Renewable Power Tax Credits Will Be Revived--Reid

Reid: Renewable Power Tax Credits Will Be Revived

Jun 25 - Las Vegas Review - Journal

Tax credits that industry officials said would speed the development of renewable power in Nevada were left behind when the Senate passed a broad energy bill this week.

On Friday, Sen. Harry Reid, D-Nev., promised to revive a series of tax breaks that were blocked from the final measure.

The $32 billion package that was shelved included five-year extensions of production tax credits for geothermal, solar, wind, hydroelectric and other renewable energy projects.

It also offered tax breaks for investments in energy efficiency, and for purchase of hybrid vehicles, among other provisions.

"The fight is not over," Reid said at a news conference reviewing the energy bill that passed 65-27 late Thursday.

Republicans blocked the tax package, complaining that its benefits would have been offset by tax increases for oil and gas companies and would have led to gasoline price increases.

Democrats and their allies said the action reflected the influence of oil companies on the GOP.

"It shows that the oil industry can still flex its muscle," said Tyson Slocum, director of Public Citizens Energy Program, a consumer advocacy group.

Representatives of renewable energy interests were surprised and unhappy.

"How disappointed could I be?" said Karl Gawell, executive director of the Geothermal Energy Association. "I mean, the Senate bill basically totally cuts out renewable energy."

Reid, the Senate majority leader, said the Senate will reconsider the tax provisions later this year, possibly as part of a major farm bill.

Meanwhile, the current tax credit for renewables expires in December 2008. The credit, which is 1.9 cents per kilowatt hour of production, is worth several thousand dollars to $1 million or more to projects of varying sizes, according to industry experts.

Gawell said that lack of certainty about the credit renewals could slow development of geothermal power in Nevada, the second- largest producer of geothermal energy behind California.

Nevada has 15 plants producing nearly 300 megawatts of electricity, while 31 other plants are in varying stages of planning and design, according to the Geothermal Energy Association.

"The production tax credit would be a huge help in the financing of those plans," said Brian Fairbank, CEO of Nevada Geothermal Power Co.

"It's necessary for the industry to have that," he said, adding geothermal plants cost $100 million on average.

Fairbank oversees the Black Warrior geothermal project in Washoe County and the Blue Mountain and Pumpernickel Valley projects in Humboldt County.

The tax package that was formed by the Senate Finance Committee failed 57-36 on Thursday, three votes short of the 60 votes needed to move it forward.

Reid favored the tax provisions, while Sen. John Ensign, R-Nev., voted against the tax package.

A spokesman said Ensign was flying on Friday and could not be reached. In an interview earlier, Ensign expressed concern the Senate bill would discourage domestic oil and gas production.

"That is unfinished business," said Sen. Jeff Bingaman, D-N.M. "The truth is most of the tax provision that we were trying to extend there are going to expire in another year or two."

The White House is considering vetoing the bill over provisions that seek to criminalize price gouging during national emergencies, and that allow the Justice Department to subpoena OPEC nations for violating antitrust laws.

Reid shrugged off the threat of a White House veto.

"They can take their rubber stamp, and you know what they can do with it," Reid said.