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Renewable Energy PTC and 1603 Extensions Tacked Onto Senate Bill

Renewable energy policy has seemingly been on the hot seat since late summer. As early as today, it will finally find out how much political backing it has with a series of votes on Capitol Hill.

The wind and solar industries have been pushing strongly to get extensions of popular federal programs onto existing legislation, and they will now be included in a massive highway spending bill.

Sen. Debbie Stabenow, D-Mich., has introduced an amendment that would grant a one-year extension of the Production Tax Credit aimed mainly at the wind industry and would for one year revive the recently expired Section 1603 Treasury Grant that had been a boon for the solar industry. It also includes incentives for cellulosic biofuel, biodiesel and renewable diesel.

The Senate bill would need 60 votes for approval, meaning it would require a significant number of Republicans to cross the aisle. Chuck Grassley, a well respected Republican senator from Iowa has been a leading proponent of the state’s wind industry, and other states with a strong and growing renewables presence, like Arizona and Texas, have Republican senators that could look favorably on this bill.

But getting to 60 votes would be a monumental challenge, especially as the renewables industry as a whole continues to face skepticism from key members of the Republican party. Currently, there are 51 Democrats, 47 Republicans and two Independents in the Senate. Timothy Arcuri, a research analyst with CitiGroup, wrote late Wednesday that his Capitol Hill sources say it is unlikely enough Republicans would sign onto the legislation as it stands.

The amendment is one of 30 that were tacked on in a late-breaking deal. Elements of the Keystone XL Pipeline debate are included among the amendments, as is an amendment by Sen. Jim DeMint, R-S.C., to eliminate all energy tax incentives.

There’s plenty happening outside the Senate chamber as well. This week, Sen. Lamar Alexander, a longtime Republican figure from Tennessee, called on Congress to eliminate its subsidies aimed at the wind industry. Alexander resurrected his critique of “Big Wind,” and the backing it receives from the federal government in a speech to the conservative Heritage Foundation. Alexander said Wednesday that he will introduce a bill to end the Production Tax Credit before it expires.

In the House, Rep. Mike Pompeo, R-Kan., has introduced a bill that would repeal all energy tax credits. Such a bill would affect renewable energy industries far more than fossil fuels. It’s the second time he’s proposed this legislation, the first coming in May when energy policy was not the issue it is today.

Acuri also wrote that several states are considering their renewable portfolio standards (RPS), and that bills to fully repeal the targets have been introduced in North Carolina and Ohio, while others that would scale back standards have been proposed in Colorado, Maine, New Mexico and Washington. According Acuri, these bills are unlikely to pass, and the nation’s main RPS driver — California's 33 percent standard — maintains wide support.

At the federal level, the industry is still working to assess the prospects of the Clean Energy Standard that was recently introduced by Sen. Jeff Bingaman's, D-N.M. The standard would include renewables like solar, wind, geothermal, biomass and hydro, as well as sources such as natural gas and potentially clean coal.

“We've already seen what well-structured clean energy standards have meant in states,” said Rhone Resch, president and CEO of the Solar Energy Industries Association. “They've opened electricity markets to allow for more competition from renewable sources of energy and ultimately drive down the cost of electricity for consumers. This success can be replicated at the national level.”

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