Energy and Climate Debate -
Following weeks of intense negotiations, Congress approved the $1.1 trillion omnibus appropriations and $680 billion tax extenders package (H.R. 2029), which includes a long-term extension and phasing down of the wind production tax credit and the solar investment tax credit. It provides an extension, retroactive to January 1, 2015, of the wind production tax credit at its current 2.3 cent rate through 2020, with a phase down of 20 percent per year beginning in 2017. The measure extends the investment tax credit for solar with a phase down of 30 percent through 2019, 26 percent in 2020, 22 percent in 2021, and then expires in 2022 for residential projects and reverts to the existing 10 percent credit for commercial projects at that time. The bill lifted the four-decades old crude oil export ban, but did not include many of the environmental riders that were being considered, such as language prohibiting the Environmental Protection Agency from implementing power plant or ozone standards or the Waters of the US rule, nor did it prohibit the administration from contributing to the Green Climate Fund. In additional to related new and ongoing legal battles, we expect congressional challenges to the rules to continue through 2016, including in the next couple of weeks when the Senate will vote to override President Obama’s veto of resolutions (S.J. Res. 23, S.J. Res. 24) blocking the administration’s power plant rules, this week’s House Congressional Review Act vote on the Waters of the US rule, and upcoming congressional CRA votes on the ozone rule as well.
The tax extenders package impacts 52 tax breaks, providing two-year renewals for some and five-year renewals for others, making still others permanent, containing Internal Revenue Service administrative practice language, and offering new rules related to real estate investment trusts, among other issues. The package extends or creates more than $33 billion in energy-related tax credits over ten years, including, in addition to the above, extending through 2016 the $1 per gallon biodiesel tax credit; the $1.01 per gallon cellulosic biofuel tax credit; and a tax deduction for energy efficiency improvements to commercial buildings.
Please see full Update below for more information.