Pressure grows for longer energy extensions

Source: Geof Koss, E&E News reporter • Posted: Thursday, November 29, 2018

Democrats and renewable energy advocates are calling for multiyear extensions of an assortment of energy tax breaks enacted during the lame-duck session, after House Republicans unveiled a plan to retroactively extend the incentives only for 2018.

The House will vote Friday on a broad tax package that includes more than a dozen energy tax breaks, along with technical corrections to last year’s tax overhaul and temporary tax breaks for victims of recent natural disasters (Greenwire, Nov. 27).

Except for a multiyear extension and phaseout of the biodiesel and renewable tax break, the House GOP bill would extend the expired energy credits only for 2018, rendering them expired again at the end of the year.

The American Council on Renewable Energy (ACORE) noted yesterday the extension for 2018 comes after investment decisions for the year have already been made.

“The proposal thus fails to provide any incentive for future investment, even as that is supposed to be the purpose of the credits,” said Todd Foley, the group’s senior vice president of policy and government affairs, in a statement.

“At a minimum, the credits for these technologies should be extended through the end of 2021 to provide a stable business planning horizon,” Foley said. “The present tax situation for these renewable energy technologies has created uncertainty and confusion for industries that support hundreds of thousands of jobs in the U.S. economy.”

Sen. Ben Cardin (D-Md.), a member of the Finance Committee, said yesterday he would also like to see longer extensions for the energy credits.

“I’d rather have more than one year,” he told E&E News. “Obviously one year doesn’t give you a lot of time cause you’re right back where you were starting next year.”

While he would prefer to see longer extensions, Cardin added that “it would be worse not to have any.”

The House bill is not expected to be the last word on the matter in the lame duck but a starting point for negotiations with the Senate. With Democrats set to take control of the House next year, they have additional leverage during the closing debate this year.

Sen. Ron Wyden (D-Ore.), the ranking member on the Senate Finance Committee, heaped criticism on the House GOP plan yesterday, telling reporters that Democrats learned about the package from media accounts.

“They go off and do everything they want, everything on their wish list,” Wyden told reporters. “And then their strategy is to see if they can persuade a few Democrats into coming over. That didn’t work before and it isn’t going to work now.”

But Ways and Means Chairman Kevin Brady (R-Texas) dismissed the criticism.

“I would respectfully disagree, just as we reached out to our Democratic colleagues on the Ways and Means Committee, our understanding is that Senate Finance Republicans did the same with their counterparts,” he told reporters. “We’ve always found that to be a good approach on this.”

While Brady worked with Sen. Chuck Grassley (R-Iowa) on the biodiesel phaseout, the incoming chairman of the Finance Committee signaled he wasn’t entirely behind the one-year extensions for other energy breaks in the House bill.

“In some areas it’s not as good as it should be,” Grassley told E&E News yesterday. “It doesn’t give long-range planning, but I presume some of those Brady would like to do away with.”

Grassley said he hopes the Senate will support the biodiesel phaseout, which he called a “very fair offer.”

“But it probably won’t go unless the whole tax bill goes, or at least all the extenders go,” he added.

Lawmakers also face pressure to add or modify other energy-related breaks as well.

The House bill does not include a modification to allow energy storage to qualify for the investment tax credit, as a coalition of energy groups urged earlier this week.

There are also calls for Congress to modify or outright eliminate a break for electric vehicles (Greenwire, Nov. 20).

Brady signaled lawmakers are unlikely to do either to the EV credit in the lame duck. “I don’t anticipate any action on that this session,” he said.