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Producers hoped for longer tax breaks(Daily Oklahoman, The (KRT) Via Thomson Dialog NewsEdge) Apr. 12--Producers, lobbyists and analysts are watching closely as Congress continues to weigh numerous tax provisions related to both renewable sources and to traditional oil and natural gas. Action this week was in the Senate, where an overwhelming majority approved an amendment dealing with tax breaks for renewable energy to House Resolution 3221, the Foreclosure Prevention Act of 2008. A longer extension? One analyst and an electricity producer, in fact, were watching one issue specifically -- the extension of a tax credit through 2009 for producing electricity from renewable sources, such as wind. Simply put? They were hoping for a longer extension. Steven F. Greenwald, an energy transactions and regulations lawyer based in San Francisco who represents independent electric generators, large electric consumers and power marketers, said this week the industry seeks a significantly longer extension of the tax credit for energy produced by wind farms and other renewable energy sources. 'A huge economic driver' A longer extension would enable project developers (and financing parties) to plan with greater certainty for projects that will first become operational in 2010 or 2011, he said. Greenwald called the credit "a huge economic driver." Representatives for Oklahoma Gas and Electric Co., which is building numerous wind farms, said Thursday they too were following Congress' work on the credits. Brian Alford, a spokesman for the company, said tax credits like those being considered by the Senate this week will help keep wind projects in Oklahoma moving forward. Longer credit needed But like Greenwald, Alford also said the utility would like to see a longer extension of the production tax credit for renewable energy to allow OG&E and other companies to pursue long-term plans for future projects. "We're disappointed that the extension is only for one year," Alford said. "We're hopeful that in the coming months, Congress will explore extending the time frame, which would allow for a more long-term approach to wind project development." Timing critical The tax credit is 1.5 cents per kilowatt-hour of electricity sold. Analysts say that equates to about $20 for every megawatt hour of power generated. A taxpayer may generally claim the credit for 10 years, beginning on the date the qualified facility is placed in service. In order to qualify, however, generation facilities would have to become operational by the end of 2009. Other items included in the amendment were: -- Extending a tax credit through the end of 2009 that is offered to taxpayers for buying a dwelling using solar energy to generate electricity and for buying solar water heating properties used exclusively for purposes other than heating swimming pools and hot tubs. Officials say 30 percent of qualifying expenditures can be claimed for the credit. The proposal would eliminate a $2,000 cap on the deduction, too. -- Extending a tax credit through the end of 2009 for homeowners who buy advanced main air circulating fans, natural gas, propane, or oil furnaces or hot water boilers, windows and other qualified energy-efficient equipment for their homes. Officials say 10 percent of qualifying expenditures can be claimed for the credit. -- Extending a tax credit through 2010 for home builders who install energy-efficient equipment into their products. Also, it would extend tax credits for energy-efficient appliances produced in 2008, 2009, and 2010. -- Extending a solar energy and fuel cell investment tax credit through 2016 for business owners, and also allow utilities to claim the credit. What's next? The measure approved by the Senate on Thursday must return to the U.S. House for more hearings. It also had no impact on tax credits enjoyed by traditional oil and natural gas producers. Brook Simmons, vice president of Capitol Decisions in Washington, a lobbying firm representing the Oklahoma Independent Petroleum Association, said the Senate has rejected language proposing higher taxes on crude oil and natural gas producers. To see more of The Oklahoman, or to subscribe to the newspaper, go to http://www.newsok.com. Copyright (c) 2008, The Oklahoman Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |