Tuesday, October 12, 2010

New Bill for Cooperative Utilities

Sen. Bill Nelson (D-Neb.) and several Senate renewable energy stalwarts introduced a bill yesterday to allow public utilities to issue unlimited bonds to pay for renewable energy projects.

Nelson joined Sens. Maria Cantwell (D-Wash.), Patty Murray (D-Wash.) and Bernie Sanders (I-Vt.) on the bill, which would provide consumer-owned public utilities comparable federal tax incentives as ‘for-profit‘ utilities, according to the sponsors.

‘Public power providers are key contributors to our nation's clean energy future, and their ratepayers should benefit from the same incentives as anyone else,‘ Cantwell said.

‘Public power utilities serve half the people in Washington state and one in four nationally, yet the federal incentive available to public power is only one-tenth of that available to investor-owned utilities. This bill will unleash billions of dollars in clean energy investment and result in lower costs for consumers and the creation of thousands of green jobs nationwide,‘ she said.

In the 2005 energy bill, Congress empowered public utilities to sell bonds that pay investors tax credits instead of interest to help finance renewable energy projects. This type of funding helps bring down the price of the projects for the public utilities.

Congress has provided $2.4 billion for the program, including $1.6 billion in the 2009 stimulus bill. Public power providers, governmental bodies and electric cooperatives equally divide the allocations under the current system and they are distributed by the Internal Revenue Service.

The bill would remove that limit -- about $800 million per category -- an amount that could be used by just one applicant for one project ‘if given the opportunity,‘ Cantwell's office said in a statement.

The bill also makes technical modifications to the program to be more in tune with other types of tax credit bonds, enables consumer-owned utilities to develop and own renewable resources directly and clarifies that American Indian tribe utilities can issue the bonds.

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