On April 10, the Senate passed, by a vote of 88-8, a Cantwell (D-WA)-Ensign (R-NV) amendment to the housing bill that extends an array of tax-based incentives for renewable energy production, conservation and energy efficiency initiatives. The Clean Energy Tax Stimulus Act (S. 2821) is a one-year, $6 billion energy tax incentive proposal that includes an extension of the Clean Renewable Energy Bonds (CREBS), the production tax credit for renewable development and investment tax credit for solar and fuel cell technology. The Cantwell-Ensign amendment also includes incentives to encourage energy efficiency in commercial building, new homes and to help finance energy efficiency improvement to exiting homes.
Of specific interest to NEPPA is the CREB program, which is extended for one year, until the end of 2009, with an additional authorization of $400 million. This authorization is split equally among public power utilities, electric coops and other governmental entities. There are no additional changes to the CREBs language, even though they had been sought by public power. These had included a modification to the allocation method, changing it from a "smallest to largest" methodology to "pro-rata." The underlying bill on housing was also approved, 84-12 and now goes to the House for consideration.
The Cantwell-Ensign amendment is expected to run into problems in the House, as the provision is not revenue neutral (i.e. does not include a reduction in federal spending to "pay-for" increased spending), and the House has adopted a rule, under which all federal spending must be paid-for by offsets, so as not to further increase the federal deficit. This pledge, and the current state of the economy, as well as it's desire to stimulate "green" investments as a first step in efforts to address climate change puts the House is in a tough position on how to advance long-term clean energy tax incentives this year.
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, which prompted the President to threaten a veto if the rollback are included in a final bill. The White House and the Republican Leaders in both the House and Senate have resisted, to date, efforts to find acceptable offsets that will pay for the clean energy incentives.