Revised guidance issued by the U.S. Treasury Department is too narrow to “adequately contemplate” the unique challenges facing the nation’s offshore wind industry, according to U.S. Sen. Bill Cassidy (R-LA) and several colleagues, who earlier this week requested that the department extend tax protections for certain energy-related projects.
“Today, we write to encourage the Treasury Department to further extend the safe harbor provision, thereby providing ample relief across industries,” wrote Sen. Cassidy and a bipartisan group of his colleagues in a June 29 letter sent to U.S. Treasury Secretary Steven Mnuchin.
Specifically, the lawmakers seek a safe harbor extension for energy projects that qualify for the production tax credit (PTC) and the investment tax credit (ITC) to help projects that have been delayed due to disruptions caused by the COVID-19 pandemic, according to their letter.
“Extending the continuity safe harbor by a total of three years, in addition to the standard four-year period, for all open offshore wind projects… will fully address interruptions resulting from COVID-19,” Sen. Cassidy and his colleagues wrote. “These projects are important to many job creators in our states, including shipbuilders, manufacturers, offshore service companies, and offshore wind developers, among others.”
Additionally, while existing IRS guidance provides exceptions to the safe harbor period for specified setbacks in construction, these exceptions do not anticipate the wide-ranging interruptions faced by developers now or after the pandemic ends, wrote Sen. Cassidy and his colleagues.
“Even as projects slowly resume, operations are not likely to meet their prior efficiency levels for several years. To exacerbate matters, project construction must also be carefully timed around mammal migration patterns, among other factors,” according to their letter. “As such, COVID-19 implications will undoubtedly ripple beyond the scope of the pandemic itself. Accordingly, we request that you use your authority to provide relief sufficient to prevent devastation across the offshore wind industry.”
Joining Sen. Cassidy in signing the letter were U.S. Sen. Sheldon Whitehouse (D-RI) and seven other senators.