Senate Democrats unveiled a bill that would provide more tax credits for renewable energy while killing some tax incentives for oil and natural gas producers.
Senators Maria Cantwell of Washington, Harry Reid of Nevada, Charles Schumer of New York and Ron Wyden of Oregon announced the legislation at a press conference in Washington Tuesday.
The lawmakers described the bill as “a Democratic vision for a cleaner energy future,” in an e-mailed statement. It focuses on industries that will modernize the country’s power infrastructure while reducing the carbon emissions that are blamed for warming the planet.
“Our proposal today throws an outdated, stagnant set of tax rules in the garbage can,” Wyden told reporters.
Wyden, who serves on the Senate finance and energy committee, said the bill is a shift toward a “market-based” tax code that would spur innovation in clean energy. “The tax code now plays an enormous role in our energy policy. The system on the tax books is a crazy quilt of laws tethered to yesteryear and it’s suffocating innovation.”
‘Dead on Arrival’
The legislation is “dead on arrival,” in part because the Democrats no longer have a majority in the Senate, said Rob Barnett, a policy analyst at Bloomberg Intelligence in Washington.
“This is a position paper,” Barnett said in an interview. “If Democrats win big in 2016 — win the White House, win back Congress — this is something they’d like to do.”
The bill would re-introduce the Production Tax Credit (PTC) for wind projects, providing a credit of as much as 2.3 cents per kilowatt-hour. The PTC expired at the end of 2014.
It also calls for extending the Investment Tax Credit (PTC) for solar power that provides a credit for 30 percent of project costs. The credit is due to be eliminated at the end of 2016 for most solar projects, and reduced to 10 percent for others.
The draft bill would close what it describes as “big oil tax loopholes” for some of the largest integrated oil and gas companies, including expenses for drilling costs and deductions for enhanced oil recovery.
The American Petroleum Industry denounced the bill, saying that it could threaten the U.S. “energy renaissance.” The proposal “uses taxpayer dollars to raise the cost of energy for American consumers,” the trade group said in a statement Tuesday.
The Solar Energy Industries Association, which is urging Congress to extend the ITC, supports the bill.
“This legislation provides the stability that businesses in the solar industry need to grow,” Rhone Resch, president and chief executive officer of the Washington-based trade group, said in a statement.
©2015 Bloomberg News
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