On August 2, Rep. Cook (R-CA) and Rep. Salmon (R-AZ) introduced H.R. 3017 that is entitled the “Renewable Energy Construction and Investment Parity Act”. The bill is available here. Section 2 of the bill is identical to section 2 of Rep. Thompson’s (D-CA) H.R. 2502 (“Renewable Energy Parity Act of 2013”). My prior blog post analyzing H.R. 2502 is available here and contains a link to H.R. 2502.
In summary, the bills would change the sunset language for the 30 percent investment tax credit (ITC) from placed in service by the applicable deadline to start of construction by the applicable deadline. This change would enable more ITC-eligible renewable energy projects to be built and is a legislative priority of the Solar Energy Industry Association.
The Republican version (H.R. 3017) varies from the Democratic version (H.R. 2502) in that the Republican version also requires proceeds from sales from the Federal helium reserve to be applied first to the annual “Federal budget deficit” and then to “Federal debt.”
The existence of a Federal helium reserve was news to me. Rather than ensuring sufficiently buoyant balloons and high pitched voices at birthday parties, the helium reserve is used for defense, medical and research purposes. According to the Bureau of Land Management’s (BLM) webpage, there was a shortage of helium in 2012 that was connected to lower natural gas production due to lower natural gas prices.1 According to the BLM, there are twelve companies that supply helium to the government’s reserve; none of them are major oil and gas companies.
It is a good sign for the ITC start of construction initiative that it now has bi-partisan support in the House. However, given the looming debt ceiling showdown, tax reform debates and the current general dysfunction of the Federal legislative process, adoption is still a long shot. As the 30 percent ITC does not sunset until the end of 2016, from my perspective an extension of the production tax credit (most often used by wind projects) is a higher priority for the renewable energy industry as a whole. Nonetheless, I believe the start of construction ITC proposal to be good policy.
1 The webpage is silent as to whether the shortage has continued into 2013. Possibly the budget cuts due to sequestration have precluded the BLM from updating its webpage regarding the helium reserve.