U.S. Rep. Thompson introduces Renewable Energy Parity Act of 2011 to 'level playing field' for renewable energy to qualify for full federal tax credit; landfill gas, tidal energy currently get half the US$0.022/kWh that wind, geothermal, biomass receive

WASHINGTON , June 24, 2011 (press release) – Congressman Mike Thompson (D-CA) today introduced H.R. 2286, the Renewable Energy Parity Act of 2011, bipartisan legislation that would ensure all renewable energy sources are able to compete in the growing market for renewable and alternative energy fuels. Under current tax law, some renewable energy technologies are only eligible for part of an existing federal tax credit for the development of alternative energy sources. The Congressman’s bill would level the playing field by extending the full tax credit amount to qualifying renewable energy technologies.

“Not all alternative energy technologies are treated equally under current tax law, and it’s hurting American consumers,” said Rep. Thompson. “If our country is going to be a leader in the emerging green economy, alternative energy technologies need to receive comparable tax credits for the energy they produce. That way, energy producers will have the necessary incentives to bring the best renewable energy technologies to the marketplace.”

Currently, companies that engage in the production and sale of electricity through the use of renewable energy technologies may qualify for a federal production tax credit under Section 45 of the U.S. tax code. However, only energy from wind, geothermal, and closed-loop biomass facilities qualify for the full tax credit amount of 2.2 cents per kilowatt hour. Other renewable energy technologies such as land-fill gas recovery and wave and tidal energy receive only half of that amount – 1.1 cents per kilowatt hour.

By extending the full tax credit amount to eligible alternative energy sources, Rep. Thompson’s legislation will give producers additional incentives to invest in cutting-edge energy technologies and bring more choices to the energy marketplace. In California’s First Congressional District, beneficiaries of the bill would include open-loop biomass power plants in Eureka, Scotia, Woodland, and Blue Lake. Open-loop systems, which burn waste wood to generate electrical power, are one of the renewable energy technologies that receive only a partial tax credit under current law.

"Congressman Thompson's leadership in supporting investment in biomass facilities, and advancements in technology, increase the opportunity to tap into potential domestic energy resources that are currently under utilized, or treated as waste," said Stephen Sorrentino, Vice President of DTE Energy Services, which operates a biomass power plant in Woodland. "And in addition to its environmental benefits, biomass power is good for the economy. America’s biopower industry provides some 14,000 quality jobs and generates about $1 billion a year for the nation’s economy. Each biomass power plant contributes about $8 to $14 million annually to the local communities where they operate in payroll, purchases, and property tax revenue.”

Biomass power is an important source of green energy and jobs in California. Biomass facilities provide approximately 1.5 percent of California’s overall power and over 17 percent of the state’s renewable power. The biomass industry employs about 750 direct jobs at the state’s 33 biomass facilities and 1,200 to 1,500 dedicated indirect jobs in the fuel supply infrastructure. Most of these jobs are in rural areas of the state, including parts of Northern California.

“At the Fairhaven facility in Humboldt County, our 22 permanent employees and more than 40 indirect supplier positions provide substantial economic benefits to the local economy, all while the facility produces more renewable energy than a wind or solar facility of perhaps three to four times its size,” said John Wood, Executive Vice President EWP Renewable Corporation. “Keeping these plants productive through Congressman Thompson’s proposal is critical to sustaining these renewable energy benefits and jobs in Humboldt County.”

Hugh Smith, President of Greenleaf Power, a California-based company that operates a biomass power plant in Scotia, added, "We applaud Congressman Mike Thompson for being supportive of the biomass industry. The Congressman understands that thousands of Americans rely on the biomass industry for their livelihood. While other forms of renewable energy receive greater publicity, biomass is a safe, reliable and renewable form of sustainable energy that promotes environmental stewardship."

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