Congress approves omnibus spending package that includes renewable tax credits

Congress has voted to approve a roughly $1.1 trillion omnibus spending package that includes an extension of key tax credits for wind and solar power.

Lawmakers in the House and Senate passed the package Dec. 18, before leaving Washington, D.C. for the holidays. The Senate’s 65-33 vote approved both the $1.1 trillion catch-all spending bill and a $622bn series of tax breaks, USA Today reported.

The House had already passed the measures earlier in the week and President Obama is expected to sign them. In addition to extending the tax credits for renewable energy, the package also eliminates a decades-old crude oil export ban

“Extending renewable energy tax credits is a step in the right direction and sets the stage for continued development of clean and affordable energy across the country, including here in the Southeast.” said Southern Alliance for Clean Energy (SACE) Executive Director Stephen Smith.

“The Southeast is our country’s next frontier for wind energy and solar power development, and Congress’ act to extend tax credits for renewable energy will bolster our region’s clean energy economy,” Smith said.

Under the legislation, the 30% Investment Tax Credit (ITC) for solar will be extended for another three years. It will then ramp down incrementally through 2021, and remain at 10% permanently beginning in 2022.

The 2.3-cent Production Tax Credit (PTC) for wind will also be extended through next year.

The wind PTC will continue at 80% of present value in 2017, 60% in 2018, and 40% in 2019. As before, the rules will allow wind projects to qualify so long as they start construction before the end of the period.

“We’re going to keep this American wind power success story going,” said American Wind Energy Association (AWEA) CEO Tom Kiernan. “With predictable policies now in place, we will continue advancing wind turbine technology, driving down our costs and passing the savings on to American families and businesses in all corners of the country.”

“On behalf of the nearly 2,000 Siemens wind energy employees in the U.S., I applaud Congress for its leadership in providing clear, long-term certainty for renewable energy growth in America,” said Siemens Onshore Americas CEO Jacob Andersen.

Also included were geothermal, landfill gas, marine energy and incremental hydro, which will each get a one-year PTC extension.

Lawmakers weigh in on spending package

“They say the proof is in the pudding – and this package includes a number of Energy and Commerce priorities to improve public health, take care of our 9/11 heroes, boost cures research, and lift the 40-year-old ban on crude oil exports that will create jobs and keep energy affordable,” said House Energy and Commerce Committee Chairman Rep. Fred Upton (R-Mich).

Senate Committee on Energy and Natural Resources Chair Sen. Lisa Murkowski (R-Alaska) praised repeal of the “obsolete” ban on domestic crude oil exports.

While there is much in the omnibus bill that is beneficial, Sen. Joe Manchin (D-West Va.) said the tax extenders package includes too many “Christmas gifts” for special interests.

Congress is rushing to approve the 2,000-page tax extender package for they could rush home for the Christmas holiday, Manchin said in a Dec. 17 floor statement.

At the same time the bill does not keep the affordable health promise that were made to retired coal miners, Manchin said. The West Virginia Democrat said he was voting against the bill.

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.