Conservatives Oppose Extending Some Energy Tax Credits

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A coalition of conservative groups has again called for lawmakers to reject a package of renewable energy tax credits that supporters claim was mistakenly left off last year’s Fiscal 2016 omnibus spending bill negotiations.

The group of 47 conservative organizations — led by the Heritage Foundation and the Koch brothers-backed Americans for Prosperity — wrote to congressional leadership to prevent consideration of a provision to extend tax credits for certain wind energy facilities, geothermal heat pumps and fuel cell projects, all of which expire at the end of this year.

Majority Leader Mitch McConnell (R-Ky.) said during a September 29 news conference that the Senate could “take a look at” the tax extenders during the lame duck session while Minority Leader Harry Reid (D-Nev.) has been pushing an extension of the credits for most of 2016.

As part of the tax extender deal, as well as the Fiscal 2016 omnibus spending bill, Congress agreed to a separate five-year extension of major wind production and solar investment tax credits. The measure, however, did not address credits for investments in geothermal, combined heat and power properties, fuel cell facilities and smaller wind projects. Both sides of the aisle have acknowledged that those credits were mistakenly left out, but Congress has yet to find an appropriate place to attach the extension.

The conservative groups have pushed back against the need for any of the renewable energy tax credits, arguing for an open market approach to energy, rather than allowing the federal government to choose “winners and losers” through favorable policies. “Government subsidies, loans, mandates, and tax policies regarding renewables have consistently failed to deliver on their promises of long-term job creation and economic viability,” the groups wrote. “Americans deserve access to energy solutions that are affordable and reliable — ones that should be able to stand on their own in the marketplace.”

The White House has made extending the left-out subsidies a priority in the lame-duck session of Congress, coordinating with the Democratic leadership for what one senior White House adviser called a clean energy “end game.”

Comments: Congressional sources signal there will likely be a one- or two-year extension of the tax extenders expiring at the end of this year, which include the biodiesel tax incentive. However, the time line on any such extension is murky pending results of November 8 elections.

NOTE: This column is copyrighted material; therefore reproduction or retransmission is prohibited under U.S. copyright laws.