Orphans,’ nuclear, renewables, CCS make the cut in Senate’s extenders bill

Source: Geof Koss and Christa Marshall, E&E News reporters • Posted: Thursday, December 21, 2017

An assortment of energy incentives cherished by members of both parties would be temporarily renewed under a broad tax extenders package unveiled in the Senate yesterday but will most likely have to wait until January to find their way into law.

The package, introduced by Finance Chairman Orrin Hatch (R-Utah) and committee Republicans, would extend an assortment of efficiency, biodiesel and renewable incentives that expired at the end of 2016 through the end of 2018.

The bill adds fuel cells, small wind, combined heat and power facilities, and other orphaned sources left out of the 2015 deal to the same phaseout schedule that law gave to wind and solar through production and investment tax credits.

Additionally, it would extend the nuclear production tax credit that is crucial for Georgia lawmakers. The office of Speaker Paul Ryan (R-Wis.) recently assured the head of the Georgia Public Service Commission that the nuclear credit would be addressed (Greenwire, Dec. 19).

Energy interests have been pressing to see the extenders bill added to the continuing resolution that must be passed before tomorrow to prevent a government shutdown. Sen. John Thune (R-S.D.) said yesterday, however, that extenders would most likely have to wait for January.

“That’s looking more like what’s going to happen, unfortunately,” Thune told E&E News. “I think to try to get this thing transacted here in the short amount of time that we have to work with, I think it’s going to be hard to pull together all the various threads that we’re trying to get done.”

Rep. Kenny Marchant (R-Texas), a member of the Ways and Means Committee, said an extenders package would be “our first priority when we get back.” He noted lawmakers were close to a bipartisan deal this week on health care extenders, but it could not be finalized with so many other year-end issues in play.

Marchant, an energy industry ally, said the talks did not include any discussion of extending or expanding renewable energy tax credits.

“I am fine with the current law, I don’t want to hurt” clean energy companies, said Marchant, adding he does not see a reason to make renewable energy tax breaks part of an extenders package next year.

CCS boost

The Senate bill also includes language backed by a bipartisan group of senators to more than double existing tax credits for storage of captured carbon dioxide.

The bipartisan “Furthering Carbon Capture, Utilization, Technology, Underground Storage and Reduced Emissions (FUTURE) Act” was introduced at a press conference in July with Sens. Heidi Heitkamp (D-N.D.), Shelley Moore Capito (R-W.Va.), John Barrasso (R-Wyo.) and Sheldon Whitehouse (D-R.I.) (E&E Daily, July 13).

It would increase the credit value to $35 per metric ton for CO2 used in enhanced oil recovery and $50 per metric ton for CO2 stored in geological formations.

Advocates say existing tax credits are too low to provide incentives for carbon capture and sequestration projects and that there is not enough certainty in the existing program, which is capped.

Heitkamp said she was reviewing the bill to ensure there “aren’t any provisions added that could break the broad bipartisan coalition” and derail the package.

“I’ll work with Senate leadership and the Senate Finance Committee to ensure that our bill does not fall prey to partisan provisions that touch on issues outside of what we introduced earlier this year and pushed to include in this package,” Heitkamp said.

However, the tax extenders language includes CCS language from Sen. John Hoeven (R-N.D.) and others that was opposed by some supporters of the Heitkamp bill. They say it weakens rules on how CO2 is monitored and stored (E&E Daily, Aug. 3).

Hoeven says the changes are needed to clarify that enhanced oil recovery operations wanting to tap CCS tax credits are not subject to strict guidelines meant for non-EOR geological storage of CO2. The language would improve access to the tax credits, he said.

“This is an important step in the development of CCS technologies,” Hoeven said. “I appreciate the Senate Finance Committee for working with us on this priority, and I look forward to advancing our legislation as part of the larger tax extender bill.”

Reporter George Cahlink contributed.