FEDERAL UPDATE: MLPs, Other Energy Tax Reforms Get Aired

Posted by Malcolm Woolf on May 3, 2013 10:06:00 AM

energy tax reform capitol congressIt has been a busy couple of weeks on Capitol Hill, with legislation introduced to open up Master Limited Partnerships, bipartisan meetings around energy tax reform, and a Senate hearing on hydropower.

Last Wednesday, Sen. Chris Coons (D-DE) introduced S.795, the Master Limited Partnerships Parity Act, bipartisan legislation which would expand eligibility for Master Limited Partnership (MLP) business structures.  MLPs are taxed as partnerships but with ownership shares traded like corporate stocks, contributing to lower cost of capital and greater liquidity than traditional energy financing.  The decades-old corporate structure is currently available only to oil, natural gas, coal and pipeline projects, so allowing its use for renewable energy projects would be real progress towards a level playing field.  Co-sponsors of the bill include Senators Jerry Moran (R-KS), Lisa Murkowski (R-AK), and Debbie Stabenow (D-MI).

Tax reform is another opportunity to level the playing field for advanced energy technologies.  The Senate Finance Committee has held weekly bipartisan meetings on tax reform and made energy policy the focus of last Thursday’s closed-door discussion.  The Committee also released an Options Paper focused on infrastructure, energy and natural resources - the fourth in its series of papers presenting tax reform options in various industries.  We noted several parallels between the reform options identified by the Committee and AEE’s principles for tax reform, such as providing businesses with greater certainty, offering tax benefits on a technology-neutral basis, and allowing incentives to expire once technologies become cost-competitive.  

Sen. Ron Wyden (D-OR), chairman of the Senate Energy and Natural Resources Committee, last week honed in on hydropower, praising its role in U.S. power generation and calling on existing dams to generate an additional 60 gigawatts by 2025.  Several pieces of bipartisan legislation came before his Committee the next day, all geared towards streamlining the permitting of small hydro: the Hydropower Improvement Act of 2013, H.R. 267, the Hydropower Regulatory Efficiency Act of 2013, and the Bureau of Reclamation Small Conduit Hydropower Development Act (H.R. 678, S. 306).  On May 8, the Committee will hold a business meeting to mark up these bills as well as the Shaheen-Portman energy efficiency bill (S. 761, Energy Savings and Industrial Competitiveness Act of 2013).   

In election news, Rep. Edward Markey (D-MA) on Tuesday defeated fellow Rep. Stephen Lynch (D-MA) in the Democratic primary election for the U.S. Senate seat vacated by now-Secretary of State John Kerry.  Rep. Markey, a known supporter of advanced energy, will face Republican nominee Gabriel Gomez in the general election on June 25.  

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Topics: Federal Policy