RENEWABLE ENERGY: Senate passes bill with tax credit extensions, but endgame uncertain April 10, 2008Posted by Laura Arnold in Uncategorized.
Reprinted from Greenwire.
RENEWABLE ENERGY: Senate passes bill with tax credit extensions, but endgame uncertain (04/10/2008)
by Ben Geman, Greenwire senior reporter
The Senate voted 88-8 today to include roughly $6 billion worth of renewable energy and efficiency tax credits in a major housing bill the chamber passed shortly thereafter, but it remains unclear how or when a deal with the House may emerge.
The amendment, sponsored by Sens. Maria Cantwell (D-Wash.) and John Ensign (R-Nev.), extends credits for wind, solar and other renewable energy projects that are set to expire at year’s end.
The Cantwell-Ensign plan was included in a bill aimed at addressing the subprime mortgage crisis that the Senate passed 84-12. However, the White House yesterday attacked several provisions in the Senate plan, and the House is crafting its own housing bill.
The bill includes a one-year extension of the renewable power production tax credit that wind developers call essential to continued growth and an eight-year extension of the solar investment tax credit. It also provides one- or two-year extensions of credits for efficient homes and buildings, and several years’ worth of credits for the manufacture of energy-efficient dishwashers, clothes washers and refrigerators.
But the measure does not include revenue-raising provisions to offset the costs, which sets up a potential collision with House Democrats who want to adhere to pay-as-you-go rules. Cantwell, speaking before the vote, urged colleagues in the other chamber to adopt the Senate plan and referred to it repeatedly as a “stimulative” measure.
Congress approved — and President Bush signed — an economic stimulus plan earlier this year that was not offset. Cantwell wants colleagues to see the renewable energy credits in the same light, arguing they will preserve and create “green jobs” and prevent billions of dollars in renewable-sector investments from drying up.
The House in late February approved a much larger energy tax package that included renewable power, efficiency, biofuels and other provisions. The costs are offset by repealing tax breaks for large oil companies. But this approach — which the House has endorsed repeatedly over the past year — has faltered in the Senate amid GOP-led filibusters and faces White House veto threats.
“This is our bipartisan chance to have renewable energy in this country in a big way,” Ensign said before the vote.
Nonetheless, earlier this week, a spokesman for House Speaker Nancy Pelosi (D-Calif.) said in an e-mail, “We are committed to pay-as-you-go in our effort to restore our nation’s fiscal responsibility and strongly support the House-passed legislation.”
Cantwell, before the vote, said continued wrangling over offsets would jeopardize renewable energy projects by creating uncertainty about the tax credits. Investment in wind power projects has plunged in the past when lawmakers have allowed the production tax credit to lapse.
She argued that passage of the current plan would provide breathing room to work on revenue sources to support longer-term extension of renewable energy and efficiency incentives. “We have plenty of time for the rest of the year to really talk about how we are going to make green energy tax credits a priority in our nation’s tax code so this industry can really take off and provide the certainty and predictability we need,” she said.
Before approving the Cantwell-Ensign plan, lawmakers rejected a proposal by Sens. Lamar Alexander (R-Tenn.) and Jon Kyl (R-Ariz.) to extend the renewable production tax credit for two years, rather than one, but lower the value of the credit for wind projects. The vote was 15-79.
Meanwhile, Sen. Max Baucus (D-Mont.) told reporters Tuesday that he will probably unveil an energy tax package he is crafting next week. The senator — who wants to include as-yet-unspecified offsets — said the package would be “significant” when asked about the size. Baucus said it will probably be included in a broader tax package he is preparing.