Sen. Moran introduces bipartisan, bicameral legislation to level the playing field for clean energy
Would give clean energy projects access to a tax advantage currently available only to oil, gas, and coal projects
Jun 17 2019
WASHINGTON – U.S. Senators Jerry Moran (R-Kan.) and Chris Coons (D-Del.) reintroduced bipartisan legislation, the Financing Our Energy Future Act, to level the energy playing field by giving investors in a range of clean energy projects access to a decades-old corporate structure whose tax advantage is currently available only to investors in fossil fuel-based energy projects.
This straightforward, powerful modification of the federal tax code could unleash significant private capital by helping an emerging class of energy-generation and renewable fuel companies to form master limited partnerships – which combine the funding advantages of corporations and the tax advantages of partnerships. A companion bill was introduced in the U.S. House of Representatives by Rep. Ron Estes (KS-04) and Mike Thompson (CA-05).
“The United States has the largest and most efficient capital markets in the world, yet our renewable energy companies rarely have access to those markets,” said Sen. Moran. “In order to grow our economy and increase our energy security, sound economic tools, like MLPs, should be expanded to include additional domestic energy sources. The Financing Our Energy Future Act will allow the renewable energy sector to utilize the MLP structure for project development, making it accessible to a broader and deeper investment pool that can drastically reduce the time and cost associated with deploying new energy technologies.”
“Clean energy technologies have made tremendous progress in the last several decades, and they deserve the same shot at success in the market as traditional energy projects have experienced through the federal tax code,” said Sen. Coons. “By updating the code, the bipartisan Financing Our Energy Future Act levels the playing field for a broad range of domestic energy sources – clean and traditional alike – to support the all-of-the-above energy strategy we need to power our country for generations to come. This practical, market-driven solution will unleash private capital and create jobs, and that’s why it has earned broad support from Republicans and Democrats in Congress as well as think tanks, business leaders, and investors. Updating the tax code in this way will help increase parity and ensure that these energy technologies can permanently benefit from the incentives that traditional energy sources have depended on to build infrastructure for more than 30 years.”
A master limited partnership (MLP) 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 are currently only available to investors in energy portfolios for oil, natural gas, coal extraction and pipeline projects. These projects get access to larger and more liquid sources of capital than are available for traditionally financed energy projects, making them highly effective at attracting private investment. Investors in clean energy projects, however, have been explicitly prevented from forming MLPs, starving a fast-growing portion of America’s domestic energy sector of the capital it needs to build and grow.
Newly eligible energy resources would include solar, wind, marine and hydrokinetic energy, fuel cells, energy storage, combined heat and power, biomass, waste heat to power, renewable fuels, biorefineries, energy efficient buildings, and carbon capture, utilization and storage (CCUS).
The Financing Our Energy Future Act is endorsed by American Council for an Energy-Efficient Economy (ACEEE), the American Council on Renewable Energy (ACORE), Advanced Biofuels Business Council, the Algae Biomass Organization, the Alliance for Industrial Efficiency, the Alliance to Save Energy, Amazon, Biotechnology Innovation Organization (BIO), BPC Action, Carbon180, Carbon Capture Coalition, Center for Climate and Energy Solutions (C2ES), Ceres, Clean Air Task Force, Covanta Energy, Energy Storage Association, Growth Energy, International District Energy Association, Master Limited Partnership Association, the National Association of State Energy Officials (NASEO), National Hydropower Association, Natural Resources Defense Council (NRDC), National Wildlife Federation, Solar Energy Industries Association (SEIA) and Third Way.
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