Senate democrats release national energy bill

By Anna Simet | September 23, 2015

Building on the U.S. DOE’s Quadrennial Energy Review installment released earlier this year, U.S. Senate democrats released a tax reform proposal that aims to early on address U.S. energy challenges predicted in the report.

Those challenges include a projected 18 percent rise in the cost of electricity, a 72 percent increase in clean energy generation and the need to fill an additional 1.5 million new jobs in the energy industry within the next 15 years.

The American Innovation Act of 2015 proposes programs focused on renewing economic growth in the energy sector, modernizing infrastructure, cutting carbon pollution and waste, investing in clean energy, and supporting research and development

It also proposes to repeal tax incentives currently granted to major integrated oil and gas companies.

Among its many proposed programs are a distributed energy loan program that would help states, tribes, utilities, and universities deploy projects that recover or produce useful thermal energy from waste heat or renewable thermal energy sources, generate electricity locally, distribute electricity in microgrids, distribute thermal energy, or transfer thermal energy to building heating and cooling systems.

A technical assistance grant program would provide aid in identifying, evaluating, planning and designing distributed energy systems at for-profit and nonprofit entities. Grants would be issued on a competitive basis with priority given to grants that facilitate the use of renewable energy, strengthen energy infrastructure, or improve the feasibility of microgrids. The act proposes authorization of $250 million for fiscal years 2016 through 2020.

A contracts for federal purchases of energy section would authorize the federal government to enter into up to 30-year contracts for the acquisition of renewable energy or energy from cogeneration facilities.

A DOE loan program reform section would allow state financing entities to obtain loan guarantees through the DOE loan programs, after which the state financing entity could lend to projects in their state. Noted in the proposal to be an important factor is that while other applicants to DOE’s 1703 loan program have only qualified if their project is innovative, this section allows state financing entities to lend to technologies and projects that are not innovative, but still avoid, reduce or sequester air pollutants or greenhouse gasses, opening program to a host of efficient, clean, or renewable projects that otherwise have had difficulty obtaining financing.

Another section extends current alternative fuel tax credits—including natural gas and propane, hydrogen, cellulosic biofuels, and biodiesel—to 10 years for facilities that are placed in service on or after January 1, 2018. Facilities placed in service prior to January 1, 2018 would be able to qualify for a 10-year credit stream beginning on January 1, 2018. The treasury department and the EPA are required to establish safe harbors for fuels that are produced using similar feedstocks and production pathways. The legislation aims to simplify the process by allowing similar technologies (no more than 10 percent emissions profile difference) to be grouped together. For emerging fuels that are produced using feedstocks or pathways that have not been previously reviewed, the treasury and EPA are directed to offer provisional guidance for credit rates no later than one year after a taxpayer requests approval of the pathway.