No to phony clean coal credits, yes to refundable, renewable tax credits
The green stimulus is beginning to take shape with mostly good stuff in the stocking, except one big lump of coal.
Congressional leaders and Obama advisers are looking at including as much as $25 billion of energy tax credits in the economic stimulus package in an effort to bolster renewable energy projects, fuel-efficient cars and biodiesel production, said sources familiar with the negotiations …
The main elements under consideration include a two-year, $8.6 billion extension of the production tax credit [PTC] for renewable energy, an item that favors wind power projects. Obama advisers are considering a proposal from the wind and solar industry that would make those credits refundable or count them against past taxes because many financial firms that provided capital for those projects no longer have taxable income and can’t use the credits.
I understand why only a two-year PTC extension is being floated from a narrow stimulus perspective, but seriously, people, it’s time for a much longer extension to give the industry firmer ground. The solar investment tax credit got an eight-year extension last year! Is there any possibility that an Obama administration with a Democratic Congress won’t eventually extend the PTC that long? So don’t play games with the industry. The idea of making the credits refundable is an important one I will elaborate on in part 2.
The bill could also include tax credits for service stations that install high-ethanol-content fuel pumps, a $7,500 tax credit for plug-in vehicles, an extension of the biodiesel credit, and one for coal-fired power plants that capture more than half of their carbon emissions or that could be retrofitted to do so later. There could also be clean-energy credits for rural cooperatives.
Apparently someone missed the memo that plug-ins already have a $7,500 tax credit — which in any case won’t be doing much stimulating since there aren’t any plug-ins to stimulate!
Memo to Dems: Please, please, please, do not give a tax credit to any coal-fired plants “that could be retrofitted” for capturing carbon. So-called “capture ready” coal plants are nothing but snake oil, just like clean coal itself.
Congress does not want to be in the business of trying to pass regulations to determine
how many angels are dancing on the head of a pin whether it might be easier or harder for some new climate-destroying coal plant to some day integrate carbon capture. Either a new coal plant captures and permanently sequesters the vast majority (not just half) of its carbon emissions now, or it should not be permitted in the first place. Stop trying to fool the public into thinking we can risk building any more new coal plants with unrestricted greenhouse gas emissions. We cannot.
One of the most exciting stimulus proposals is aimed at boosting clean-energy financing during this credit crunch:
The stimulus package may also establish a federally funded National Clean Energy Lending Authority, an idea that has been promoted by Rep. Chris Van Hollen (D-Md.) and Rep. Zach Wamp (R-Tenn.). The agency would receive as much as $10 billion to $20 billion and would extend low-interest loans or loan guarantees to renewable energy projects in an effort to mobilize private capital. If successful, Van Hollen said, the agency could become self-sustaining.
The pair also proposed the establishment of a revolving fund to help finance energy-efficiency improvements by homeowners.
E&E Daily ($ub. req’d) has some more details:
The proposed National Clean Energy Lending Authority would provide loan guarantees and other financing to credit-worthy projects that have attracted some equity capital and can meet private-sector lending criteria, states the letter from Van Hollen and Wamp, who are co-chairs of the House Renewable Energy and Energy Efficiency Caucus.
The new bank, which would have its own board and be independent from other agencies, should receive an initial authorization of $20 billion in two annual installments of $10 billion, the lawmakers said, enough to have a “major impact on the viability of many existing renewable energy projects.”
Other lawmakers have also called for some form of new federal corporation to help finance renewable energy projects and other types of facilities.
Bingaman introduced a bill last year calling for a 21st Century Energy Deployment Corporation, a quasi-independent corporation with Energy Department oversight. It would employ various techniques to provide and back up financing secured on the private market, in order to help developers get capital for projects in areas such as clean power generation, fuels and vehicles.
And now-retired Sen. Pete Domenici (R-N.M.) introduced a bill last year that would create a new federal investment bank for energy projects — including renewable power, coal projects with carbon controls and nuclear power — that would be modeled on the Export-Import Bank of the United States and the Overseas Private Investment Corp.
Van Hollen and Wamp also proposed a $20 million national Home Energy Savings Revolving Fund to help homeowners retrofit their homes. It would provide zero-interest loans for homeowners who invest in energy efficient lighting, windows, insulation, heating and cooling systems and other energy-saving equipment.
And here are a few more details on the whole package:
The upcoming economic stimulus bill could have an energy tax package worth between $20 billion to $25 billion …
Some lawmakers may be seeking an even higher figure. Sen. Barbara Boxer (D-Calif.), asked about the reported range under discussion, said it “may be low.”
… Sen. Maria Cantwell (D-Wash.), for instance, said she wants to see faster depreciation rates for the installation of “smart” meters designed to enable greater consumer efficiency …
Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.), who is planning a broad energy bill later this year, told reporters yesterday that he supports adding a significant number of energy provisions to the fast-moving stimulus plan.
“I think the larger the better from my perspective,” Bingaman said of the energy provisions in the stimulus bill. “I think there is a lot we can do in that area, and I am encouraging that we do as much of it as we can as part of a stimulus package.
“It would be quicker and I think the general rule is, you do all you can, when you can around here,” he added.