Baucus proposes tax incentive overhaul
In mid-December, Senate Finance Committee Chairman Max Baucus, D-Mont., released a discussion draft of legislation that aims to replace the nation’s complex set of energy tax incentives with a dramatically simpler set of credits.
One incentive for clean electricity would be available to renewable resources, fossil resources and anything in-between. The cleaner the facility, the larger the credit. The incentive would be available as either a production tax credit of up to 2.3 cents per kilowatt hour or an investment tax credit of up to 20 percent. A similar incentive would be established for clean transportation fuels, with a production tax credit of up to $1 per gallon or an investment tax credit of up to 20 percent. The U.S. EPA would be tasked with determining how clean the fuels and power sources are.
The Biomass Power Association called the proposal interesting. "With respect to biomass, it’s important that Chairman Baucus has recognized its enormous greenhouse gas benefits when compared to fossil fuel sources like natural gas and coal,” said Bob Cleaves, president and CEO of the BPA. “At the same time, we are concerned that the proposal creates regulatory uncertainty. The use of waste wood and forest residues for energy is undeniably beneficial from a carbon perspective, and we don’t need another, separate proceeding at EPA to reach that conclusion.”