The Federal Energy Regulatory Commission (FERC) took swift action to respond to the recent United Airlines v. FERC decision regarding income tax allowances, as well as to implement changes stemming from the Tax Cuts and Jobs Act “to ensure that the economic benefits related to the reduction in the Federal corporate income tax rate are passed through to customers.” Specifically, FERC revised its income tax allowance policy for Master Limited Partnership (MLP) pipelines, with implications for other pass-through entities. In addition, it acted to implement federal income tax rate reductions and ordered changes affecting all FERC regulated entities.
Continue Reading FERC Acts on Income Tax Allowance and Implements the Tax Cuts and Jobs Act

The renewables industry can breathe easier this weekend as details emerge from whirlwind negotiations that appear to clear the path toward passage of the first comprehensive tax bill in more than 30 years.

The final language, released by the Conference Committee last night, scraps a House provision which would have effectively gutted Production Tax Credits (PTCs) critical to the wind industry; eliminates the corporate Alternative Minimum Tax; and takes the teeth out of the so-called BEAT (Base Erosion Anti-Abuse) Tax
Continue Reading Congressional Compromise Mollifies Renewable Industry Concerns

Renewable energy developers believed to have dodged a bullet in the Senate’s tax reform bill face newfound concerns as the upper chamber works toward expected final passage this week. While the Senate bill preserves important Production Tax Credits (PTCs) that had been significantly rolled back in the House, it also contains a provision which would severely undercut the value of tax equity credits relied upon by institutional investors to justify upfront investments in wind and solar projects.
Continue Reading “Base Erosion Tax” Poses Newfound Threat to Wind and Solar Development

As expected, the U.S. House of Representatives passed its massive tax overhaul plan today, largely along party lines.  The House package significantly scales back important production tax credits (PTCs) which renewable industry supporters believe have jump-started new investment.  All eyes now turn to the Senate as a backstop to keep these incentives in place.
Continue Reading House Passes Tax Overhaul Plan, PTC Cuts Intact

This morning the House Ways & Means Committee rejected an amendment attempting to restore existing tax breaks for wind energy projects.  This essentially leaves it up to Iowa Senator Charles Grassley (R-IA) and other historically strong supporters of wind energy to protect these incentives in the Senate Finance Committee version of the bill.  The Republicans’ slim majority in the Senate, especially given Sen. Grassley’s prior threats that wind energy tax credits will be eliminated “over my dead body,”  suggests there may be
Continue Reading House Ways & Means Rejects Amendment to Restore PTC

On November 3 the U.S. House of Representatives released  the “Tax Cuts and Jobs Act” (the Act) which contains provisions that will significantly affect production tax credits (PTC) for wind projects.  Based on a review of Section 3501 of the initial draft and conversations with legislative staffers, we expect the potential financial impact to negatively affect planned expansions in wind capacity in the United States.
Continue Reading Proposed Cuts to Production Tax Credits Would Negatively Impact Wind Development