The economic recovery legislation proposed by Democratic Congressional leaders last week is not finalized, however it appears to significantly improve incentives for the wind power industry, according to the American Wind Energy Association (AWEA).
The proposal includes a three-year extension of the production tax credit (PTC), which should make long range financial planning more secure for the industry.
Also, draft provisions would make it simpler for wind power and other renewable power developers to monetize tax credits.
The proposal does not technically make the PTC refundable--as asked for by the AWEA and Solar Energy Industry Association--but it provides comparable assistance through a U.S. Department of Energy (DOE) grant program, the AWEA said in a news release.
Under the proposed legislation, those who qualify for the PTC would have the option of converting the production tax credit to a 30% investment tax credit (ITC). This ITC could be used on a tax return or converted to a DOE grant of the same amount. Developers would also benefit from a five-year carryback of their operating losses and perhaps PTCs or ITCs. The bill will allow a leasing structure to facilitate monetization of accelerated depreciation.
The legislative package also includes provisions to promote transmission infrastructure for renewable energy, such as bonding authority for Western Area Power Administration (WAPA), Southwestern Power Administration, and Bonneville Power Authority to build transmission, most of which would be useful for wind, the AWEA said.
Third-party financing for WAPA transmission construction is also part of the package along with federal funding to enlarge currently planned transmission lines, an option that is popular with the Western governors.
Energy legislation slated for consideration later in the year reportedly will further address interstae transmission for renewable power.