In this four-part series, we revisit 2017’s biggest developments in Energy & Sustainability-related news, milestones, policy changes, and financial transactions. This is the first installment of the series. Continue Reading Energy & Sustainability 2017 Year in Review: Tax Bill (Part 1 of 4)
Passage of a tax package is another possible item on Congress’ list for the lame duck session, which is discussed in a recent ML Strategies alert. Three dozen tax provisions are scheduled to expire December 31, about half of which pertain to energy provisions. Congress approved last December a $1.1 trillion omnibus appropriations and $680 billion tax extenders package and adjourned for the first session of the 114th Congress. To learn more about the tax extenders package, read on!
On May 5, 2016, the IRS released new guidance regarding the renewable energy production tax credit (“PTC”) and energy investment tax credit (“ITC”) which most in the renewable energy industry will find favorable.
As enacted, the PTC and the ITC presently are subject to a sunset and will expire. Eligibility for either credit hinges on the date on which construction of the facility begins. As part of the Protecting Americans from Tax Hikes Act of 2015 (the “PATH Act”), Congress:
- Extended the PTC for two years, extending the date before which construction must begin for certain facilities to January 1, 2017;
- Extended the PTC for five years with respect to wind facilities by providing that construction must begin before January 1, 2020;
- Modified the PTC for wind facilities by providing that the credit will phase out over the next four years; and
- Extended the ITC for solar energy facilities—the construction of which begins before January 1, 2022.
To learn more about important details of the new guidance, read on!
Last week Environmental Entrepreneurs (E2) released a report entitled “Clean Jobs America,” a comprehensive analysis of clean energy and clean transportation jobs in the United States. The study found that over 2.5 million Americans are now employed in the clean energy sector, with energy efficiency accounting for nearly three out of every four clean energy jobs. Read on for a sector-by-sector breakdown of the employment numbers and analysis of the effect of recent international, federal and state policies on the clean energy economy.
Early Wednesday morning Congressional leaders reached agreement on a year-end spending and massive tax deal that would prevent a government shutdown and extend a series of tax breaks that benefit businesses and individuals. The agreement has major implications for the future of the energy industry and is being hailed by many as a dramatic victory for those in the renewable energy community. For more analysis of the deal, read on!
In August, the U.S. Department of Energy released its 2014 Wind Technologies Market Report. The report, released annually for the past three years, tracks American progress in wind related areas including installed capacity, prices, jobs, and technological trends, among several others. This edition contains several positive developments for U.S. wind, as last year 4,854 MW of new capacity was added, representing $8.3 billion in new investments. For a summary of the report’s major highlights, read more below:
Just in time for tax day – but 14 days behind the Congressional deadline – the IRS released the statutorily required calculations to determine the value of the Section 45 Production Tax Credit (“PTC”) credit amount in 2015, and whether or not a phase-out of the calculation would be required.
The PTC has historically been the primary incentive for the wind industry, but a number of other clean energy technologies are also eligible for the credit.
ENERGY AND CLIMATE DEBATE
The 113th Congress adjourned sine die last week, and efforts are underway to prepare for an eventful 114th Congress and final two years of the Obama Administration.
Before the Senate departed, they finalized the one-year tax extenders package (H.R. 5771), which the House had approved over a week earlier, and completed a series of nominations. Among other things, the tax extenders package extends the wind energy production tax credit through the end of the month. The short extension sets the stage for a broader debate on tax reform next year, and parties on both sides of the aisle are gearing up for a fight over the PTC, among many other provisions. President Obama signed the $41.6 billion short-term extenders bill into law December 19. He announced the same day that he will release a detailed plan in the near future to overhaul the tax code. Congressional Republicans have urged the Obama Administration to add more details to a 2012 framework for business tax changes.
ENERGY AND CLIMATE DEBATE
Republicans gained control of the Senate last Tuesday, and, with Republicans picking up several House seats as well, Congress rests in their hands. The question now becomes: can D.C. govern?
Republican gains in the midterm elections bode well for increased oversight of the Environmental Protection Agency, due in large part to Senator James Inhofe’s (R-OK) imminent ascension to chairman of the Senate Environment and Public Works Committee. Senator Barbara Boxer (D-CA) will move to the Ranking Member slot. Senator Inhofe, self-proclaimed climate skeptic, has indicated that he will use the committee to investigate the agency’s regulations and authority. Senator Mitch McConnell (R-KY) will replace Senator Harry Reid (D-NV) as majority leader, and, he is likely to lead the party’s efforts to roll back Environmental Protection Agency rules, including CO2 standards for power plants, ozone air quality standards, and expanded Clean Water Act jurisdiction over U.S. waterways. Senator Mary Landrieu (D-LA) faces a runoff December 6, and she is likely to lose, meaning that Senator Maria Cantwell (D-CA) will join Senator Lisa Murkowski (R-AK) as ranking member and chair of the Senate Energy and Natural Resources Committee, respectively. With a 54-member majority, it is likely that Senate Republicans will be able to find the 60 votes necessary to move legislation to approve the Keystone XL pipeline. The White House is declining to say whether President Obama would veto legislation approving the Keystone pipeline. To reach the 67 votes needed to overcome a presidential veto, Senate Republicans will still have to work closely with their Democratic counterparts, and they will need to employ creative approaches, such as using authorization bills, appropriations riders, oversight hearings, and the Congressional Review Act, to advance their energy agenda. Other agenda items may include altering the Renewable Fuel Standard; expediting liquefied natural gas exports; streamlining transmission project decisions; expanding oil and gas drilling; and funding the Yucca Mountain nuclear waste repository.
This week, ML Strategies’ Director of Government Relations, Bryan Stockton, provides an update on the clean energy provisions in the Senate’s tax-extenders package and details scenarios for their extension as the midterm elections approach.
Now that summer is drawing to a close, let’s check in on one important bill that lost momentum just as the summer was beginning. Remember the Senate Finance Committee’s tax extenders package (S. 2260), which the committee marked up on a bipartisan basis in mid-May? The one that was poised to pass the Senate but that surprisingly failed to reach cloture after Senate leadership blocked Republican amendments on the bill? At the time, congressional staff and lobbyists—and even Majority Leader Harry Reid (D-NV) —suggested that the extenders package would come up again in the lame duck session after the November election. The House was not expected to vote on an extenders package before then anyway, so the Senate delay would not really impact the timing of final passage of this two-year extension of more than 50 tax provisions.