Bonds and Financing

House bill supported by APPA makes energy tax credits available to public power

House Subcommittee on Select Revenues Chairman Mike Thompson, D-Calif., on June 25 introduced legislation that will allow public power utilities to directly benefit from energy tax incentives.

The American Public Power Association is one of more than 20 organizations that have voiced support for Thompson’s bill, the Growing Renewable Energy and Efficiency Now (GREEN) Act (H.R. 7330).

“APPA applauds Representative Thompson’s leadership in helping to level the energy tax incentive playing field by ensuring that all utilities can benefit from incentives intended to encourage critical energy investments,” said Joy Ditto, President and CEO of APPA, on June 26.

In a June 19 letter to Thompson, Ditto noted that the GREEN Act “would mean that all – not just some – utilities can directly benefit from energy tax incentives. This will make these incentives fairer and more effective.”

Federal tax expenditures are the primary tool Congress uses to incentivize energy-related investments. However, such incentives do not work for tax-exempt entities -- including public power utilities, Ditto pointed out in the letter.

“That means public power utilities are effectively locked out of owning such facilities – and explains why 80 percent of the nation’s (non-hydropower) renewable energy generating capacity is owned by merchant generators,” Ditto said in the letter.

The GREEN Act “addresses this inequity by allowing for the direct payment of energy production and investment tax credits and carbon capture tax credits to any entity that owns the project. This would remove the financial disincentive for public power utilities to own such facilities and would allow the full value of these credits to pay for additional investment or be passed on to our 49 million customers,” she said.

A summary of the bill is available here.