Stimulus Bill May Include Energy Measures
Sunday, January 11, 2009
Congressional leaders and Obama advisers are looking at including as much as $25 billion of energy tax credits in the economic stimulus package in an effort to bolster renewable energy projects, fuel-efficient cars and biodiesel production, said sources familiar with the negotiations.
Many of these items were featured in President-elect Barack Obama's campaign pledges, but originally lawmakers were considering putting them in a separate energy bill. Though there might still be a separate bill, Senate lawmakers are seeking to include more energy provisions in the stimulus package now being assembled, sources said.
"This doesn't mean that more won't be done later," said one person involved in the talks, "but there will be more now than previously anticipated, given the economic times."
Wind and solar industry executives have pointed to a sharp downturn in financing for renewable energy projects since the credit crunch worsened in September.
Rhone Resch, president of the Solar Energy Industries Association, warned Friday that past sources of financing "are not going to come back . . . until we're in a sustained growth period. It's going to take some mechanism to keep markets growing."
The main elements under consideration include a two-year, $8.6 billion extension of the production tax credit for renewable energy, an item that favors wind power projects. Obama advisers are considering a proposal from the wind and solar industry that would make those credits refundable or count them against past taxes because many financial firms that provided capital for those projects no longer have taxable income and can't use the credits.
The bill could also include tax credits for service stations that install high-ethanol-content fuel pumps, a $7,500 tax credit for plug-in vehicles, an extension of the biodiesel credit, and one for coal-fired power plants that capture more than half of their carbon emissions or that could be retrofitted to do so later. There could also be clean-energy credits for rural cooperatives.
The stimulus package may also establish a federally funded National Clean Energy Lending Authority, an idea that has been promoted by Rep. Chris Van Hollen (D-Md.) and Rep. Zach Wamp (R-Tenn.). The agency would receive as much as $10 billion to $20 billion and would extend low-interest loans or loan guarantees to renewable energy projects in an effort to mobilize private capital. If successful, Van Hollen said, the agency could become self-sustaining.
The pair also proposed the establishment of a revolving fund to help finance energy-efficiency improvements by homeowners.
The two lawmakers have written to Obama and have discussed their proposal for a "green bank" with Obama's choice for chief of staff, Rahm Emmanuel, and economic adviser Lawrence Summers.
"The idea is gaining traction," Van Hollen said. "It fills an essential gap right now."