By Zack Colman - 12/19/12 10:36 PM EST
The Obama administration lent its support Wednesday to a congressional effort that would open a financing structure for renewable energy.
Energy Secretary Steven Chu called on Congress to approve legislation that would let investors utilize master limited partnerships for renewable energy, which he said would spur development.
“It’s a world of difference and it will have a profound effect on capital private investment,” Chu said during an Energy Department event on wind energy.
Master limited partnerships are financing structures that are taxed like a partnership and traded like a stock. The arrangement reduces capital costs by spreading it among a greater number of investors, and by taxing the entity at one level instead of two.
Currently, the mechanism is available only to coal, gas and oil projects. It has been instrumental in funding pipeline construction across the country.
Sen. Chris CoonsChris CoonsOfficials skip Cruz-led hearing on ‘radical Islam’ Overnight Defense: GOP blasts latest Gitmo transfer | Boeing defends Iran Air deal Key Dem: US-Iran relations may get worse before they get better MORE (D-Del.) is leading the congressional push to expand master limited partnerships to renewable energy. The concept has picked up bipartisan support in the Senate, and he predicted it will pick up more backers from both sides of the aisle next Congress.
Coons said last week that he had raised the issue with senior administration officials, and that he hoped the White House would advocate for the change.
It appears that message has reached Chu.
He said Wednesday that opening master limited partnerships would “level the playing field” for renewables, such as wind, with other energy investments.
“If the cost of financing goes down — guess what — the cost of wind goes down,” Chu said.