Senator Max Baucus Might be Able to Extend Section 1603 Cash Grants for Wind Power Development

November 16th, 2010 by Susan Kraemer

Senator Baucus will find a way to extend a 30% cash grant program for wind power, he told NAW (North American Windpower) this week. The tax credit known as Section 1603 has done more than any Federal policy in the US in the last 30 years to jump start wind projects – and solar and geothermal projects as well. After the tax equity market vanished in 2008, the cash grant has done more than anything else to keep capital-intensive wind projects moving.

It might seem unlikely that this can be passed now, but when this Senator says he can find a way to do this, there is reason for hope.

After all, it was Baucus, as chairman of the Senate Finance Committee in 2008, that inserted the extension of tax credits that were about to expire, into the Bush bank bailout bill.

At the last minute, Baucus managed to insert it into the final version of the must-pass $700 billion bank bailout bill that was passed at the end of the Bush administration, during a time when the nation risked complete financial meltdown.

If you remember, the bank bailout became a must-pass bill. When the House voted it down on the first try, the Dow Jones slid 700 points in a day. After that Republicans and Democrats voted for it.

While the renewable measures were derided at the time as “pork” and “Christmas tree trimmings” the fact is that this nation needs renewable energy for its future energy security and renewables have received only a fraction of the subsidies that fossil energy gets. And direct renewable energy policy has been thwarted by the minority filibuster for a decade.

Building on that provision, the next year, as part of the American Recovery and Reinvestment Act of 2009, Democrats extended the tax credits by making them available as cash grants – and added a three-year extension of the production tax credit, which expires at the end of 2012. But that was during a brief three month 60 vote majority.

What Baucus did, was under the filibuster rule we have now. So, if there is one person who has proven himself capable of nimbly taking advantage of a crisis to insert good renewable energy language at the last minute into the sort of must-pass legislation that the minority can’t filibuster, it is clearly Senator Baucus.

No bloviating for months about contemplated energy bills, which have the effect of waving a red flag in front of a bull. Just quietly wait, then pounce, as the opportunity arises.

Fortunately, as it happens, we have exactly that kind of must-pass legislation coming up. The Bush tax-cuts-for-the-rich bill is one bill that will actually come up for a vote, because the Republicans won’t filibuster this one!

So, in this filibuster-proof bill, just as on the previous one, there could be an opportunity to quickly slide in good energy legislation the country needs.

It is too bad that energy policy has to be done by slipping it into non-energy bills. With peak oil and climate change breathing down our necks; how sad that this once promising nation is now incapable of passing good renewable energy policy to safeguard our future in a straightforward manner, like a sensible developed nation.

But there might be some reason for hope for passing this particular chunk of it now.

Image: Darren Spears
Susan Kraemer@Twitter

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Tags: 30%, cash grants, NAW, Section 1603, Senate finance committee, tax credits, wind industry

About the Author

Susan Kraemer writes at CleanTechnica, CSP-Today, PV-Insider , SmartGridUpdate, and GreenProphet. She has also been published at Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow, and Scientific American. As a former serial entrepreneur in product design, Susan brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention, solving climate change is the mother of all necessities! As a lover of history and sci-fi, she enjoys chronicling the strange future we are creating in these interesting times. Follow Susan on Twitter @dotcommodity.

http://www.smud.org Marco Lemes

I commend Sen. Baucus for committing to push the extension of sec. 1603 but concur with the other two commentators here that the extension should include other types of renewables resources. We are a publicly owned electric utility currently partnering with a few small local project developers giving their sweat and blood to implement local biomass-to-energy projects. These projects will bring economic and environmental benefits to the local community, California and the planet by creating jobs; generating revenue from the sale of electricity and high quality compost; generating tax revenues; finding alternative, higher use for organic waste; diverging waste from landfills; offsetting the use of fossil fuels; destroying volatile organic compounds (a smog precursor) as well as capturing and destroying greenhouse gases, among other benefits. The successes of these projects are very much dependent on the extension of sec. 1603. Without the extension and the inclusion of biomass projects, our community will probably not reap the benefits that these biomass-to-energy projects can provide.
http://www.innaten.com Hanafi R Fraval

The news that Sen Baucus is supporting a sec.1603 extension for wind is very positive for renewable energy. But what about biomass-based renewable energy? As former chairman of the Ag Biomass Council, and president of an anaerobic digester company, I can confidently write that were it not for the sec 1603 grant, our project would not be going ahead in California. It is literally the difference between go and NO go. And besides the renewable energy lost, it means raw manure continues to be spread on the land. Odor, flies, water issues, and general environmental mayhem continue. I do hope that biomass renewable energy is added to the sec.1603 extensions.
- http://cleantechnica.com/author/susan Susan Kraemer
  
  Amen. Also I hope the extensions will apply to solar and geothermal as well. Why any renewable has to beg for help every few years, when fossil energy – a mature industry – gets five times the subsidies…. (!!!!) However, I was unable to find that he had promised this in relation to anything but wind power.