Tax credit extension still possible

By Lisa Gibson
Posted March 3, 2010, at 11:05 a.m. CST

A one-year extension of the production tax credit for certain biomass power facilities is included in the American Workers, State and Business Relief Act, introduced March 1 by Senate Majority Leader Harry Reid (D-Nev.) and Sen. Max Baucus (D-Mont.). The 5-year credit was originally included in the 2004 Jumpstart Our Business Strength Act and is crucial to the biomass power industry.

Under the new bill's provisions, the credit period, which expired at the end of 2009, would be extended through 2010 for open-loop electricity-producing facilities placed in service before Oct. 22, 2004, according to the U.S. Senate. The proposal carries an estimated cost of $105 million over 10 years.

More than 100 operating plants in the country count on that tax credit, according to Biomass Power Association President and CEO Bob Cleaves. He has previously said that if an extension is not passed, it will have catastrophic consequences for the biomass power industry, which is responsible for about half of the renewable energy produced in the U.S. Cleaves was unavailable for comment on the proposed extension this week.

A vote on the new $150 billion piece of legislation could come as early as this week. It also includes an extension through 2010 of $1-per-gallon tax credits for biodiesel, renewable diesel and diesel from biomass, as well as an extension of the 10-cents-per-gallon credit for small agri-diesel producers. The proposal comes at an estimated cost of $1 billion over 10 years, according to the U.S. Senate.