Stimulus Package Sent to President without Energy Incentives, CREBs
On February 6, Congress approved and sent to the President an economic stimulus package that did not include energy-related tax incentives. Senate Finance Committee Members Olympia Snowe (R-ME) and Maria Cantwell (D-WA) led an effort to include in the bill a package of short-term extensions of clean energy and energy-efficiency tax incentives, including a one-year extension (through 2009) of the Clean Renewable Energy Bond (CREB) program for consumer-owned utilities, with an additional $400 million in bonding authority. The House-passed version of the bill did not include energy-related incentives.
In addition, Sens. Jack Reed (D-RI) and Susan Collins (R-ME) led an effort to add $1 billion in Low Income Home Energy Assistance (LIHEAP) to the Senate bill as well.
After falling one vote shy of the 60 needed to end debate on the Senate version of the bill, Senate Democratic leaders were forced to strip the energy incentives and LIHEAP funding, and eventually passed the House-passed version, with slight modifications. The bill was signed by the President on February 11, 2008.
While it is disappointing that the energy incentives were not included in this bill, NEPPA will continue to work on advancing the tax package in other legislative vehicles this year. The House has already signaled that it will take up an $18 billion stand-alone, energy tax bill in the next few weeks. The new House bill, unveiled last night (2/12), includes $2 billion in CREB authority and APPA-supported CREB modifications to the program. What is unclear, however, is whether this bill will garner the support needed to pass the Senate, given that Republicans and the White House still adamantly oppose its being "paid for" by the oil and gas industry.
IRS Announces CREB Allocations
On February 8, the Internal Revenue Service (IRS) announced that 312 projects have been selected to be financed with tax-credit bonds in the second round of volume cap allocations under the Clean Renewable Energy Bonds (CREB) program. The first round of allocations was distributed in November 2006.
According to a press release, the IRS reviewed 342 applications from 33 states pertaining to 395 projects for $897 million of CREB financing. Approximately $477 million of CREB volume cap was available for allocation to qualified issuers. CREB volume cap allocations are awarded on a "smallest-to-largest" project basis.
"Governmental borrowers" submitted applications totaling $728 million to finance 367 projects with an average project size of about $2 million. Governmental borrowers in 28 states will receive $263 million of volume cap allocations ranging from $15,000 to $2.95 million. As was the case in the last round of allocations, it appears that the majority of the bonding authority went to school districts and other "governmental entities," not utilities with an obligation to serve.
"Cooperative borrowers" submitted applications totaling about $170 million to finance 28 projects with an average project size of about $6.1 million. Cooperative borrowers will receive about $143 million of volume cap allocations for projects in 13 states ranging from $300,000 to $30 million.
There were 156 proposed projects in California, 57 in Minnesota, 23 in New Jersey, 17 in Washington, 13 in Nebraska, 12 in Montana, 11 in Illinois and 10 in Wisconsin. Applications ranged in size from $15,000 to $38.5 million.
To view the list of entities that received allocations, go to: http://www.irs.gov/pub/irs-tege/creb_2007_disclosure.pdf. The IRS did not release specific information about those entities that applied but did not receive allocation.