48 State Governors Urge Congress to Renew PTC/ITC

48 State Governors Urge Congress to Renew PTC/ITC

July 25, 2008
Source: New Energy Finance

Governors from 48 US states have called on the US Congress to extend federal tax credits considered critical of the development of US renewable energy.

In a letter to Congressional leaders, the governors asked that the House of Representatives and the Senate pass legislation that would renew for at least five years the Investment Tax Credit and Production Tax Credit, which primarily subsidize solar and wind, respectively. The governors also asked that more funding be allocated for federal Clean Energy Renewable Bonds, which support the development of publicly financed projects.

The credits are currently set to expire at the end of 2008. South Carolina and Georgia were the only states that did not sign the letter from the National Governors Association, likely because of the region's poor wind and solar resources. Governors from three US territories were also signatories.

The governors sent their letter to Congress on the day the House passed a bill that raises the likelihood the PTC/ITC will be shelved until the fall. Republican Senator John Ensign had attempted to attach the PTC/ITC extensions to a federal housing bill intended to provide relief for homeowners. He reasoned that it was the one bill almost guaranteed to get presidential approval in 2008 and he hoped to get the extensions through Congress by pinning them to the legislation. He was joined in that effort by Senator Maria Cantwell, Democrat of Washington State.

In April 2008, the Senate approved the housing bill with the Ensign/Cantwell amendment attached but fiscally conservative Democrats in the House removed the extensions because the estimated USD 8bn in credits were not paid for in the legislation.

Ensign tried again on his own in June to have the PTC/ITC extensions added to the housing bill and said he would block the legislation until the credits were included. Then in early July, Ensign proposed a version of the bill that included USD 8bn in spending reductions to pay for the credit extensions. Again, the amendment failed to gain sufficent support.

The bill went back to the House without the credit extensions in mid- July and was passed by the chamber 23 July. The bill is now awaiting passage in the Senate before it goes to the White House where it is expected to be signed into law by President George W. Bush.