In action that preceded the defeat of the tax title on the Senate floor, the Senate Finance Committee approved, on June 19, by a vote of 15-5, the Energy Advancement and Investment Act of 2007, which provided a number of energy tax incentives of interest to NEPPA.
First, the $26.8 billion bill included a three-year extension of the Clean Renewable Energy Bond (CREB) program, with a $900 million annual volume cap. Sens. Maria Cantwell (D-WA), Olympia Snowe (R-ME) and John Kerry (D-MA) worked with committee staff to increase the overall volume cap and extend the length of the program. An earlier draft included only a two-year extension and a $700 million annual allocation.
The CREBs provision in the Senate bill did not, as public power had recommended, include a specific definition of "governmental entities with an obligation to serve". Moreover, the bill modified the program to include "transmission infrastructure" related to eligible renewable property. APPA and others opposed the inclusion of transmission in the definition of eligible projects, as they believe it would unfairly compete for the already limited amount of funding allocation. Morgan Meguire plans to meet with staff to Sens. Snowe and Kerry this week to discuss a strategy to help make the program more effective for public power.
The tax bill also included a five-year extension of the production tax credit (PTC) for renewable energy resources; a five-year extension for new energy efficient homes; increased deductions for energy efficient commercial buildings; a plug-in hybrid vehicle (PHEV) tax credit for light, medium, and heavy-duty vehicles; and an investment tax credit to convert hybrid electric vehicles to PHEV. NEPPA has supported efforts advanced by Sens. Snowe and Dianne Feinstein (D-CA) on energy efficiency tax incentives, particularly those included in the bill.
Further, the committee extended a 20 percent investment tax credit (ITC) for Integrated Gasification Combined-Cycle (IGCC) coal facilities and a 15 percent ITC for advanced coal-based electricity generation -- but tied the credit to projects that capture and sequester 70 percent of total carbon dioxide emissions. The committee also created a new tax credit bond proposal, called Clean Energy Coal Bonds (CECB), for public power systems to help finance similar clean coal projects, and allocates $3 billion for such projects.