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Orphan energy tax credits, miner pensions to get 'lame duck' attention

Soon-to-expiretax credits for geothermal heat pumps, small-scale wind power and other energysources may get a new chance for extensions during the upcoming "lameduck" session of Congress.

U.S.Senate Majority Leader Mitch McConnell, R-Ky., said at a Sept. 29 pressbriefing that lawmakers "are committed to taking a look at that"issue before the end of 2016, a statement that pleased energy developers andtheir allies.

"Inorder to avoid serious market disruption and provide businesses, investors,end-users, and consumers with the ability to plan in the short- to mid-term,renewing the tax credit is 'must pass,'" said Curt Beaulieu, an attorneyat the law firm Bracewell LLP, who works on behalf of geothermal heat pumpmanufacturers.

InDecember 2015, President Barack Obama signed five-year tax credit into law forlarge-scale wind and solar power projects as part of a fiscal year 2016spending bill. However, the legislation excluded extensions for other, smaller energy sources,including geothermal, fuel cells, combined heat and power facilities,small-scale wind, and micro-turbines.

Industrygroups such as the National Rural Electric Cooperative Association andDistributed Wind Association are backing the additional extensions. Bracewellsaid geothermal heat pumps can cut home heating and cooling bills by up to 70%,and about 45% of U.S. electric cooperatives use such technology in their energyefficiency programs. Hydropower and biomass energy advocates are alsohoping to push outtax incentives that are set to expire at the end of 2016.

"Leaders in the House andSenate agreed to include technologies, like geothermal heat pumps, that wereinadvertently left out of last year's deal on wind and solar," saidBeaulieu. "It makes no sense for Congress to offer just a partial fix forSection 48 and Sec 25D credits by either only addressing some technologies orsome of the sections."

Qualifyingbiomass, geothermal, hydropower and landfill-to-gas projects can receivea 30% investment tax credit under Section 48 of the internal revenue code aslong as the projects enter service by Dec. 31. Expenditures for fuel cell,small wind and geothermal heat pumps are also able to receivecredits under Section 25D as long as the projects are in service by Dec. 31.

McConnellon Sept. 29 also said the Senate will prioritize consideration of a during the lame ducksession that would use Abandoned Mine Land program funds to help shore upstrained pensions and healthcare programs for coal miners. The Senate Committeeon Finance voted on Sept. 21 to advance the bill, S. 1714, to the full Senatedespite concerns from GOP lawmakers that the proposal would set a precedent forstruggling pension plans in other industries.