WASHINGTON (AP) — The multitrillion-dollar tax breaks package passed by House Republicans early Thursday would gut clean energy tax credits that Democrats approved three years ago while supporting increased mining, drilling and other traditional energy production.

A marathon session that began Wednesday resulted in 1,100-plus page legislation that curbs billions of dollars in spending across food assistance, student loans, Medicaid and action to address climate change.

The bill, which now heads to the Senate, repeals or phases out more quickly clean energy tax credits passed in the 2022 Inflation Reduction Act during former President Joe Biden’s term. Biden’s climate law has been considered monumental for the clean energy transition, but the House bill effectively renders moot much of the law’s incentives for renewable energy such as wind and solar power.

Clean energy advocates said the bill walks back the largest government investment in clean energy in history.

“In a bid to cut taxes for billionaires and provide a grab bag of goodies to Big Oil, the majority in the House took a sledgehammer to clean energy tax credits and to the protection of our public lands,” said Christy Goldfuss, executive director of the Natural Resources Defense Council.

“These credits are delivering billions of dollars in new investments in homegrown American energy — creating jobs, lowering energy costs and addressing the climate crisis that is fueling floods, fires and heat waves,” Goldfuss said.

President Donald Trump celebrated the bill’s passage, calling it “arguably the most significant piece of Legislation that will ever be signed in the History of our Country.” Trump appealed to the Senate to pass the measure as soon as possible and send it to his desk.

The Senate hopes to wrap up its version by early July. At least four Republican senators, led by Lisa Murkowski of Alaska, have urged continuation of energy tax credits, including support for traditional and renewable energy sources. Republican-led states and Congressional districts have benefited from billions of dollars in clean energy manufacturing investments spurred by the Biden-era subsidies.

Full-scale repeal of current credits “could lead to significant disruptions for the American people and weaken our position as a global energy leader,” the senators said in a letter to Senate Majority Leader John Thune, R-S.D.

“A wholesale repeal, or the termination of certain individual credits, would create uncertainty, jeopardizing … job creation in the energy sector and across our broader economy,” the senators wrote in the April 9 letter. The letter was also signed by GOP Sens. John Curtis of Utah, Thom Tillis of North Carolina and Jerry Moran of Kansas.

In a win for House moderates and some Western lawmakers, the House bill strips language that would have allowed the sale of hundreds of thousands acres of public lands in Utah and Nevada. Opponents argued the sales would have opened the door for more oil and gas drilling.

What was gutted in the bill

The House bill takes an axe to tax credits for rooftop solar installments and eliminates electric vehicle tax credits after 2025, with a one-year exception for EVs manufactured by automakers that have sold fewer than 200,000 cars that qualified for the credit.

Credits for solar and electric vehicles, which reduce harmful emissions, help to boost demand for the technologies and drive down their cost.

House Republicans also tightened tax credit restrictions for projects associated with foreign entities, including China — an added blow to domestic clean energy expansion since China dominates much of the supply chain.

The bill slashes a three-year phase-down schedule previously proposed, and instead cuts off projects that don’t start construction within 60 days of the bill’s passage. Those projects would also have to start operating before 2029.

“This bill threatens the clean energy industry at a time when it’s proving to be not only economically beneficial — lowering costs, creating jobs and fueling local economies — but also essential to America’s energy future,” said Andrew Reagan, president of Clean Energy for America, an industry group.

The American Petroleum Institute, which represents the oil and gas industry, applauded the bill as a step to “restore American energy dominance.”

“By preserving competitive tax policies, opening lease sales” for oil and gas drilling and advancing permitting reforms, the legislation “is a win for our nation’s energy future,” API President Mike Sommers said in a statement.

No sale of public lands

At the behest of Montana Rep. Ryan Zinke and some other Republicans, lawmakers stripped a provision that would have sold or transferred about 460,000 acres of federal land in Nevada and Utah to local governments or private entities.

The proposal exposed sharp divisions between Western Republicans who say the federal government controls too much of their states and others such as Zinke, a former Interior secretary in Trump’s first term whose state is protective of access to lands for hunting and recreation.

“At the heart of the matter is that public land that’s in the federal estate belongs to everybody,” Zinke told The Associated Press on Thursday. “To suggest that you’re going to sell land to pay off the debt, I think that’s misguided and, quite frankly, disingenuous.”

The land sales had been inserted in the bill following a late-night committee vote, despite earlier pledges from Republican leaders that the sales were off the table.

Supporters said they would generate revenue and ease growth pressures by creating room for more and cheaper housing in booming Western cities such as Las Vegas, Reno, Nevada, and St. George, Utah. Those communities are hemmed in by federal property, which makes up 80 percent of the land in Nevada and 63 percent in Utah.

A spokesperson for Nevada Republican Rep. Mark Amodei, who sponsored the bid to sell federal lands in his state, said his office was “exploring all options” to make the transfers happen.

Housing advocates had cautioned federal land is not universally suitable for affordable housing, and some of the parcels to be sold were far from developed areas.

