JUNE 2005
Senate Passes Energy Policy Bill 85-12;
Bill Contains 3-Year PTC and 10% RPS
Energy Legislation Now Set to Enter Final Phase
By Kathy Belyeu
AWEA Staff
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June 28, the U.S. Senate overwhelmingly approved a wide-ranging energy
policy bill containing a three-year extension of the wind energy Production
Tax Credit
(PTC) and a national Renewables Portfolio Standard (RPS) that would require
10% of
the nation’s electricity to be generated by renewables by the year 2020.
Passage of the bill, H.R. 6, signifies the third time in five years that the
Senate
has passed broad energy policy legislation. The previous two bills failed to
become law
when they became stuck in unresolved negotiations with vastly different
energy legislation
approved by the House of Representatives. The House passed an energy policy
bill
earlier this year. Both bills now advance to a House-Senate conference
committee, to be
reconciled, and ultimately presented to President Bush to sign into law. The
President
set the entire process in motion over five years ago with the release of the
administration’s
national energy plan. While there is no firm schedule for the conference
committee,
observers expect its members to be announced soon and its first meeting to
take
place shortly after the 4th of July holiday. Congress is only in session for
three weeks
between Independence Day and the start of its break for all of August.
Despite some remaining hurdles, prospects for a compromise version of the
bill becoming law this year have increased. Last
year the Senate bill had little to no support from Senate Democrats. This
year, the bill claims support from both Democrats
on the Senate Energy Committee as well as Senate Democratic Leader Harry
Reid of Nevada. In addition, over the last few
weeks, President Bush has repeatedly called on Congress to deliver an energy
bill to his desk for signature by early August. One of the biggest
remaining roadblocks is trying to break the
impasse over whether to exempt manufacturers of a formerly used gasoline
additive (MTBE) from lawsuits over groundwater
contamination.
3-Year Production Tax Credit
The 3-year PTC contained in the Senate energy bill would extend the
placed-in-service date for gaining access to the
credit from December 31, 2005, to December 31, 2008. The credit would be
maintained at its current value of 1.9 cents per
kilowatt-hour and it would continue to be adjusted annually for inflation.
In addition, once qualifying for the credit,
individual wind turbines would continue to
generate credits for a term of 10 years. The House
bill does not address the PTC extension or the 10% national renewables
requirement.
Efforts to add a new small wind tax credit into the tax
portion of the Senate energy bill were unsuccessful.
Last year the Senate energy bill contained a 30% investment tax
credit – capped at $2,000 per system – for the purchase
of a small wind system used to power a home or farm. This year the
Senate Finance (tax) Committee did not include the
provision. The provision has never been contained in a House version of the
energy bill. AWEA will continue to push for
inclusion of the small wind provision during the final conference committee
stage of the process.
AWEA Defeats Sen. Alexander’s Anti-Wind
Efforts
During the second week of Senate debate on the energy bill, AWEA and its
allies defeated the anti-wind efforts of Sen.
Lamar Alexander’s (R-Tenn.). First, Alexander
failed in his attempt to stop a 10% federal RPS from being added to the
bill. The Senate voted 52 to 48 in favor of the
RPS. Sen. Jeff Bingaman (D-N.M.) led the pro-wind, pro-RPS effort, calling
for a portion of U.S. electricity to be generated
by renewables by 2020. Next, Sen. Alexander lost
63 to 32 in his attempt to severely restrict use of the PTC. The rejected
amendment would have prohibited access to the PTC
for wind projects located within 20 miles of a coastline (either on
shore or off shore), national park, national seashore, national
lakeshore or 20 “World Heritage sites” (designated
scenic areas) in the U.S. The failed amendment also would have required a
180-day (six-month) waiting period for
local communities to review any proposed wind project.
Summing up the debate on the Alexander amendment,
Sen. Tom Harkin (D-Iowa) said the amendment would “usurp local land
use decision-making.” Discussing the energy bill
on the Senate floor the day after losing the vote on his amendment, Sen.
Alexander all but admitted defeat, saying he thinks wind energy is
“heavily over-subsidized and over-estimated, but
it is supported in here.” The junior Senator from Tennessee may carry his
anti-wind efforts into the conference committee,
of which he is expected to be a member."
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