Senators: Deal reached to extend ‘green’ power tax breaks

WASHINGTON -- After failing three times in the past year to extend popular tax breaks for wind, geothermal and solar energy, two senators on Thursday announced a compromise they said might get it done.

Sens. Maria Cantwell, D-Wash., and Sen. John Ensign, R-Nev., introduced a $6 billion bill to renew tax credits on energy production from renewable resources, and for consumers who buy solar panels and other energy efficient items.

The tax credits are set to expire at the end of the year, and without an extension people are less likely to invest in the forward-looking industries, Cantwell said.

"Right in front of us is an investment cycle that is about to implode if we don't give predictability," she said. "Last time we didn't give predictability we saw a 77 percent decrease in investment in this area, and now is not a time for that."

"We've put together these tax credits to stimulate not only the economy, (but) to stimulate those jobs," Ensign said. The incentives are of growing importance in Nevada, considered a fertile source of energy from wind, geothermal and solar power.

The Blue Mountain geothermal project in Northern Nevada is among the efforts expected to benefit, said Karl Gawell, executive director of the Washington-based Geothermal Energy Association.

The 10,984-acre project in Humboldt County is slated to be completed by December 2009, squeaking in under a deadline set in the new bill, Gawell said.

The project was intended to produce 35 megawatts of power, but is being expanded to 49.5 megawatts, said Shelley Kirk, corporate communications director for Nevada Geothermal Power, the project owner.

Generally, 1 megawatt of electricity is enough to power 1,000 homes although there is a difference among wind, solar and geothermal power in terms of output, Gawell said.

At 35 megawatts, the renewable tax credit would have been worth $66 million to Blue Mountain investors, Kirk said, adding estimates of the tax break's impact on the reconfigured project was not immediately available.

The Senate has failed three times to extend the credits, mostly because sponsors wanted to offset the revenue loss by increasing taxes on oil and gas companies.

That strategy was a deal-breaker for some Republicans including Ensign. In November and in March, the tax breaks failed by a single vote.

The Nevada Republican was criticized by renewable-energy advocates and by leaders in the industry, prompting him to seek a deal on the new bill.

Unlike earlier versions, the new bill contains no plan to pay for the tax breaks. Instead sponsors are calling it a "stimulus" bill that would be exempt from Senate "pay as you go" rules.

Sen. Harry Reid, D-Nev., would prefer to pass renewable tax incentives that are paid for but will back the bill, spokesman Jon Summers said.

"This issue is so important to Nevada that he's willing to support any bill that will develop the state's renewable industry, create jobs and help position Nevada as the world leader in renewable energy," Summers said.