Tracy Stone-Manning, president of the Wilderness Society and a former director of the Bureau of Land Management under Biden, said she appreciated Zinke’s work to prevent the public lands sale.

But she said the bill was still a “big giveaway” to the private sector. “By opening hundreds of millions of acres to drilling, mining and logging to pay for tax cuts for the wealthy, this bill harms the tens of millions of people who like to hike, recreate or find solace in the outdoors,” she said.

Trump targets Biden’s climate policy

At the same time the bill slashes support for clean energy, it paves the way for oil, gas and coal.

Through the bill, natural gas pipeline developers can pay a $10 million fee for expedited permitting, and applicants for a potential liquefied natural gas export site can pay a $1 million fee to be deemed in the “public interest,” circumventing what is usually a regulatory challenge.

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The leaves in Portland’s abundant spring foliage aren’t the only ones that will be getting attention this year.

Nissan dealers can start taking orders today for Nissan’s new all-electric LEAF vehicles, which will be rolled out in the Rose City in December, according to . Future electric car owners can begin placing reservations on May 15 to buy or lease one. Over 115,000 people so far have expressed interest in testing out the new vehicle, according corporate communications for Nissan Americas.

Owning an electric car has been a dream of mine ever since my dad bought me a red, remote control Ferrari for my seventh birthday. But it’s a dream that will have to wait. At a suggested retail price of $32,780, I think I’d have to sell my current car, all of my worldly possessions and my first born to cash in on the all-electric dream.

Still, for those of you with more pocket change than myself, there are some incentives out there that could bring the cost of a LEAF down, including a $7,500 federal tax credit and a 1,500 Oregon state tax credit.  And leasing a LEAF will run you $349 per month.

On Tuesday, April 27, Nissan’s senior vice president of North America Brian Carolin will be speaking at the Portland Business Alliance’s annual meeting on the significance of Portland being a test market for the company’s new electric car. That presentation will be from 7:30 to 9 a.m. at the Oregon Convention Center, Oregon Ballroom.

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The leaves in Portland’s abundant spring foliage aren’t the only ones that will be getting attention this year.

Nissan dealers can start taking orders today for Nissan’s new all-electric LEAF vehicles, which will be rolled out in the Rose City in December, according to . Future electric car owners can begin placing reservations on May 15 to buy or lease one. Over 115,000 people so far have expressed interest in testing out the new vehicle, according corporate communications for Nissan Americas.

Owning an electric car has been a dream of mine ever since my dad bought me a red, remote control Ferrari for my seventh birthday. But it’s a dream that will have to wait. At a suggested retail price of $32,780, I think I’d have to sell my current car, all of my worldly possessions and my first born to cash in on the all-electric dream.

Still, for those of you with more pocket change than myself, there are some incentives out there that could bring the cost of a LEAF down, including a $7,500 federal tax credit and a 1,500 Oregon state tax credit.  And leasing a LEAF will run you $349 per month.

On Tuesday, April 27, Nissan’s senior vice president of North America Brian Carolin will be speaking at the Portland Business Alliance’s annual meeting on the significance of Portland being a test market for the company’s new electric car. That presentation will be from 7:30 to 9 a.m. at the Oregon Convention Center, Oregon Ballroom.

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A German company specializing in roof-mounted photovoltaic systems may construct a new manufacturing facility in Gresham, according to a recent announcement by the federal government.

President Barack Obama today announced the award of $2.3 billion in Recovery Act Advanced Manufacturing Tax Credits for clean energy manufacturing projects, including three projects in Oregon. The includes a $4.74 million credit for Centrosolar Oregon LLC to build a manufacturing plant for photovoltaic solar modules based on crystalline silicon cells in Gresham.

Gresham’s communications director Laura Bridges-Shepard says that details on the potential construction project are being confirmed today.

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RELATED

BETC pass-through change » The Oregon Department of Energy on Friday released new rules for the Business Energy Tax Credit pass-through option, which allows project owners to transfer the BETC to a partner in exchange for a cash payment. Read More

The sun was shining on Oregon’s renewable energy industry Friday with an influx of nearly $90 million in federal tax credits and the announcement of two major projects to build solar facilities. But concerns remain that proposed changes made to the state’s Business Energy Tax Credit could discourage companies from investing in the emerging Oregon market.

President Barack Obama on Friday announced the award of $82.2 million in Recovery Act Advanced Energy Manufacturing Tax Credits to SolarWorld Industries America Inc. of Hillsboro and $4.74 million to CentroSolar Oregon LLC, which plans to construct a new photovoltaic manufacturing plant in Gresham. In addition, Obsidian Financial Group LLC announced it would develop a 5-megawatt, utility-scale, ground-mounted solar photovoltaic project near Christmas Valley.

But Matt Slavin, president of Sustainability Consulting Group, said that in a constrained financial environment, private renewable projects, such as those proposed by CentroSolar and Obsidian, are dependent on the BETC. New rules for the pass-through option released Monday provide more capital to project owners, but reduce the tax credits given to pass-through partners.

