The Senate Finance Committee voted today to grant a reprieve to an assortment of expired energy tax credits, after wind opponents withdrew amendments targeting the renewable production tax credit.
On a 23-3 vote, senators approved the extenders package, which revives 52 on-again, off-again tax breaks for two years. Sens. Dan Coats (R-Ind.), Mike Enzi (R-Wyo.) and Pat Toomey (R-Pa.) were the lone votes in opposition.
Finance Chairman Orrin Hatch (R-Utah) opened the markup by urging his colleagues to focus on “relatively noncontroversial changes to recently expired tax provisions and the offsets needed for these changes.”
Senators largely complied with Hatch’s request, but many spoke at length on the debate over renewable energy credits.
After denouncing the PTC as a costly subsidy that harms job creation by pushing up energy prices, Toomey offered and withdrew his amendment to strike the credit from the bill. “I know we don’t have the votes for it in this committee,” he said, arguing the $10 billion cost over 10 years of a two-year extension was money poorly spent.
Coats similarly withdrew his own proposal to scale back the value of the PTC starting in 2016, after conceding a lack of support for the plan. “I’ll withdraw this for now, but Senator Toomey and I will be back,” he warned.
Sen. Rob Portman (R-Ohio) discussed his own amendment that would reduce the PTC’s value over time before eliminating it completely in 2019. The proposal would also eliminate the investment tax credit by 2019 but would allow solar projects to claim the credit if they break ground before 2019.
Portman withdrew the amendment without seeking a vote but noted support in both parties for winding down the credits. “I feel like this is a place where we can find some common ground,” he said, suggesting both incentives should disappear by 2020. “I think we should set ourselves on a course to phase out and eliminate both.”
The committee accepted by voice vote an amendment by Sen. Chuck Grassley (R-Iowa) that would convert the existing blenders credit for biodiesel to a $1-per-gallon production tax credit applicable to U.S.-produced fuel.
Senators also discussed a handful of other energy-related amendments that were withdrawn.
Sen. Tom Carper (D-Del.) offered an amendment that would allow stationary fuel cells to qualify for the investment tax credit if they “commence construction” before the end of 2016. The tweak would help fuel cell projects compete with wind, solar and other renewables, Carper argued.
In withdrawing the amendment, Carper noted ongoing discussions between Sen. Dean Heller (R-Nev.), Hatch and a few Democrats on a separate proposal that would base ITC eligibility on construction starts.
But Heller signaled that objections among the committee stymied efforts to get the amendment into the bill. “I’m disappointed … that we can’t reach consensus on language that will truly give parity” to solar, he said.
“We’re going to work together on this,” Hatch responded.
Sen. Ben Cardin (D-Md.) discussed an amendment that would alter the 179D deduction for energy efficiency upgrades to allow certain corporations, partnerships and real estate investment trusts to take full advantage of the deduction. Cardin withdrew the proposal in part because of the lack of adequate budget estimates.
A modified chairman’s mark released shortly before the markup made several changes to energy incentives.
The revised bill expands the credit for nonbusiness energy property to include roof products that meet Energy Star program guidelines, as well as installation costs. Another change allows tribal governments and nonprofits to receive the efficiency commercial buildings deduction as is allowed for public property.
The mark also allows clean coal power grants under the 2005 energy law to be excluded from gross income levels for noncorporate taxpayers if they pay 1.18 percent of the grant to the federal government. The revision, retroactive to the start of 2012, is listed as raising revenue.
Another modification would change the excise tax rate for liquefied natural gas and liquefied petroleum gas to a rate based on energy equivalency to a gallon of diesel and gasoline, respectively. The revised bill would also apply the same principle to the alternative fuel excise tax credits and outlay payments.
Reporter Daniel Bush contributed.