April 24

Though they´re still seeking a funding source, two Senate Finance Committee leaders are peddling a measure to continue tax credits for investments in renewables and energy efficiency.

The legislation introduced by Sens. Max Baucus, D-Mont., and Charles Grassley, R-Iowa, is part of a more comprehensive "extenders" package that also lengthens relief from the alternative minimum tax.

"Public and private investment in the renewable energy sector was about $90 billion worldwide last year à a 27 percent increase over 2006," Baucus said. "Congress can direct this investment toward the United States, rather than overseas, by supporting clean energy tax incentives."

Earlier in April, senators voted 88-8 to make a renewable energy amendment written by Sens. Maria Cantwell, D-Wash., and John Ensign, R-Nev., part of a bill addressing the subprime mortgage crisis. The Senate approved that legislation on an 84-12 vote April 10.

But it´s unclear if the almost $6 billion in renewable energy and efficiency tax credits in the Cantwell-Ensign legislation will be embraced by the House, where leaders insist on a pay-as-you-go approach.

The same could be said about the Baucus-Grassley proposal, which thus far calls for one-year extensions for production energy tax credits for wind and solar power projects, set to expire at the end of 2008. It also covers tax credits for businesses and residents investing in photovoltaics, solar water heating, fuel cells and microturbines.

Other provisions include one-year extensions for tax deductions for energy-efficient commercial buildings, and tax credits for improving the energy-efficiency of new and older homes, commercial buildings and appliances.

It also designates $400 million for clean renewable energy bonds, designed for rural cooperatives and public power providers not qualifying for renewable energy tax credits.

"Since 1999, this credit has expired three times," Baucus said. "When it expires, clean energy suffers, leading to declines between 73 percent and 93 percent in wind energy investment."

Experts claim wind energy can supply 20 percent of the nation´s electricity needs by 2030. Representatives from the American Wind Energy Association and the four largest manufacturers of turbines were on Capitol Hill in late April to urge Congress into action.

Despite bold efforts by House Speaker Nancy Pelosi, D-Calif., Congress failed to fold renewable energy tax credits into last year´s otherwise aggressive energy law. The tax credits also were bumped out of the economic stimulus package that Congress passed in February. Threats of a filibuster and a White House veto forced senators to yank such tax provisions.

But the renewable energy tax credits reappeared in February when the House rebounded by passing an $18 billion package that also includes incentives for consumer energy efficiency, plug-in hybrids, bicycle commuting and the installation of pumps carrying an ethanol blend.

In step with Pelosi´s insistence on fiscal responsibility, much of the funding would come from repealing tax breaks for the country´s five largest oil companies.

E-mail Waste News correspondent Elizabeth McGowan at elizabethherron@hotmail.com

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