Max Baucus (D-MT), who chairs the Senate Finance Committee is proposing major changes to clean energy tax provisions that would roll up 42 clean energy tax expenditures into two tax credit programs.
The two tax credit programs would cover electricity generation and transportation fuels – representing 70% of the U.S. energy economy, says Jordan Collins, director of government relations for Mintz Levin.
Of the 42 energy tax expenditures, 27 are set to expire at the end of this year and if they were to be extended would cost $150 billion over a decade. To narrow it down to two tax credit programs Baucus calls for killing provisions he believes does not work, consolidating those that don’t work as well and tying “the two remaining programs to a long-term goal emissions reduction goal to provide policy certainty,” Collins writes.
“The Chairman’s proposal provides incentives based on outcomes – the reduction of greenhouse gas (GHG) emissions in electricity generation and transportation fuel – rather than by technology,” Collins writes. In the proposal, any energy generation facility that reduces emissions by at least 25% compared with 2013 emissions levels, as determined by the EPA, would get the tax credit.
While onshore and offshore wind would continue to receive tax credits, the proposal would allow new nuclear generation and some investments in carbon capture and sequestration to also receive credits. However, solar tax credits would shrink in the new proposal, as would energy efficiency credits for retrofits of homes and businesses.
To read Mintz Levin’s analysis of the proposal, click here