Final bill likely quiet on energy controversies

Source: Geof Koss, E&E News reporter • Posted: Wednesday, December 13, 2017

Republican senators said yesterday the final tax overhaul they hope to send to President Trump before Christmas will likely defer decisions on a number of outstanding energy issues until a separate tax extenders bill emerges.

Republicans said yesterday they were closing in on a final deal on the first major tax rewrite in three decades, with votes expected next week. The House-Senate conference committee meets this afternoon for opening statements.

“We are getting close,” said Sen. John Thune (R-S.D.), a member of Senate leadership and a tax conferee. “It’s hard to predict with any certainty how these things go because you think you are done, then something at the last minute pops up and you are addressing some unforeseen issue.”

Sen. John Hoeven (R-N.D.) said yesterday that disputed provisions in the House bill that target the renewable production and investment tax credits would likely be jettisoned over fears of losing the support of wind- and solar-friendly GOP senators.

“We’ve got to be careful not to cost ourselves votes on the tax relief bill,” he told E&E News yesterday. “We’ll see what comes out of conference, but the general sense, at least I got, was that’s why we probably won’t get into a number of those issues in this bill, we’ll just focus on the tax relief.”

Asked about the energy provisions, Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) said negotiators “are trying to knit it all together.”

But the senator said she too believes there will be an extenders package that “will incorporate much of the concerns, whether it’s wind or solar or the nuclear PTC” — referencing the House’s nuclear production tax credit that is absent from the Senate bill.

Murkowski — also a conferee — told reporters her conversations with leadership had produced “an indication of a very clear desire to resolve the extenders,” although the timing was unclear.

Thune told reporters the energy taxes “could hitch a ride on whatever that year-end spending bill is.”

While the Senate’s tax bill was largely silent on energy matters, one vexing issue is the measure’s base erosion anti-abuse tax (BEAT) provision, which renewable sectors say would force foreign investors to pay a 100 percent tax on money spent in U.S. renewable projects (E&E Daily, Dec. 8).

Sen. Cory Gardner (R-Colo.) said yesterday he’s still working with Sens. Chuck Grassley (R-Iowa) and Dean Heller (R-Nev.) on a fix.

“It’s more of a general business credit issue than anything, and I think that’s how we’re trying to approach this,” he told E&E News.

Gardner called an amendment he filed to the tax bill that never got a vote “kind of the basis of our conversations” but said there would likely be changes that reflect the focus of approaching it from a general business credit standpoint.

“We hope to have some solid progress on that,” he said. If that effort fails, Gardner said he would look to a tax extenders bill as a vehicle for a fix.

‘Renewable assault’

Senate Democrats yesterday slammed both the House and Senate tax bills as part of a fossil fuel conspiracy to undermine renewables, detailing their concerns in a letter to conferees ahead of this afternoon’s inaugural meeting.

“The renewable sector is a unique target” of the Republican tax reform push, said Sen. Sheldon Whitehouse (D-R.I.).

He criticized House Republicans for wanting “fundamental changes” to the 2015 tax deal that extended the renewable production and investment tax credits that have been a boon for wind and solar.

“That was a deal that was made,” Whitehouse said during a press conference, noting that Democrats supported the repeal of the decades-old crude oil export ban in exchange.

The House bill would repeal an inflation adjustment for the PTC, reducing its value by nearly a third, while adding construction requirements to qualify.

Of the BEAT provisions in the Senate bill, Sen. Ed Markey (D-Mass.) said they would “beat down clean energy in the United States.”

Should a tax extenders bill materialize, Markey said they would work with Republicans “to create a bipartisan fix to each and every one of these provisions, not one of them, all of them.”

However, Sen. Ben Cardin (D-Md.), a Finance Committee member, said parts of both GOP tax bills are already hampering investment in renewables, creating further uncertainty if any of them become law.

“When we get around to a general tax extender dealing with the energy sector, we don’t know,” he said. “It could be months. It may not happen.”

Whitehouse said there is $20 billion in renewables “frozen now just from the prospect of this legislation, until it gets cleared up.”

He called on Republican supporters of renewables to oppose the final tax bill if the disputed renewable provisions remain intact, noting the current lack of an actual tax extenders bill.

“This is the moment, this is the bill, and if Republicans disagree with this assault on the renewable sector, this is their time,” Whitehouse said.

Reporter George Cahlink contributed.