Certain financing tools would be expanded to all types of energy resources and infrastructure projects under a bipartisan bill led by U.S. Sen. Jerry Moran (R-KS).
“Being energy independent requires an all-of-the-above approach to energy production,” Sen. Moran said on Feb. 20. “Emerging renewable energy companies currently do not have access to a number of tax incentives available to other energy companies.”
Specifically, the Financing Our Energy Future Act, S. 510, which Sen. Moran sponsored on Feb. 11 with lead original cosponsor U.S. Sen. Christopher Coons (D-DE), would allow renewable energy resources and infrastructure projects to form as master limited partnerships (MLPs), a tax structure currently only available to traditional energy projects, according to a bill summary provided by the lawmakers.
Newly eligible energy sources would include advanced nuclear, sustainable aviation fuel, hydrogen, biodiesel, biomass, and carbon capture, among others.
“Expanding these incentives to more companies will increase U.S. energy production, spur innovation, and help reduce prices for consumers,” said Sen. Moran.
An MLP is a business structure that is taxed as a partnership but its ownership interests are traded like corporate stock on a market. By statute, MLPs are currently only available to investors in energy portfolios for oil, natural gas, coal extraction, and pipeline projects. For projects to be an MLP, at least 90 percent of the project’s income must come from these sources.
The proposed legislation would amend the Internal Revenue Code to extend the publicly traded partnership ownership structure to renewable energy power generation projects, the summary says.
“At a time when the United States needs to boost domestic energy production, Congress should ensure all energy sources are competing on a level playing field,” said Sen. Coons. “The Financing our Energy Future Act is a straightforward, bipartisan solution that will bolster investment in American energy projects, create good-paying jobs, and accelerate our transition to cleaner energy sources.”
The bill has garnered support from the Nuclear Innovation Alliance, the Energy Infrastructure Council, the American Clean Power Association, the Bipartisan Policy Center Action, and ClearPath Action.
The measure, which has nine other original cosponsors, including U.S. Sen. Susan Collins (R-ME), has been referred for consideration to the U.S. Senate Finance Committee.