End-of-year energy tax negotiations have taken on a more upbeat tone in recent days, with top tax writers from both parties expressing growing confidence a deal to extend expired energy tax breaks and expand a few existing clean energy credits can be struck in the coming weeks.
Following what he called a “fruitful” Wednesday meeting with Senate Finance Chairman Chuck Grassley (R-Iowa), House Ways and Means Chairman Richard Neal (D-Mass.) said he was optimistic that an agreement to revive and extend an assortment of lapsed energy tax breaks is within reach.
“The chemistry is good,” Neal told E&E News on Wednesday afternoon. “I want to get it done.”
Furthermore, Neal said he was convinced that some of the provisions from the comprehensive energy tax package Ways and Means Democrats unveiled this week – the “Green Act” – could be part of a year-end deal (Greenwire, Nov. 19).
“Not even in doubt,” he said, adding, “The timing’s right.”
Grassley told E&E News yesterday that the pair had a “productive meeting” and that he shared Neal’s optimism on the prospects of reaching a year-end deal but declined to discuss details.
Grassley expressed a desire to “embolden” ongoing Finance and Ways and Means staff negotiations on extenders “to be more aggressive and to reach an agreement.”
Both Neal and Ways and Means Committee ranking member Kevin Brady (R-Texas) this week sketched out a rough framework for an accord that would address the more than two dozen expired or soon-to-lapse extenders, “technical corrections” to the 2017 GOP tax law overhaul that Republicans are anxious to fix, as well as provisions from House Democrats’ “Green Act.”
Brady told reporters Wednesday that it was possible some renewable provisions of the “Green Act” could be part of a year-end deal.
“I expect the extenders package, if it occurs, to be relatively tight, but I think there could be room for that,” he said.
“I think the key here on the extenders is, as long as the whole galaxy is being considered for the extenders package, not much will get done,” Brady said. “If it is focused on the extenders, technical corrections and perhaps some renewable policies, I think you’ve got the makings of an agreement.”
However, Brady added that Republicans would want to see “reforms.” “We’re not simply extending, changing the dates and extending them a couple of years back and the year forward,” he said.
Provisions in play?
Both parties are trying to keep a year-end extenders deal focused so it doesn’t collapse under its own weight, but lawmakers and lobbyists are signaling that provisions from the “Green Act” that are in play include:
• A multiyear extension and phaseout of the biodiesel tax credit.
• An expansion of the electric vehicle tax credit.
• Extensions and broadening of the investment tax credit.
Ways and Means member Dan Kildee (D-Mich.) said one possible compromise includes the biodiesel break and his language that would raise the per-manufacturer cap on EVs from the current 200,000 vehicle ceiling to 600,000, while reducing its maximum value from $7,500 to $7,000.
“We feel really strongly about EVs,” Kildee said of Democrats. “Grassley’s got to have biodiesel. I think it’s a possibility.”
Neal told E&E News this week that biodiesel is a “bargaining chip,” while also noting his own support for the EV credit. He declined to discuss specifics of his conversation with Grassley but said it covered the full range of extenders.
The expansion of the EV credit is strongly opposed by Republican senators such as John Barrasso (R-Wyo.) and small-government advocacy groups like the American Energy Alliance, which ran a full-page ad in The Wall Street Journal this week urging GOP senators to oppose efforts to expand the break.
In a statement, AEA President Thomas Pyle said the EV expansion “would essentially enrich two auto companies, GM and Tesla, along with wealthy coastal elites, mainly from California and New York.”
“It’s now up to the Republicans in the U.S. Senate to stop the madness,” Pyle said. “No deals, no extensions.”
However, at least two Republican senators – Maine’s Susan Collins and Lamar Alexander of Tennessee – are co-sponsors of that chamber’s version of Kildee’s bill.
‘Get something done’
Other provisions said to be in play in year-end talks include extensions of the ITC and production tax credit, both of which are scheduled to phase out under a 2015 law but would live on for a few more years under the “Green Act.”
Led by Rep. Mike Levin (D-Calif.), more than two dozen House Democrats this week urged Speaker Nancy Pelosi (D-Calif.) to prioritize an ITC extension for an array of power sources in year-end negotiations.
Expanding the ITC to include storage is also a top priority for many Democrats and interest groups. That position was echoed in an Oct. 30 letter to Neal that was released yesterday by Democrats on the House Select Committee on the Climate Crisis that also called for EV credits and incentives for on- and offshore wind production to be part of the talks.
Most of these provisions enjoy some degree of bipartisan support from members in both chambers, a fact noted by Ways and Means member Earl Blumenauer (D-Ore.) yesterday to argue that a deal to enact some “Green Act” provisions before the end of the year is “absolutely” within reach.
“People want to get something done,” he said.
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