PTC out, biofuels in extenders package to be marked up Thursday
In a bipartisan package released today, Wyden and Hatch proposed two-year extensions for 42 temporary tax incentives that expired in December and another two set to lapse at the end of this year, down from 55 breaks that won renewal the last time Congress enacted an extenders bill. The extenders provide incentives for a variety of individuals and businesses, ranging from letting teachers deduct the cost of school supplies to adjusting how taxes are calculated for owners of racehorses.
Among the most significant of the eight energy-specific provisions included in the proposal is an extension of the $1.01-per-gallon advanced biofuels tax credit and a similar set of $1-per-gallon biodiesel credits.
A representative of the cellulosic biofuels industry cheered its inclusion in the proposal, saying quick extension of the credit is key to keep companies operating in the United States.
“Timing is very important. These provisions have already expired and executives in our industry are weighing the pros and cons of developing projects here or abroad,” Brooke Coleman, executive director of the Advanced Ethanol Council, said in an email. “Congress cannot afford to allow taxes to increase on one of the most innovative industries in the world, especially against the backdrop of permanent tax breaks to oil and gas.”
As for the wind industry, the PTC does not lack for supporters on the Finance Committee and is expected to be added back to the package when it is marked up later this week. Still, the credit has attracted more opposition from conservatives than in previous years and is expected to face resistance from Republicans in the House and on the Senate floor.
When the committee last considered extenders legislation in 2012, the first draft from then-Chairman Max Baucus (D-Mont.) also did not include a PTC extension, but the credit ultimately was renewed and expanded in a second version of the bill, which was enacted as part of a broader January 2013 bill to avoid the so-called fiscal cliff.
The bipartisan extenders package includes nine energy-specific items, down from 13 included in the 2012 package. The latest draft drops the $23-per-megawatt-hour PTC and a parallel allowance for renewable developers to instead claim a 30 percent investment tax credit (ITC), an incentive particularly prized by the offshore wind industry.
This time around, Republicans objected to including a PTC extension in today’s bipartisan proposal, a committee aide said. But Wyden supports an extension, and it is expected to be addressed at Thursday’s meeting. Sen. Chuck Grassley (R-Iowa), one of the credit’s strongest supporters, predicted the credit would prevail in the end: “We’re going to win either way,” Grassley said in a brief interview yesterday evening.
Wind developers aren’t sweating yet.
“We’re optimistic with the Senate Finance Committee that we have the votes we need to get into the bill the committee passes,” said Rob Gramlich, senior vice president for public policy at the American Wind Energy Association.
Other credits that didn’t make the cut were the Section 25C efficiency credit, which supported home weatherization and related activities; a credit for manufacturers of efficient appliances; and deferral of rules related to transmission property sales to implement Federal Energy Regulatory Commission or state restructuring policies.
In addition to the biofuels credit, the Wyden-Hatch proposal would renew incentives for refueling infrastructure for alternative-fuel or electric vehicles, the purchase of electric motorcycles, production of coal on Indian lands, construction of new energy-efficient homes and alternative fuels. It also would extend bonus depreciation allowances for advanced biofuels. All of those provisions expired at the end of last year and would be reinstated through 2015. The draft also would extend a credit for new fuel-cell vehicles that otherwise would expire at the end of this year.
Steven Nadel, executive director of the American Council for an Energy-Efficient Economy, said in an email that he was pleased to see the new home credit included and said his group’s next top priority is renewing the 179D credit that benefits efficient commercial buildings, which expired at the end of last year. He said he was unsurprised by the absence of the appliance credit given the lack of a lobbying push by appliance makers.