House votes to extend renewable energy tax rebate

It looks as if developers of renewable energy projects in the Gem State may have a few more years to build while receiving a tax incentive to do so.

Members of the House voted 41-25 to approve a sales tax rebate bill for developers of renewable energy projects.  The measure now heads to the Idaho Senate for consideration.

If the bill passes the Senate and is signed by the governor, most projects would have until Dec. 31, 2014, to claim rebates.  Those who do claim rebates must have projects in production of electricity by the deadline.

Wind projects, however, would have to all contracts signed by Oct. 31, 2011.  That provision was inserted into the legislation because stakeholders wanted to allow 18 contracts pending before the Idaho Public Utilities Commission finish the approval process.  A lobbyist for wind energy developers said that the 18 projects were crafted with the tax rebate in mind and that yanking the rebate could lead to some projects being cancelled.

Rep. Erik Simpson, R-Idaho Falls, offered passionate debate, saying that the rebate will lead to higher power rates.  He also argued that the rebate is an example of the state subsidizing an industry. “At what point do rebates become entitlements?” asked Simpson.  “It’s got to stop now. Let’s just let these things sunset.”

Rep. Steve Hartgen, R-Twin Falls, said that wind turbines are a money-maker for the state because power generated is sold in the Las Vegas market at higher rates.  He argued that Idaho should take advantage of its natural resources to generate additional tax revenues.

Rep. Ken Roberts, R-Donnelly, has been a staunch proponent against extending the rebate for wind projects during development of the legislation.  Roberts says that wind farms aren’t constantly producing power, which creates a problem in the state’s energy portfolio.

House Revenue and Taxation Committee Chair Rep. Dennis Lake, R-Blackfoot, said that developers will need to spend hundreds of millions of dollars to build projects only to receive millions of dollars in tax rebates.  That, Lake said, means an overall increase in tax revenue for the state.   “We like the economic development,” said Lake.  “We like that they’re spending money.”

Rep. Pete Nielsen, R-Mountain Home, said that the tax rebate manipulates the markets and skews Idaho’s energy offerings.  “Base load is what we really ought to be after, not intermittent,” said Nielsen.

Rep. Eric Anderson, R-Priest Lake, said that though the bill isn’t perfect, it’s a step in the right direction.  “It’s the exports of the state or a nation that creates the wealth, not the imports,” said Anderson.

 

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