Wrangling over energy extenders continues

Source: Geof Koss, E&E reporter • Posted: Wednesday, June 15, 2016

Senate Democrats said yesterday that efforts to extend a key renewable energy tax break for a host of sources that were inadvertently left out of last year’s end-of-year tax deal are being held up by GOP demands for new concessions.

Sen. Ben Cardin (D-Md.) told E&E Daily yesterday that Democrats are meeting GOP resistance as they look for a vehicle to extend an assortment of tax breaks scheduled to expire at the end of the year, including the investment tax credit (ITC) for geothermal, fuel cells, combined heat and power, and other sources left out of last year’s agreement by what Democrats say was an oversight.

“That should be a no-brainer, but it is a challenge,” Cardin said of the ITC, which was extended for five years for solar but not other sources. “What we hear is that Republicans in leadership want something in exchange. We’ve already given at the office on that.”

Sen. Bob Menendez (D-N.J.) leveled a similar charge against Republicans earlier in the day, during a Senate Finance Committee hearing on energy taxes.

He echoed a point Minority Leader Harry Reid (D-Nev.) has made repeatedly — that Majority Leader Mitch McConnell (R-Ky.) had agreed to help extend the ITC for the other qualifying sources because the omission was a mistake.

“I also hope we can avoid any talk of additional concessions to move this forward — concessions that were already made as part of a larger package,” Menendez said at the hearing, adding that the agreement should be “honored before we move on to any more negotiations.”

In an email, a McConnell spokesman said, “We haven’t made any new announcements on that.”

The most immediate vehicle for carrying the tax provisions sought by Democrats is an expected short-term Federal Aviation Administration reauthorization that would allow the agency to operate past the July 15 deadline agreed to by both chambers earlier this year (E&E Daily, June 9).

Cardin said Democrats are “absolutely” looking to the FAA bill as a vehicle for the ITC and other expiring renewable and efficiency tax breaks.

Sen. Ron Wyden (D-Ore.), the ranking member on Finance, declined to comment on the FAA extension as a vehicle but called it crucial for the breaks to be extended as quickly as possible.

“I’m anxious to do this as soon as possible because if you wait and wait and wait, you don’t give the economy the spark it would if we acted early on,” he told E&E Dailyyesterday.

And in a reference to past year-end tax bills that extended certain energy credits retroactively only to see them expire weeks later, Wyden added: “I’m not interested in passing another tax bill with a shelf life shorter than a carton of eggs.”

Speaking earlier yesterday at the Finance hearing — requested in February by Democrats — Wyden took the opportunity to press his proposal to replace the energy tax code with a technology-neutral break for all sources.

“I think it’s time to take the energy provisions of the tax code and throw it in the trash can,” Wyden said at the outset, saying his proposal is “radically simpler and more efficient” because it would halve the costs of energy tax credits.

“I call it more green for less green,” he said.

In his own opening remarks, Finance Chairman Orrin Hatch (R-Utah) said he was willing to consider “any reasonable alternatives” in rewriting the tax code but noted a broad tax overhaul isn’t in the cards anytime soon.

“That is a long-term effort that will likely not bear fruit in the immediate future,” he said. “In the meantime, I think we need to work to ensure that our tax code is designed so that it does not punish the production of any viable energy source.”

After the hearing, Wyden said he’s focused on extending the outstanding energy credits set to expire in the short term, while continuing to build the case for his technology-neutral approach.

“So what I’m going to be saying to the conservatives, you know, I’ve heard both the Energy Committee and the Finance Committee were talking about subsidies for a long time. Well, our bill cuts them in half.”