“I am concerned about companies finding private project incentives (in Oregon) to be enough at this point,” Slavin said. “Firms are starting to return to profitability, but whether or not new rules for BETC will prove sufficient remains to be seen.”

Tax breaks given to SolarWorld in 2008 allowed the photovoltaic manufacturer to construct its current facility in Hillsboro. A year later, the company is over halfway to its goal of hiring 1,000 new employees, and just completed a new module manufacturing facility.

SolarWorld representative Ben Santarris said that tax credits, such as the BETC, make solar manufacturing on U.S. soil more economically feasible, and help his company compete with those in countries such as Japan and Germany, which subsidize solar more heavily. The company in the past has used the pass-through option to pay for projects, Santarris said.

“We’re monitoring the changes to BETC,” Santarris said. “They influence not only our operation but the demand for solar. BETC defrays our costs and the costs of our end customers.”

Portland company Iberdrola Renewables has several new projects on the drawing board, but is waiting to see how the state Legislature reacts next month to proposed BETC changes. Kevin Lynch, director of policy and regulation for Iberdrola, said the BETC pass-through option is important to his business, which depends on outside investment. Iberdrola’s projects include wind, thermal energy and solar.

“Our business is investment heavy, and our projects take a long time to produce taxable income,” Lynch said. “There needs to be some way for companies making long-term investments to realize the long-term incentives BETC provides.”

Similarly, David Brown, senior principal with Obsidian, said his company has put several projects on hold due to investors’ uncertainty about what will happen to the BETC. The company plans on breaking ground on its new array in Christmas Valley in March if all goes well.

“BETC rules are vague and uncertain, which causes investors to say they can’t commit until those uncertainties are cleared up,” Brown said. “We think we can work through this, but for now it has stalled any additional projects.”

Lynch disagreed with statements made by Gov. Ted Kulongoski that wind energy has become a mature/stand-alone market, and said that soft electricity prices are causing challenges with developing new wind projects. Large wind energy projects have been the most heavily scrutinized in the process to overhaul the BETC.

“The demand for electricity is lower today,” Lynch said. “And the price of electricity is softer than it was two years ago, which makes the credit more important. I would disagree that the wind energy industry has stabilized.”

Slavin noted that plans for more wind projects have been tied to a federal renewable-energy standard that probably won’t be in place for another year, making BETC’s fate important to renewable businesses in Oregon.

“Congress is pretty well burned out with the health-care bill,” Slavin said. “Wind is facing constraints from the credit crunch, and raising capital is difficult. Whether or not there will be a national renewable-energy standard remains to be seen.”

The Legislature in February will debate changes to BETC, based on recommendations by the Oregon Department of Energy.

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In the debate over scaling back Oregon’s renewable energy tax credits, both sides agreed on one thing: The credits are some of the best, if not the best, in the nation. They split over where the cuts would leave Oregon.

On Friday, Gov. Ted Kulongoski vetoed a bill that would have reduced credits for big wind power projects. In doing so, Kulongoski acknowledged that cuts could make Oregon look less attractive to renewable power producers.

House Bill 2472 would have reduced the projected value of the credits from $144 million to $125 million over the two-year budget cycle.

The cuts would have affected larger wind projects. Oregon’s maximum credit for large wind projects would have been reduced from $10 million to $3.5 million. Wind power producers balked, saying that the cuts would make the credits less valuable than those offered in Washington state.

Suzanne Leta Liou of the Renewable Northwest Project, a coalition of energy producers and supporters, said during the Oregon Legislature’s debate that the Washington Legislature had renewed its tax credits during the last legislative session. Oregon would send the wrong message about its long-term commitment to renewable energy by cutting the credits, she said.

On Friday, Liou said that the way in which the state preserved the credits is less important than the fact that the credits were preserved. “We are hopeful that what came across is that Oregon didn’t move backward,” she said.

Kulongoski had inserted himself in the debate over the bill in June, telling lawmakers he wouldn’t support a bill that cut the value of the credits to below where they were in 2007. Spokesman Rem Nivens said at the time that Kulongoski didn’t believe the bill did so, but hadn’t decided whether he would sign it.

Kulongoski’s notice that he intended to veto the bill upset supporters, who felt they had crafted a compromise that specifically addressed the governor’s concerns. The veto will leave a hole in the state’s budget that must be accounted for elsewhere, said Sen. Ginny Burdick, the bill’s main supporter in the Senate and a member of the conference committee that settled differences between the House and Senate versions.

“At a time of budget shortfalls, it doesn’t make any sense for me,” Burdick said.

The budget effects of the veto won’t be felt immediately, said Kulongoski spokeswoman Anna Richter Taylor, and can be plugged with the state’s ending balance. The credits are paid out to businesses over a two-year period.

The governor wants the state Department of Energy to study the costs and benefits of the wind credits, Richter Taylor said, before making cuts. Kulongoski also believes some clearer guidelines could be set for the credit program to prevent abuses, she said, and plans to work with the Legislature before the 2010 off-year session.

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