Washington, D.C. – U.S. Senator Jerry Moran (R-Kan.) today testified before the U.S. Senate Finance Subcommittee on Energy, Natural Resources and Infrastructure on bipartisan legislation he introduced with Chris Coons (D-Del.) to expand domestic energy production field by giving investors in renewable energy projects access to a tax structure currently utilized by investors in fossil fuel-based energy projects. The Master Limited Partnerships (MLP) Parity Act, S. 795, is a straightforward, powerful modification of the federal tax code that could unleash significant private capital by helping additional energy-generation and renewable fuels companies form MLPs, which combine the funding advantages of corporations and the tax advantages of partnerships.

"Ironically, the United States has the largest and most efficient capital markets in the world, but our renewable energy companies rarely have access to those markets," Sen. Moran testified. "Extending MLP treatment to renewable energy could move the renewable energy industry…into to a broader and deeper investment pool that will increase participation in clean energy projects. Continuing the MLP structure in the Internal Revenue Code, and broadening it to include investment in renewable and clean energy, would provide a predictable tax policy that encourages investment in all U.S. energy projects, creates jobs and promotes American competitiveness in the global race to develop and utilize competitively priced energy sources."

A master limited partnership is a business structure that is taxed as a partnership, but whose ownership interests are traded like corporate stock on a market. By statute, MLPs have only been available to investors in energy portfolios for oil, natural gas, coal extraction and pipeline projects. These projects get access to capital at a lower cost and are more liquid than traditional financing approaches to energy projects, making them highly effective at attracting private investment. Investors in renewable energy projects, however, have been explicitly prevented from forming MLPs, starving a growing portion of America’s domestic energy sector of the capital it needs to build and grow.

The MLP Parity Act introduced in April 2013 is improved and expanded from the version introduced in 2012. The bill continues to include eligibility for renewable power generation and biofuels resources. In addition to providing greater clarity on how expansion of the law would be implemented, the bill further widens the scope of projects that qualify for master limited partnership status to include energy efficient buildings, waste-heat-to-power, carbon capture and storage, and biochemicals. The updated version of the bill also provides increased clarity and specificity on how it would be implemented if made law.

Click here to watch a video of Sen. Moran’s full testimony on the importance of leveling the playing field for renewable energy.

Click here to read Sen. Moran’s testimony.

Click here to download a copy of the Master Limited Partnerships (MLP) Parity Act.

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