On April 3, Sens. Cantwell and John Ensign (R-NV) introduced a short-term, $6 billion energy tax incentive bill, the Clean Energy Tax Stimulus Act (S. 2821), which may be offered today as an amendment to a housing bill being considered on the Senate floor.
The Cantwell-Ensign bill is a scaled-down version of previous tax packages that the Senate has attempted to adopt. Sen. Cantwell has been a leader in the Senate in the effort to extend expiring renewable energy and energy incentive tax incentives, bringing differing packages numerous times to the Senate floor. This is her latest attempt to advance an energy incentives bill.
Included in S. 2821 is an additional $400 million in Clean Renewable Energy Bond (CREB) authority, divided evenly between public power utilities, electric cooperatives, and state/local governments. However, it does not include other technical corrections public power utilities had been advancing, such as modifying the allocation method from smallest to largest to pro-rata.
S. 2821 is not "paid for" by offsets in other spending, but is an attempt by the bill's sponsors to make some limited improvements to current law. Chairman Baucus, who remains committed to putting together a long-term package with acceptable offsets that could pass the full Senate, has reservations about the Cantwell-Ensign package but will not oppose the effort. Sen. Chris Dodd (D-CT), who is managing the larger housing bill on the Senate floor, opposes adding the Cantwell-Ensign amendment to the underlying measure.
The Senate has been in a stalemate over how to "pay for" extensions of renewable and clean energy incentives. While an unpaid-for bill could make passage in the Senate easier, it will likely hit a stumbling block in the House, which is governed by the "Pay-Go" rules that require all new spending to be offset by eliminating spending in other areas.
On April 4, APPA and the Large Public Power Council (LPPC) sent a letter to the Senate urging quick action to extend several renewable energy and energy efficiency tax incentives, joining other energy, environment, labor, and business organizations, which sent a similar letter on April 3. The APPA/LPPC letter specifically highlighted the need for technical modifications to the CREB program, such as requirements for a pro-rata allocation and definitional clarification for public power utilities with an obligation to serve. In addition, APPA issued a press release supporting the Cantwell-Ensign bill.
As a reminder, in February, the House passed H.R. 5351, the Renewable Energy and Energy Conservation Tax Act of 2008, a $17.6 billion energy incentives bill. In order to "pay for" the renewable and energy efficiency incentives, the bill rolls back existing tax breaks for the oil and gas industry, of which the President has threatened to veto if included in a final bill.