Sen. Chris CoonsChris Andrew CoonsDems punch back over GOP holdup of Biden SBA nominee Biden threatens more sanctions on Ethiopia, Eritrea over Tigray conflict Senate Democrats to Garland: 'It's time to end the federal death penalty' MORE (D-Del.) said Wednesday that he is optimistic enough Republicans will rally behind his renewable-energy financing bill to get it passed next Congress.
The bill would extend a tax structure known as a “master limited partnership” to renewable energy firms. Supporters say the tax code change would help move capital to projects involving solar, wind and biofuels.
Currently, it only applies to fossil-fuel projects, and supporters say it has helped boost financing for pipeline construction and oil-and-gas developments.
Coons said that is why oil-patch senators, such as Sens. Lisa MurkowskiLisa Ann MurkowskiGOP warns McConnell won't blink on debt cliff Graham tries to help Trump and McConnell bury the hatchet Trump, allies launch onslaught as midterms kick into gear MORE (R-Alaska) and Mary LandrieuMary Loretta LandrieuCassidy wins reelection in Louisiana Bottom line A decade of making a difference: Senate Caucus on Foster Youth MORE (D-La.), have signed on as co-sponsors.
The Delaware senator expressed confidence that Republicans and fossil fuel interests could be convinced to support the bill to shield the structure from becoming a tax-reform casualty.
Master limited partnerships “are well-known, well-established, and I think would be vigorously defended by the traditional energy sector that has relied on them for more than 30 years,” Coons said at a Wednesday press conference.
Master limited partnerships in the U.S. have reached a market capitalization of $350 billion, with more than 80 percent of capital funding devoted to oil-and-gas projects.
The arrangement is taxed like a partnership and traded like a stock. Proponents say that helps drive down capital costs by bringing in more investors and taxing those partnerships at one level instead of two.
While Coons said he would reintroduce the bill next Congress, he noted discussions are ongoing about how broadly to define renewable energy and whether to include energy efficiency projects.
Sensitive to Republican calls to reduce the deficit, Coons suggested the cost to government would be “modest.” Though the bill has not received a score from the Congressional Budget Office, he estimated it would cost less than $1 billion.
Coons acknowledged that some lawmakers representing areas heavy in fossil fuels might hesitate to support the bill, as it could help renewables cut into energy markets currently dominated by coal, natural gas and petroleum.
But Rep. Ted PoeLloyd (Ted) Theodore PoeSheila Jackson Lee tops colleagues in House floor speaking days over past decade Senate Dem to reintroduce bill with new name after 'My Little Pony' confusion Texas New Members 2019 MORE (R-Texas), a cosponsor of the House version, said Wednesday that he backs the bill even though, “I represent probably more refineries in Texas than any member of Congress anywhere in the country.”
Coons pointed to Poe as the type of Republican lawmaker who could help bring other GOP legislators behind the bill.
“As they come on and support it, more and more Republicans or people who are from traditional oil-and-gas states and regions will recognize that this is a way that everybody can win,” Coons told The Hill after the press conference.
Poe said he has witnessed how effective the structure has been for investment, and said it would help create jobs if extended to renewables.
Master limited partnerships would decrease uncertainty in the industry, as firms often depend on subsidies that require regular congressional reauthorization, Dan Reicher, an Energy Department official for former President Bill ClintonWilliam (Bill) Jefferson ClintonFive takeaways from Arizona's audit results Virginia governor's race enters new phase as early voting begins Business coalition aims to provide jobs to Afghan refugees MORE, said at the press conference.
He said they would help firms grow by establishing some stability for investors.
“A big tent is helpful,” Reicher, who is currently executive director of the Steyer-Taylor Center for Energy Policy and Finance at Stanford University, said of expanding the financing structure.
Coons said he wants the White House to champion the partnerships next Congress. He said he has spoken to several senior Obama administration officials about the bill.
Coons, along with bill co-sponsors in the House and the Senate, sent a letter to President Obama on Wednesday to voice support for master limited partnerships.
They also advocated extending real estate investment trusts, which operate in a similar manner, to renewable energy. They have largely been used for collecting investors for electric power transmission lines.
While Congress would have to pass legislation to include renewables in master limited partnerships, executive action could fold renewables into real estate investment trusts.
“Small tweaks to the tax code could attract billions of dollars in private sector investment to renewable energy deployment, reduce the cost of renewable electricity by up to one third, and dramatically broaden the base of eligible investors,” the bipartisan group of 29 lawmakers said in the letter.