Tuesday, June 14, 2005
Copyright © Las Vegas Review-Journal
Reid's energy bill seeks tax incentives
Measure would give breaks for companies producing electricity from alternative sources
By SAMANTHA YOUNG
STEPHENS WASHINGTON BUREAU
WASHINGTON -- Sen. Harry Reid on Monday revived a bill to expand renewable energy tax incentives to make geothermal, solar and wind power more competitive with oil, gas and coal.
Reid, D-Nev., offered his bill as the Senate is set to start debating an energy bill that is expected to include some form of tax relief for renewable fuels.
"Our dependence on imported oil poses a risk to our national security and our economic well-being," Reid said in a statement. "It is imperative that we change our energy equation."
The bill would provide a production tax credit of 1.8 cents per kilowatt hour to companies that derive energy from solar, geothermal, biomass, wind, incremental hydropower and landfill gas technologies.
The bill would allow developers to claim the tax credit when electricity contracts are signed with utilities, a step taken before a plant is built.
Under the current system, owners must risk whether the tax credit will be in effect when a new plant goes online, said Karl Gawell, executive director of the Geothermal Energy Association.
"It would simplify the process for all sides," Gawell said. "If in fact what we are going to see is a continuation of the past -- extending the production tax credit for only one or two years at a time -- all these industries are going to be on a steep roller coaster."
A Reid aide said the tax credit would cost about $4.2 billion over three years.
The Bureau of Land Management has identified Nevada as one of the country's main locations for geothermal energy. The state is home to a wealth of hot underground water and steam, which can be tapped to produce power.
"Nevada is rich in solar, wind and geothermal resources," Reid said. "These tax credits will help pave the way for companies to make renewable energy a reality."
Senators have resisted making the renewable tax credits permanent. In past years, they have reduced proposed 10-year tax credits to a two-year time frame.
Gawell said geothermal plants pay up to three times more in income taxes than a fossil fuel plant, making a renewable production tax credit less costly than critics have charged.
