Potential PTC extension; States emissions rules; GEA’s policy priorities

A congressional bill seeks to extend, then phase out the PTC. States want to work closely with EPA as it determines rules for existing plant emissions. GEA adopts its policy priorities.

Congressional Bill Seeks 6-Year Extension then Phase-out of PTC as Wind Energy Growth Declines in 2013
States Want to Work Closely with EPA on Emissions Rules
GEA Adopts 2013 Policy Priorities

Congressional Bill Seeks 6-Year Extension then Phase-out of PTC as Wind Energy Growth Declines in 2013
A bill introduced in the House by U.S. Representative Mike Fitzpatrick (R-PA) applies to the production tax credit for wind energy, which expires at the end of the year. Called the PTC Certainty and Phase-Out Act of 2013, H.R.2987 would extend the PTC for six years, followed by a complete phase-out. Project construction in 2013 must be able to demonstrate “significant work of a physical nature” and or show that 5% of costs have been incurred. 100 percent of the PTC would be extended through 2014, and in following years would decrease by 10 percentage points a year, until a complete expiration in 2020. In current growth, only 1.6 MW wind power was added in the U.S. in the first half of 2013. AWEA CEO Tom Kiernan told press: “The market pattern playing out in US wind energy right now tracks exactly with warnings sounded by the industry a year ago, and with studies that examined the consequences of not extending.” Nawindpower.com; Governorswindenergycoalition.org; Rechargenews.com

States Want to Work Closely with EPA on Emissions Rules
As the EPA is drafting its rules limiting emissions from existing power plants, state leaders seek to have state-level programs recognized. In a letter to EPA Administrator Gina McCarthy, the National Association of Clean Air Agencies asked EPA to recognize and provide incentives in order to maintain existing programs on the state level. In the letter, NACAA offers guidance principles such as flexibility and recognition of the varied nature of regions’ energy source makeup. The letter is available to read at Airweb.timberlakepublishing.com (PDF).

GEA Adopts 2013 Policy Priorities
The following are the 2013 policy priorities as adopted by the Geothermal Energy Association:

For the past few years, the geothermal energy industry has grown steadily, but slowly, while significantly expanding its geographical reach. This period of growth represents just the beginning of what is possible with a sustained federal-state-local effort to harness the nation’s vast geothermal resource base.

FEDERAL POLICIES TO SUSTAIN AND ENHANCE GROWTH:
Federal tax incentives and research support continue to be critical to mitigate and reduce the risks of geothermal development. Federal tax incentives and research support continue to be critical to mitigate and reduce the risks of geothermal development. Federal tax incentives that apply to all types of entities should be extended and made refundable to facilitate growth of a new geothermal energy industry in the US. In addition, geothermal energy projects should (as they are for oil and gas projects) be made eligible for organizations as Master Limited Partnerships (MLPs). Federal research funding — particularly for technologies to reduce subsurface risk and develop Enhanced Geothermal System (EGS) techniques — should be increased. DOE should also resume its very successful cost-shared exploration grant programs that encouraged expanded geothermal development and technological innovation – the Geothermal Resource Exploration and Development Program.

Federal leasing and permitting continue to be important factors that can be either drivers or obstacles for the geothermal industry. BLM should take an interagency lead to ensure the expedited handling of lease nominations and permit applications. BLM should seek to document current process timeframes and set a goal of cutting them in half. Congress should enacted several pending measures to modify the leasing program and streamline NEPA requirements including S. 362, S.363, and HR 1363, and it should also consider extending for ten years the BLM geothermal funding set-aside of royalty receipts enacted in the 2005 Energy Policy Act to provide the financial resources needed for leasing, permitting and support of cost-shared exploration.

INTERNATIONAL MARKETS:
Federal efforts to promote international renewable market development and US exports should continue to recognize that US geothermal firms operate in a very competitive global market. U.S. policies and programs to support US competitiveness in world markets should be enhanced and geothermal should be among the priorities for federal agency renewable exports efforts.

STATE INITIATIVES:
At the state level, we encourage policies to recognize the full value of geothermal power. Geothermal power can be firm or flexible, and avoid system reliability costs often associated with other sources. Both power procurement by utilities and rates approved by utility commissions should recognize the premium value of geothermal power. Further, as some western states consider reducing their coal-fired generation, geothermal power should play a significant role in replacing this generation while maintaining the system reliability baseload power provides. Geothermal should not be penalized by renewable accounting credit systems for having its fuel supply and transportation systems on-site.

Also, state financial incentives should support geothermal power development, in both utility and distributed generation modes, on the same basis as other renewable technologies. Today, several states provide significant incentives that apply only to one or two renewable technologies, unfairly discriminating against geothermal.

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