US Congress votes to extend wind energy production tax credit

Washington (Platts)--24Sep2004

The US House and Senate Thursday approved a $146-bil middle-class tax bill
that also would extend through 2005 a 1.8-ct/kWh production tax credit for
wind energy and permit producers of marginal oil and natural gas wells to
accelerate depreciation of equipment. But a larger set of energy tax breaks
was left off the bill after conference committee leaders drew the line on
spending. In addition, the tax bill (HR 1308), which includes $13-bil in
corporate tax relief, extends tax breaks for electric and clean-air vehicles.

The 1.8-ct/kWh renewable production tax credit is also applicable to
electricity produced from chicken waste and biomass that is produced solely
for the purpose of supplying energy. Hopes for a $20-bil energy tax measure
supported by the Senate now rest with a corporate tax bill (HR 4520). The
Senate version of that bill included the renewable production tax credit
extended last week, and would have expanded the incentive to geothermal, solar
and biomass sources not grown solely for energy production.

"We are looking for the right train that will make the energy tax credit
[package] go because it is very important to us and very important to the
president, but we have to be careful that we don't damage the bill," Senate
Finance Committee Chairman Charles Grassley (Republican-Iowa) said Tuesday.
Congressional sources are increasingly pessimistic a broad energy bill will
get through Congress this year. Senate Energy and Natural Resources Committee
Chairman Pete Domenici (Republican-New Mexico) moved the energy tax title from
his comprehensive energy bill (S 2095) to the corporate tax bill in April. He
then advocated tacking on the rest the energy bill to the tax bill, but
Grassley has resisted the move.

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