WASHINGTON -- Anyone trying to turn wind, steam, sun or chicken droppings into energy would benefit from a tax credit bill introduced Tuesday by Sen. Harry Reid, D-Nev.
Reid said the legislation highlights a growing need for clean, renewable energy sources to help offset the energy crunch facing Western states.
The bill would give companies producing energy from wind, sun, small hydropower, geothermal or animal waste a permanent tax credit to help make alternative energy competitive with traditional sources such as oil and natural gas.
"By providing a permanent tax credit to producers who use wind, geothermal or other renewable energy, we can expand existing electricity production while also spurring new development," Reid said. The current tax credit for some alternative energy sources is set to expire at the end of 2001.
Nevada is home to several fledgling alternative energy ventures, including a future wind farm at the Nevada Test Site. Sponsors say that project could provide enough electricity within the next three years to power 260,000 homes.
"This was pretty bold," Jaime Steve, legislative director for the American Wind Energy Association, said of Reid's bill, although he said it likely would not pass. Steve said the Republican-led Congress more likely will support some sort of extension for current tax credits, but stop short of making them permanent.
Steve said various alternative energy tax incentives are popping up in Congress, and a final deal likely will be incorporated into a larger tax bill.
Reid's bill would allow alternative energy producers operating by Dec. 31 to take a production tax credit of 1.7 cents per kilowatt hour, a sum that Steve said would lower the cost of wind energy, in particular, to nearly equal what natural gas cost before recent price spikes.
Reid's measure expands the credit to different forms of biomass, such as chicken or hog droppings and pulp mill waste, and also to solar and geothermal producers. Currently, solar and geothermal producers may take a tax credit on capital investments, but not production.
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