The Senate Finance Committee is currently in the process of developing an energy tax package, with the hopes of adding it to a climate change or farm bill reauthorization package should one move later this spring. The renewable energy Production Tax Credit (PTC), along with other energy tax incentives included in the Energy Policy Act of 2005, are being examined by the committee for ways to redesign them so energy developers can get new projects online. With regard to the PTC, the redesign will entail an extension of the tax credit, as well as the combination of PTCs with other policies which will help stimulate transmission investment.
At a Senate Finance hearing on March 29, utility and renewable energy industry officials argued that the placed-in-service requirement, which obligates developers to have their plants on-line during a two-year window before the production tax credit expires, is not effective for geothermal and biomass facilities, since they have longer planning horizons. One suggestion put forward by MidAmerican is, instead of an "all or nothing" requirement date, to modify the PTC so that utilities with facilities under construction (but not yet in-service) during the time period could opt-in and then receive essentially a prorated portion of the credit.
The renewable energy industry is also advocating for Congress to extend the PTC to five or even 10 years, as opposed to the historical two to three year extensions. A Senate source said that legislators also support extending the credit for ten years, but it the difficulty will be finding the money to fund it.