Slow Progress for Renewable Energy

Slow Progress for Renewable Energy

Image: CanWEA

"While a number of hurdles remain in the Senate, passage of the bill (S. 1637) would be a very big step in gaining the much-needed PTC extension this year."

AWEA legislative director Jaime Steve

Legislation Washington, D.C. - May 11, 2004 [SolarAccess.com] The U.S. Senate is on track-but moving slowly-to complete action by the end of May on its version of the corporate tax legislation containing a full 3-year wind energy production tax credit (PTC) extension (through 12/31/06), according to renewable energy industry associations like the American Wind Energy Association (AWEA) who are paying close attention to the crucial legislation.

"While a number of hurdles remain in the Senate, passage of the bill (S. 1637) would be a very big step in gaining the much-needed PTC extension this year," said AWEA legislative director Jaime Steve. "However, final action still requires House passage of a similar bill, a conference committee to hammer out differences between House and Senate versions of the bill, and one last vote in the House and Senate to approve the compromise bill before it would be ready for the President to sign into law," Steve added.

In other words, it's still a ways off.

The corporate tax bill would repeal a tax break for exporters that has been deemed an illegal trade subsidy by the World Trade Organization (WTO). The European Union has imposed a tariff on some U.S. goods now at 7% and slated to increase by one percentage point a month, up to a maximum of 17%. This penalty is the key item pressuring Congress to pass the corporate tax bill this year.

The bill also contains some key tax credits for other renewable energy industries such as solar and geothermal. The tax section would bring in a first-in-a-generation 15% Federal tax credit for residential systems, as well as extending the Federal production tax credit for large solar power plants.

The corporate tax bill-also known as the "JOBS" (Jumpstart Our Business Strength) bill, or the FSC-ETI (Foreign Sales Corporation - Export Trade Incentives) Act-is being slowed by an effort to add an extension of unemployment benefits for individuals who have been out of work more than 26 weeks. Sen. Maria Cantwell (D-Wash.), whose state has a high jobless rate, is leading the effort to extend unemployment benefits. The effort could lead to yet another Senate vote to cut off debate, called a cloture vote. If the cloture vote occurs next week, and if the Senate leaders are unable to muster the 60 votes needed to shut off debate on the unemployment benefits amendment, then the corporate tax bill would likely be pulled from the Senate floor.

At the moment, key Senators and staff hope to pass the corporate tax bill before the end of May. Action would then likely follow in the House of Representatives, which is waiting to see what emerges from the Senate.

The PTC language as contained in the energy tax section of the Corporate Tax Bill calls for:

- Extending the PTC through December 31, 2006 (a 3-year extension);
- Eliminating the PTC inflation adjustment provision starting January 1, 2005;
- Creating an exemption from the requirements of the Alternative Minimum Tax (AMT) for the first four years of turbine operation;
- Expanding the PTC to include solar, geothermal, small irrigation hydro power, municipal solid waste, and additional forms of biomass; and
- Allowing a tradable credit for the following tax-exempt entities only: rural electric cooperatives, state agencies and municipalities, Indian Tribal governments, and the Tennessee Valley Authority (TVA).

Information courtesy of the American Wind Energy Association (AWEA)'s Wind Energy Weekly.

For Further Information:

• AWEA

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