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Energy Update (November 25)

Nov 25, 2019 | SHARE  

Green Tax Extenders Package Released

On Tuesday (Nov. 19), House Ways and Means Democrats rolled out a plan to extend multiple expired renewable energy tax breaks, create new ones, and expand other energy related credits. Chair of the House Ways and Means Subcommittee on Select Revenue Measures Mike Thompson (D-CA) said the committee does not have imminent plans for the draft, but he is hopeful for action later this year.[1]  House Ways and Means Chairman Richard Neal (D-MA) and Senate Finance Chairman Chuck Grassley met Wednesday (Nov. 20) and both emerged from the meeting feeling optimistic about reaching a year-end deal. House Ways and Means Ranking Member Kevin Brady (R-TX) also said some of the provisions of the package could be included as part of a deal. A majority of the provisions in the draft have at least some degree of bipartisan support, but both parties are working to keep a year-end extender deal focused so it does not “collapse under its own weight.”[2] It remains to be seen which, if any, of the provisions make it into a year-end tax bill. Possible provisions include a multiyear extension and phaseout of the biodiesel tax credit, an expansion of the electric vehicle tax credit, and extensions broadening the investment tax credit.

Other key provisions included in the draft are:

  • An extension of tax credits relating to alternative fuels. This provision extends the excise tax for alternative fuels at the pre-expiration level of $0.50 per gallon through 2021, and phases the credit down to $0.38 in 2022, $0.25 in 2023, and $0.17 in 2024. The credit would expire at the end of 2024.
  • An extension of credit for the cost of qualified residential energy efficiency property expenditures. This includes solar electric, solar water heating, fuel cell, small wind energy, and geothermal heat pumps. The provision also expands the definition of eligible property to include battery storage technology and energy efficient biomass property.
  • An extension of the production tax credit, which allows energy producers to claim a credit based on electricity produced from renewable resources. The PTC for the following facilities is revived through the end of 2024: closed loop biomass, open loop biomass, landfill gas, trash, qualified hydropower, and marine and hydrokinetic renewable energy facilities.
  • An extension of energy credit for offshore wind facilities. This provision exempts offshore wind facilities that elect into the Investment Tax Credit from reductions in the credit from the onshore wind facilities phaseout. 
  • An extension of the investment tax credit. This allows taxpayers to claim a credit for up to 30% of the cost of qualified energy property. These properties include solar, geothermal, fuel cell, microturbine, combined heat and power, and small wind energy. New eligible property includes energy storage technology, waste energy recovery, biogas, and linear generators.
  • A provision that expands the new energy efficient home credit through 2024. This would expand the maximum credit for eligible new energy efficient homes from $2,000 to $2,500.

To read a full section-by-section description of the draft, click here.

To read the full discussion draft, click here.


PFAS Package

The House Energy and Commerce Committee approved a package of PFAS measures on Wednesday (Nov. 20), in a bipartisan vote of 31-19, with Rep. Fred Upton (R-MI) and Rep. David McKinley (R-WV) voting alongside Democrats. The package includes 12 separate bills related to PFAS that would put stricter provisions on the class of nearly 5,000 chemicals.[3] The central bill proposed by Rep. Debbie Dingell (D-MI) would have required the Environmental Protection Agency (EPA) to list all chemicals in the class as hazardous for the purposes of Superfund cleanups within a year. However, Democrats on the committee adopted an amendment that narrowed that down to just the listing of PFOA and PFOS within a year and requires the EPA to make a decision about the listing of the rest of the chemicals within five years.[4] The markup of the bill arrived as negotiations over PFAS in the National Defense Authorization Act (NDAA) have stalled. Top Democratic leaders said the final defense bill must include a deal on PFAS regulations. Senate Armed Services Chairman Jim Inhofe (R-OK) said House Speaker Nancy Pelosi (D-CA) drew a “line in the sand” in a memo to lawmakers, saying that unless there is PFAS language in the NDAA, she will not bring the bill up for a vote in the House.[5] 


Brouillette Nomination

On Thursday (Nov. 21), Dan Brouillette, Secretary of Energy nominee, cleared a key procedural hurdle. On a 74-18 vote, Senators voted to invoke cloture on his nomination. Two dozen Democrats joined Republicans in backing the nomination.[6] This floor action caps a swift confirmation process, and Brouilette is now on a fast track to become the next secretary at DOE.


FERC Approves Gas Projects

The Federal Energy Regulatory Commission approved four natural gas export projects and two gas pipelines on Thursday (Nov. 20). The commission approved three new liquefied natural gas facilities and an expansion to an existing facility in Texas. In the same vote, the El Paso Natural Gas’ Mainline Expansion pipeline in the Southwest and the Spire STL pipeline through Missouri were approved.[7] The approval was on a 2-1 vote, with Commissioner Richard Glick dissenting on each vote. “I still can’t understand why we are treating climate change as different as all other significant environmental impacts associated with a project,” Glick said. “Actually, I can understand it … because it’s climate change. That’s the subject no one wants to talk about.”[8]  The approval at the hearing paves the way to get a follow up “green light” from the Department of Energy. This will likely come by the end of the month and will represent one of the last acts taken by outgoing Energy Secretary Rick Perry.


References

[1] Lorenzo, Aaron. “Democrats unveil wide-ranging tax incentive proposal for renewable energy.” Politico Pro, 19 Nov. 2019. https://subscriber.politicopro.com/article/2019/11/democrats-unveil-wide-ranging-tax-incentive-proposal-for-renewable-energy-1828363

[2] Koss, Geof. “Green-tinged extenders package ‘not even in doubt.’” E&E Daily, 22 Nov. 2019. https://www.eenews.net/eedaily/2019/11/22/stories/1061611977

[3] Figuera, Ariana. “Panel approves PFAS package as leverage in talks.” E&E Daily, 21 Nov. 2019. https://www.eenews.net/eedaily/2019/11/21/stories/1061605085

[4] Snider, Annie. “E&C clears sweeping PFAS package.” Politico Pro, 20 Nov. 2019. https://subscriber.politicopro.com/article/2019/11/e-c-clears-sweeping-pfas-package-3974204

[5] Adragna, Anthony. “Inhofe: Pelosi insisting on PFAS language in final NDAA bill.” Politico Pro, 21 Nov. 2019. https://subscriber.politicopro.com/article/2019/11/inhofe-pelosi-insisting-on-pfas-language-in-final-ndaa-3974382

[6] Adragna, Anthony. “Brouillete easily clears procedural hurdle in Senate.” Politico Pro, 21 Nove. 2019. https://subscriber.politicopro.com/article/2019/11/brouillette-easily-clears-procedural-hurdle-in-senate-3974358

[7] Bade, Gavin. “FERC approves gas projects amid growing rift over climate change.” Politico Pro, 21 Nov. 2019. https://subscriber.politicopro.com/article/2019/11/ferc-approves-gas-projects-amid-growing-rift-over-climate-change-1829669

[8] Ruckro, Rod & Dillom, Jeremy. “FERC acts on grid rates, gas, and cyber reorg.” EnergyWire, 22 Nov. 2019. https://www.eenews.net/energywire/stories/1061613265/search?keyword=FERC+gas

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