Renewable energy supporters are scrambling to shore up support for their respective tax incentives ahead of an expected Senate Finance Committee markup of an extenders package.
Sen. Chuck Grassley (R-Iowa) yesterday said he’s working to ensure that an extension of the renewable production tax credit makes the cut for an extenders package.
“If there is just one thing in the extenders package that’s a target for striking, it will be that,” Grassley told E&E Daily yesterday.
The Finance Committee in April 2014 approved an extenders bill that included a two-year extension of the PTC, after the panel rejected an amendment by Sen. Pat Toomey (R-Pa.) that would have stripped the credit from the bill. The extenders package signed into law at the end of last year included a retroactive extension of the PTC, which expired again just weeks later.
While Toomey’s amendment failed on a 6-18 vote, Grassley said he’s not taking his chances. “He’s going to be back,” he said of Toomey.
Significantly, the votes against the PTC included Finance Chairman Orrin Hatch (R-Utah).
Grassley laid out his case for the credit – which he authored in 1992 – in a letter to Hatch this week.
“But, I also know this credit won’t go on forever,” Grassley wrote. “It was never meant to, and it shouldn’t. In 2012, the wind industry was the only industry to put forward a phase out plan. I have expressed support in the past for a responsible, multi-year phase out of the wind tax credit. But, I believe any phase out should be done in the context of comprehensive tax reform, where all energy tax provisions are on the table.”
Grassley isn’t the only renewable backer moving in anticipation of an extenders markup, which sources off Capitol Hill say could happen as early as next week.
The Solar Energy Industries Association yesterday urged its members to contact their senators and let Hatch and Finance Committee ranking member Ron Wyden (D-Ore.) know of the importance of the investment tax credit, which will lose much of its value at the end of 2016 without an extension.
A GOP aide on the Finance Committee said yesterday there’s no date in mind for a markup but noted that Hatch is “consulting with members on tax extenders and hopes to act sooner rather than later, though no clear path has been set yet.”
Grassley agreed there’s momentum for moving quickly on extenders.
“I got the feeling from a conversation this week with people that included Senator Hatch that they’re going to try to have a much earlier markup or get action on it much earlier than last year,” he said.
Renewable backers may have gotten a boost with yesterday’s release of a report by a bipartisan Finance Committee working group that emphasized the need for certainty for energy taxes, which in the case of the PTC, has been on again, off again for years.
“The impact of this uncertainty is sometimes exacerbated by the fact that project development timelines span multiple years, during which tax incentives may expire and then be reinstated after protracted legislative wrangling,” states the report by Sens. John Thune (R-S.D.) and Ben Cardin (D-Md.). “Regardless of source or technology, energy tax policies – like tax policies generally – should be stable and predictable.”
However, with free-market, small government groups intent on keeping the PTC out of the tax code, securing an extension may be especially difficult in the GOP-led Congress.
Grassley said he’s concerned that efforts to pare back the credits in the bill could sink the whole package.
“I think there’s always a desire to trim it back, but I think it’s kind of a case that if one goes they’re all going to go,” he said.
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