The incoming chairman of the U.S. Senate Finance Committee says working to renew a slew of expired tax breaks, including the production tax credit (PTC), will be one of his first priorities when he takes office.
Sen. Ron Wyden, D-Ore., is slated to take over the chairman role for former Sen. Max Baucus, D-Mont., who was recently confirmed as the U.S. ambassador to China. Wyden recently told reporters, “My sense is that the focus at the outset is likely to be the extender package.”
The so-called extender package includes over 50 tax provisions that expired at the end of 2013, one of which was the PTC. Keith Martin, a partner at law firm Chadbourne & Parke, tells NAW that it’s likely that the package will get passed but not until the last half of this year.
“Wyden is replacing the senior staff on the Senate Finance Committee. It will take time for them to settle in,” he says.
In addition, Martin expects U.S. Senate Majority Leader Harry Reid, D-Nev., will avoid presenting the extender as stand-alone legislation.
“He usually needs something to propel such a bill forward, like doing it in the context of budget reconciliation where special rules limit debate or as a rider to some other must-pass legislation or because Congress is at the end of the session and eager to get home,” Martin explains.
He also warns that outside opposition to a PTC extension for wind is better organized “than ever before,” and the Republican-controlled House of Representatives will likely follow suit and stand against the tax incentive. Nonetheless, Martin believes the extenders will eventually pass after both houses of Congress negotiate.
Furthermore, Martin bets that the construction-start deadline for the PTC will be extended for at least a year and suggests, “Companies should start planning how to incur at least five percent of the cost of more projects this year and be ready to pull the trigger when the extenders pass.”
U.S. Sen. Lamar Alexander, R-Tenn., recently told energy regulators that not renewing the wind production tax credit (PTC) “would help to produce new jobs because subsidizing wind drives up costs, undercuts reliable electricity and chases away jobs.”
In an address to the National Association of Regulatory Utility Commissioners, Alexander said, “We are at a fork in the road that will determine whether our country can compete for good jobs in a 21st-century economy. The surest path toward cheap, clean, reliable energy is to end Washington’s obsession with wasteful energy subsidies and rely instead on free enterprise and government-sponsored research.
“The right first step on that path is to not renew the massive wind production tax credit. Or, we can take the path of Germany, subsidizing domestic wind and solar and buying energy from other countries as part of a costly cap-and-trade scheme that drives up the cost of electricity and chases away jobs,” he said.
Alexander claimed that U.S. wind subsides are so generous that, in some markets, wind producers can “give their power away and still make money.” This undercuts more reliable and affordable forms of energy, such as nuclear and coal plants, he added.
The senator cited a study by the Center for Strategic and International Studies, which found that such “negative pricing” tied to wind subsidies could close as much as 25% of the nation’s nuclear plants by 2020.
“Nuclear power today is 60 percent of our clean, cheap, reliable electricity,” he said. “Think of what could happen with blackouts and lost jobs if as much as 25 percent of nuclear power disappeared within six years.
“The United States uses 20 percent of all the electricity in the world. We need reliable, cheap power and lots of it, not expensive power that only is available when the sun shines and the wind blows,” he continued.
Md. Seek Comments
For Offshore Wind
The Maryland Public Service Commission has retained law firm Kaye Scholer and subcontractors Levitan & Associates Inc., DNV GL and Sullivan Cove Consultants to provide assistance to the commission staff in developing regulations to implement the Maryland Offshore Wind Energy Act of 2013 that will facilitate the development of offshore wind energy in Maryland’s coastal waters.
According to Kaye Scholer, the regulations shall establish the offshore wind facility’s project application requirements and criteria that the commission shall consider in evaluating and comparing proposed projects. These regulations will incorporate best practices and lessons learned from offshore wind project efforts in other states and countries.
New Farm Bill
On Feb. 7, President Barack Obama signed into law the Agricultural Act of 2014, also known as the Farm Bill. Among a variety of provisions meant to help support rural Americans, the legislation includes $881 million in mandatory funding for the Energy Title program.
The revamped Rural Energy for America Program (REAP), part of the Energy Title, will allocate $45 million in each fiscal year from 2014 through 2018 to offer grants and loans to rural businesses and agricultural producers to fund energy efficiency and renewable energy projects, including solar and small wind power systems.
Applications for REAP funding are to be evaluated under a three-tiered approach: projects costing $80,000 or less, those over $80,000 but less than $200,000, and those costing $200,000 or more. The Energy Title also provides funding for biofuel programs.
Renewable energy advocates have praised the Farm Bill’s passage. For example, Lloyd Ritter, co-director of the Agriculture Energy Coalition, says, “By making modest investments in renewable energy, energy efficiency and renewable chemical technology, the five-year Farm Bill … will have major benefits for energy security, economic growth and environmental gains across the entire United States.” w
Senator For PTC Extension...
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