Congress Proposes Expanding Master Limited Partnerships to Renewable Energy & Biofuel Projects

On Friday, June 15, Senator Chris Coons (D-DE) introduced S.3275, the bipartisan “MLP Parity Act,” a bipartisan bill that would amend Section 7704 of the tax code by enabling Master Limited Partnerships (MLPs) to own and finance renewable energy and biofuel projects. Cosponsors of S.3275 include Senators Jerry Moran (R-KS), Jeanne Shaheen (D-NH), Sheldon Whitehouse (D-RI), Jon Tester (D-MT), Amy Klobuchar (D-MN), and Al Franken (D-MN).

As background, MLPs carry the fund-raising advantages of a corporation: ownership interests are publicly traded and offer investors the liquidity, limited liability, and dividends of classic corporations. MLP market capitalization exceeds $350 billion. With average dividends of just 6 percent, proponents argue MLPs could substantially reduce the cost of financing renewables, which currently rely on the participation of the tax equity market, which primarily consists of a small set of large investment banks.

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