Senators call on Obama to back their proposal to spur investment
Sens. Chris Coons (D-Del.) and Jerry Moran (R-Kan.) say they are hopeful that with the president’s backing, legislation that would guarantee renewable energy firms the investment potential already afforded to traditional energy companies could garner broader support next year.
The legislation was introduced over the summer, and it would primarily allow renewable energy outfits the use of what is known as master limited partnerships, or MLPs. Coons said the legislation would “level the playing field between traditional and energy businesses.” The House offered companion legislation that received a degree of bipartisan support, but it, too, has stalled.
In a letter to the president, signed by Coons along with 24 Democrats and four Republicans, the lawmakers argued that “small tweaks to the tax code could attract billions of dollars in private sector investment to renewable energy deployment” through what they call an “all of the above” energy strategy.
“Essentially what it’s doing is taking an existing well-known, well-established statutory and thus financial structure, and opening it up to clean energy. There’s been some question as to just how broadly that’s defined, exactly what the tax consequences would be, that we might consider in ways to strengthen or broaden it early in the next Congress,” Coons said today. “My gut view is that it’s a fairly simple bill and could compel a fairly broad support.”
Since their start in the ’80s, MLPs have been limited to energy accounts for oil, natural gas, coal extraction and pipeline projects. The lawmakers’ intent, if it is signed into law, could attract a private investment component that proponents argue would “build and grow” renewable energy markets.
As Moran put it, “The financing mechanism has been very valuable to us in states like Kansas where oil and gas has a lot of play, where pipelines have used this financing mechanism over a long period of time and is proven to be very successful. And we would love to see the opportunity for other energy suppliers to be able to finance with the benefits of partnership taxation and the function of corporate identity.”
To further make their case, the lawmakers cited about a dozen policy shapers from the energy sector who have signed up in support of the measure.
Acknowledging congressional leaders will not make time for their proposal before the 112th Congress adjourns sine die, Coons said he would attempt to include MLPs as well as real estate investment trusts benefits for such renewable companies in whatever tax overhaul package the next Congress is able to advance.
While the Senate bill has yet to receive a formal cost estimate by the Congressional Budget Office, Coons said it might cost less than a billion dollars.