March 7, 2005

Bill Provides Incentives for Cleaner Energy

Washington, DC – Today, Senator Gordon Smith introduced bipartisan legislation to encourage development and use of renewable energy by extending crucial tax credits for electricity produced from renewable sources. The bi-partisan bill, introduced with Senator Byron Dorgan (D-ND) aims to promote renewable energy technology, spur economic development in rural America, and help the nation work toward energy independence and diversity.

“Our demand for energy is growing by leaps and bounds, but new environmentally friendly technologies are often expensive to implement,” Smith said. “I believe the government can play a key role in protecting the environment by providing market-based incentives to encourage the use of clean, renewable energy.”

The bill will provide a five-year extension of the valuable production tax credit (PTC) for facilities that generate electricity from renewable energy sources. That credit is now scheduled to expire at the end of this year, threatening expected investments in wind, geothermal, and other forms of renewable energy production. The bill also encourages additional development of renewable resources by allowing tax-exempt rural cooperatives, municipal utilities, and Indian tribes to benefit from the credit.

“As one of the world’s leading energy users, it’s prudent for us to take steps toward leading the world in cleaner power production,” said Smith. “It’s an important initiative and it provides real opportunity for Oregon’s renewable energy producers.”

Current law provides a 1.8 cent-per-kilowatt-hour credit for facilities that produce electricity from wind, geothermal, solar, biomass and other renewable sources. A reduced credit is available for electricity produced from open-loop biomass, small irrigation power and municipal solid waste. These credits are scheduled to expire at the end of this year. Smith’s bill would extend the availability of the credit for new facilities for five additional years, through 2010.

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