A bipartisan group of 42 senators sent a letter to President Bush asking him to include in his FY08 budget request a proposal to extend the renewable energy production tax credit (PTC) for five years.
The Energy Policy Act of 2005 expanded the PTC, but that fiscal incentive is set to expire on Dec. 31, 2008. To qualify, generating facilities have to be placed in service by that date, which is barely two years away. That means these incentives are not going to be stimulating much new activity over the next two years, because unless a project is already well along, it won’t be completed in time to benefit from the PTC. A five-year extension would create a time scale that actually matches the requirements of putting electric generation projects into operation.
Giving the market the certainty of knowing that this tax credit would remain in place until 2013 would likely lead to a surge in new construction. That would help the nation in two important ways: First, new renewable generation would tend to back out power generated by natural gas, which would take pressure off natural gas prices. All consumers would benefit from that. Second, the additional construction would provide employment both in states with renewable resources as well as states where renewable energy generation equipment is manufactured.
Here’s the letter:
December 15, 2006
The White House
Dear Mr. President:
As you move to complete your Administration’s Fiscal Year 2008 budget request, we strongly urge that you include a proposal to extend the renewable energy Production Tax Credit (PTC) for five years.
The PTC is a vital component in financing new renewable energy projects. As you know, it is crucial to our national security that we expand and strengthen investment in renewable energy resources. The continued development of renewable energy also will spur significant economic development opportunities, stabilize prices by diversifying the electric generation supply, and help reduce greenhouse gas emissions.
The current PTC is due to expire on December 31, 2008. In the past, the short-term, start-and-stop nature of the credit has not sufficiently provided utilities, developers, manufacturers and investors with the necessary certainty to maximize the vast potential for renewable technologies. A long-term credit of five years will give businesses the stability necessary to plan and finance renewable energy projects.
Tapping into our enormous renewable energy potential through a five-year PTC extension is an important step toward ensuring our energy independence. Moreover, it will provide a signal to businesses that we are serious about investing in our energy future by developing new renewable energy technologies to meet our increasing electricity demands.
Bingaman Domenici Baucus Grassley Carper Dorgan Menendez Specter Lugar Craig
Hutchison Durbin Smith Conrad Salazar Brownback Wyden Murkowski Burr Cantwell
Hagel Allard Lieberman Collins Murray Harkin Feinstein Cochran Snowe Akaka Johnson
Bill Nelson Lincoln Boxer Bond Obama Mikulski Coleman Kohl Dodd Enzi Levin
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Marnie Funk (Domenici): 202/224-6977
Bill Wicker (Bingaman): 202/224-5243