House Approves Landmark Bill to Increase Wind Energy, Ethanol and Biodiesel Production

Press Release

HOUSE APPROVES LANDMARK BILL TO INCREASE WIND ENERGY, ETHANOL AND BIODIESEL PRODUCTION

Herseth Sandlin Helps Pass Legislation That Will Facilitate Wind Energy and Biofuel Projects in South Dakota

Renewable Energy and Energy Conservation Act Extends Production Tax Credit for Renewable Electricity; Strengthens Key Biofuels Tax Credits

Rep. Herseth Sandlin supported legislation today that will help ensure South Dakota's continued national leadership in the production of biofuels like ethanol and biodiesel and provide important incentives to help our state meet its enormous potential for wind energy development. The Renewable Energy and Energy Conservation Act will increase the production of renewable electricity by providing a long-term extension, until 2012, for the renewable energy production tax credit. Additionally, the bill provides strong new tax credit incentives for the production of renewable biofuels like ethanol, including ethanol derived from cellulosic sources, and biodiesel.

Rep. Herseth Sandlin said, "South Dakota has already proven that it is a pioneer when it comes to the production of renewable biofuels like ethanol and biodiesel. This bill will help ensure we can continue to be a national leader in renewable biofuels as we create jobs and enhance our national security at the same time. But just as important is the fact that this bill includes a long-term extension of the production tax credit for wind energy projects - a provision that I believe will give investors and entrepreneurs the certainty they need to begin new projects that take advantage of what we know is enormous, unmatched potential for wind energy in our state."

Herseth Sandlin added that the production tax credit has been allowed to expire several times in the past several years, each time with devastating effects for the continued development of wind energy infrastructure. She said, "We can't keep allowing this industry to only develop in fits and starts. We need a real commitment to wind in our energy policy."

Notably, the bill refocuses our national energy policy domestically, by eliminating tax breaks for large oil companies and reinvesting those resources in renewable homegrown energy like wind and biofuels. Herseth Sandlin added, "With families paying skyrocketing prices at the pump, and our addiction to oil becoming a national security issue, it simply doesn't make sense to continue to give away billions in taxpayer subsidized handouts to big oil companies who are recording record profits. Those resources are better focused here at home, in rural America and in renewable energy."

The bill contains a number of significant provisions to promote the development of renewable sources of energy. Specifically, it:

* Provides for a long-term extension and modification of the renewable energy production tax credit. The bill extends the placed-in-service date for three years through December 31, 2011 for qualifying facilities such as wind farms.
* Creates and authorizes through 2010 a new 50 cent production tax credit for cellulosic alcohol produced for use as a fuel in the United States.
* Extends through December 31, 2010 the $1.00 and 50 cent per gallon production tax credits for biodiesel and the small biodiesel producer credit of 10 cents per gallon.
* Extends through December 31, 2010 the $1.00 per gallon production tax credit for diesel fuel created from biomass.
* Provides for New Clean Renewable Energy Bonds ("CREBs") by authorizing $2 billion of new clean renewable energy bonds for public power providers and electric cooperatives for qualifying facilities.

The costs of providing these incentives will be offset and made "revenue neutral" by freezing tax breaks provided to large, integrated oil and natural gas companies. In December, the House-passed energy bill included the tax incentives approved today but also the establishment of a National Renewable Electricity Standard (RES). However, due to the objections of Senate Republicans and the White House, the House-passed energy bill fell one vote short of winning consideration in the Senate. Ultimately, the tax package and RES were stripped from the energy bill that became law.

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