Fate of renewables credits uncertain in House Committee

Source: Geof Koss, E&E News reporter • Posted: Thursday, November 9, 2017

With the House and Senate poised to take significant steps on tax reform today, the fate of key tax credits for renewables remains a question mark.

The House Ways and Means Committee will meet at 9 a.m. to finish marking up its bill, which hews to the schedule for phasing out the production and investment tax credits laid out in a 2015 law.

However, the measure would also reduce the value and impose new qualification requirements for projects, while eliminating a long-term solar credit at the end of 2027.

The Senate’s bill, coming later today, is expected to be friendlier to renewables, with Finance Republicans from windy Midwestern states pressing for the 2015 production tax credit (PTC) and investment tax credit deal to be honored. The bill was still a work in progress last night.

The Governors’ Wind and Solar Energy Coalition yesterday urged Ways and Means leaders to rethink the House bill’s treatment of the two credits, noting that the 2015 deal “has spurred important private investment and job creation in our states.”

“The terms of H.R. 1 would put that economic activity at risk, and would hurt families,” wrote Rhode Island Gov. Gina Raimondo (D) and South Dakota GOP Gov. Dennis Daugaard to Ways and Means Chairman Kevin Brady (R-Texas) and ranking member Richard Neal (D-Mass.).

Since the legislation would extend a key tax credit for nuclear plants, “it should also extend the tax credit eligibility for offshore wind development that has the potential to create thousands of new jobs and a new American industry,” the governors wrote.

More than a dozen House members from both parties yesterday called for the 2015 deal on the PTC to remain intact in a letter to the top tax writers from both parties.

“By changing the terms of the phase-out of the wind energy PTC agreed to by Congress two years ago, we are unnecessarily injecting uncertainty for consumers, manufacturers, and businesses and their employees,” wrote 15 House members, led by Reps. David Young (R-Iowa) and Elise Stefanik (R-N.Y.).

Seventeen major environmental groups also weighed in against the bill yesterday.

“This plan would lavish huge and permanent tax cuts to the richest 1% and corporate polluters that are destined to be paid for by the health and environmental well-being of communities across the country,” wrote the Natural Resources Defense Council, the Sierra Club, the League of Conservation Voters and others.

“The plan puts at risk our clean energy future by preserving tax breaks for dirty energy sources while slashing them for cleaner forms of energy.”

The groups’ letter also denounced the expectation that the tax bill will eventually “hand over the pristine and sacred Arctic National Wildlife Refuge to exploitation by Big Oil.”

Democrats protested last night after Brady announced he planned to recess the markup until this morning, when he’s expected to introduce a new version of the reform bill that aims to close a $74 billion hole opened by earlier revisions.

He declined to say whether the latest version would include a repeal of the Affordable Care Act’s individual mandate, which conservatives have been eyeing as a revenue raiser to ease the bill’s passage in the House.

The crush for revenue makes it an even more uphill fight for any Democratic amendments that would restore the 2015 renewables deal.

Additionally, Neal signaled yesterday that Brady’s decision to end early last night would deprive Democrats of the opportunity to offer around 60 amendments they considered essential.

“We have a lot of amendments we’d like to put forward,” Neal said. “We’re willing to work into the night.”

Senate’s ‘conceptual’ proposal

Senate Republicans are expected to huddle this morning to discuss that chamber’s tax proposal, which is expected to be released later in the day.

However, a Senate Finance Committee Republican aide said bill text will not be released; instead, a “conceptual” chairman’s mark describing the policy changes accompanied by explanatory information from the Joint Committee on Taxation would be unveiled.

That mark will provide the basis for next week’s markup, with members able to offer amendments. At the end of the markup, bill text is reported with a score reflecting changes made in committee.

Senators late yesterday continued to press their tax preferences, including Michigan Democrat Gary Peters, who urged Finance Chairman Orrin Hatch (R-Utah) to continue the electric vehicle tax credit zeroed out in the House version (Climatewire, Nov. 7).

“The American middle class was shaped in the 20th century by the mass production of combustion engine automobiles,” Peters wrote.

“A new generation of jobs and families will be supported by electric vehicles. Eliminating important economic incentives for electric vehicles would be a step in the wrong direction.”

House Freedom Caucus Chairman Mark Meadows (R-N.C.) predicted that the completion of the House markup and the release of the Senate bill would produce a rush of lobbyists to Capitol Hill tomorrow and Monday, which he called “critical.”

“Then, all of a sudden, you’re going to see all kinds of ‘We want that provision; we don’t want this provision,'” he told reporters this week.

Reporter George Cahlink contributed.