New Efforts in Congress to Boost Renewables

Attempt in Senate to Attach Energy Credits to Housing Bill

Gary M. Kaye 4/6/2008 - The Senate on Friday began debating whether to add a long-stalled extension of renewable energy tax credits to its bipartisan housing package, a move that could threaten the bill’s progress in the House.

Sen. John Ensign , R-Nev., and Maria Cantwell , D-Wash., offered the one-year, $6 billion extension as an amendment to the housing legislation.

Before the Senate wrapped up business for the day, Majority Leader Harry Reid , D-Nev., filed a motion to limit debate on the housing package and move toward passage next week. The vote on his motion was set for 2:15 p.m. April 8.

The energy tax credits expire at the end of this year, and previous efforts to extend them failed narrowly in the Senate because Republicans objected to using tax increases on the oil and gas industry to offset the cost of the renewables credit.

Cantwell said, “We are at a critical point. We are at the precipice of projects actually being cancelled . . . because we aren’t giving certainty to their investors about the tax code.”

The amendment would continue for one year existing tax incentives for producing energy from wind, sunlight and other renewable sources. But the extension is not offset, and that could create problems in the House, where Democrats have demanded strict adherence to pay-as-you-go budget rules.

It was not clear whether the Senate would adopt the amendment. Christopher J. Dodd , D-Conn., chairman of the Banking, Housing and Urban Affairs Committee, protested the attempt to add it.

“This is a housing bill! This isn’t a Christmas tree!” he cried. “It’s a housing bill! I’m going to oppose every one of these (unrelated amendments) from here on out.”

Senate Finance Chairman Max Baucus , D-Mont., said adding the energy tax credits to the housing legislation could be “problematic” in the House. But he said he was willing to give it a shot. The House passed separate legislation in late February to extend tax credits for renewables. That measure has yet to come before the Senate. Senate Energy Committee Chairman Jeff Bingaman D-NM, has said he still hopes to overcome opposition from the Bush Administration to the credits.

The House measure re-authorizes incentives encouraging construction of wind and solar power projects and also introduces important new measures to improve energy conservation. The U.S. Renewable Energy and Energy Conservation Tax Act of 2008 was passed with bi-partisan support in the House in a 236 to 182 vote. The measure would be paid for by the elimination of credits for oil companies.

The wind and solar industry associations have lobbied hard to extend the tax credits which have spurred record growth in both industries over the past five years. Many analysts view the extension as necessary for wind and solar companies to compete on a level playing field.