district.
“We appreciate Rep. Stenfanik’s leadership in supporting the hydropower industry, which creates jobs in rural communities, such as those in upstate New York, and provides affordable, clean and reliable electricity to U.S. businesses and families,” said Nicolas Bosse, Brookfield Senior Vice President of Government & Regulatory Affairs.
The proposal has yet to be assigned a House bill number, but NHA is urging members in America’s hydro sector to ask their legislators to support the bill as Congress mulls a federal tax reform package.
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