EIA report finds coal got relatively little federal support lately

The recent Energy Information Administration (EIA) report on federal tax expenditures on energy finds that coal got relatively little government financial support.

“The electric power sector accounts for more than 90% of total U.S. coal consumption, and coal-fired generation accounted for 39% of total electricity generation in 2013,” according to the report. “Despite its leading role as a fuel source for U.S. electricity generation, however, coal was a relatively small recipient of total electricity-related tax expenditures in both FYs 2013 and 2010.”

Coal-related tax expenditures had an estimated value of $779m in FY 2013, up slightly from an estimated $664m in FY 2010, according to the report which was issued March 12 at the request of House Republican energy leaders.

More than half of the estimated tax expenditures for coal in FY 2013 was accounted for by provisions established under the Tax Reform Act of 1969 and the Energy Policy Act of 2005 (EPACT 2005, that allow for a shortened amortization period for the cost of new certified pollution control equipment.

The report does point out that federal support of renewable energy, like wind and solar, has escalated in recent year partly due to the American Reinvestment and Recovery Act (ARRA) or the “stimulus” bill passed early in the Obama administration.

When it comes to Department of Energy (DOE) loan guarantees, the Vogtle 2 and 3 nuclear units being developed by Southern (NYSE:SO) utility Georgia Power and its partners appears to be the largest single commitment for a conditional $8.3bn loan guarantee.

SCANA (NYSE:SCG) is building V.C. Summer Units 2 and 3 in South Carolina without a federal loan guarantee.

The largest DOE loan made toward a renewable energy project appears to be the NRG Energy (NYSE:NRG) Brightsource solar project with roughly a $1.6bn loan guarantee commitment. The project, one of the world’s largest solar thermal projects, is located in California.

When it comes to research and development, support for Smart Grid and electricity transmission represented the largest portion of electricity-related R&D subsidies. Nearly 39% of FY 2013 R&D expenditures were devoted to researching the electricity grid’s capability to accommodate larger shares of electricity from intermittent sources.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.