Tax Extensions remain on table amid heavy lobbying

Source: Geof Koss and Christa Marshall, E&E News reporters • Posted: Friday, December 2, 2016

Multiple industries are mounting a last-ditch effort to extend a handful of energy tax breaks by attaching them to must-pass spending legislation, although aides and lobbyists say the push remains an uphill fight.

Senate Majority Leader Mitch McConnell (R-Ky.) had pledged to work toward an extension of the investment tax credit for qualifying energy sources left out of last year’s deal. He is eyeing the continuing government funding resolution as a vehicle but is meeting resistance in the House, Democratic aides said this week.

One Senate staffer said McConnell approached House leaders about extending the Section 48 investment tax credit, which covers many technologies like combined heat and power and fuel cells.

Other breaks that may be under discussion are an extension of the advanced nuclear production tax credit and a proposed expanded carbon capture and sequestration tax credit that is backed by a diverse group of senators, including McConnell.

An aide said House leaders are concerned about opposition from their ranks. But the aide added: “I don’t think that that’s true. I think the CR could pass with Section 48.”

Sen. Shelley Moore Capito (R-W.Va.) yesterday once again downplayed the possibility that expanded tax credits could move this year for CCS.

“I don’t expect to see it any time in the next couple of weeks. January is going to be filled with all kinds of things. I expect it to be part of a bigger tax package,” said Capito.

Another backer, Sen. Sheldon Whitehouse (D-R.I.), said yesterday that supporters continue to push for enactment this year.

“We’d very much like to get that done,” he told E&E News, calling it “a very small step in the right direction.” But he said he was in the dark about the “internal dynamics” between House and Senate leaders.

Invoking Trump

Sen. Heidi Heitkamp (D-N.D.), a key advocate for expanded CCS allowances, laughed when asked whether she plans to talk about the subject during her meeting today with President-elect Donald Trump. She said it could come up, along with other issues of concern to North Dakota, like agriculture.

“I think we share a mutual concern about doing everything we can to preserve coal jobs, and I think this is a path forward, as I’ve said many times,” Heitkamp said.

Last year, Congress extended credits for wind and solar in a deal to end the oil import ban, but the final legislation did not cover other clean energy technologies.

Allowing tax credits to expire could lead to a collapse in sales of 50 percent or more in some industries, groups said this week (E&E Daily, Nov. 30).

One supporter of extending the ITC yesterday sought to link it to Trump’s visit to Indiana, where the president-elect highlighted his effort to preserve jobs that furnace-maker Carrier Corp. had planned to send to Mexico.

“Headlines today are heralding a deal with Carrier Corporation to keep approximately 1,000 jobs in the state of Indiana,” said Doug Dougherty, CEO of the Geothermal Exchange Organization. “But tens of thousands of jobs across the country remain on the line if Congress fails to act on the Investment Tax Credit.”

Carrier’s agreement is said to included $7 million in tax breaks by the state of Indiana — where Vice President-elect Mike Pence remains governor.

“The same thing can be done right now on a much larger scale. Using the federal tax code to incentivize American innovation and job creation, Congress can save some 10,000 well-paid American jobs in the geothermal heat pump industry alone,” Dougherty said.

“These include manufacturing positions and those employed by family-owned businesses that install this clean and efficient heating and cooling technology,” he said.

‘Top priority’

Earlier this week, Dougherty said it would have been preferable to eliminate all subsidies, rather than create “winners and losers” by extending breaks last year for solar and wind technologies.

Morry Markowitz, president of the Fuel Cell & Hydrogen Energy Association, said a recent layoff notice could be a preview of what’s to come if lawmakers don’t act. FuelCell Energy Inc. just announced job cuts.

“We are 10,000 workers strong across the country with a major supplier base in the Midwest,” said Markowitz. “At a time when voters overwhelming voted with their top priority being their economic future, why would we risk any losses?”

A flurry of letters continues to flow to Capitol Hill on the issue. Yesterday, both the Western Governors’ Association and Montana Gov. Steve Bullock (D) sent missives urging for expansion of the CCS credit (Greenwire, Nov. 2).

“Federal incentives have the potential to leverage private and state investment, harness the ingenuity of entrepreneurs and capitalize on billions of dollars’ worth of DOE sponsored research and development to enable new commercial carbon capture and pipeline projects,” said the WGA letter.