White House Backs Plan for Renewable Energy Industry Tax Partnerships

Highlights :

The oil and gas industry has financed billions of dollar in pipeline and storage products under MLPs since President Ronald Reagan first signed legislation in 1986 allowing them as a way to spur energy investment.

The White House is backing a plan by House of Representatives Democrats to let renewable energy firms form tax-advantaged partnerships that the oil and gas industry has used for decades to build out the U.S. pipeline and storage infrastructure, according to recent reports in the media.

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The expansion would allow the renewable energy industry – from wind and solar to biofuels like ethanol – to form master limited partnerships, known as MLPs, that combine the funding advantages of corporations with the tax advantages of partnerships.

Some environmentalists had urged the White House to back a competing plan that would eliminate MLPs for the fossil fuel industry, arguing that the structure gives financial incentives to spur growth in oil and gas at a time when President Joe Biden’s administration is trying to lower carbon emissions.

The oil and gas industry has financed billions of dollar in pipeline and storage products Wind Energy Accounted for 42% New U.S. Capacity in 2020under MLPs since President Ronald Reagan first signed legislation in 1986 allowing them as a way to spur energy investment.

The renewable energy industry has long sought access to the corporate structure as a way to even the playing field. The expansion is included in Democratic-backed $3.5 trillion spending legislation being considered in the House.

The Clean Power Quarterly Market Report, recently released by the American Clean Power Association (ACP), shows that U.S. project developers installed nearly 40 percent more wind power in the first three months of 2021 than in the first three months of 2020, the strongest year ever for clean power. This amount of development also represents nearly three times the amount of wind added to the U.S. grid in the first quarter of 2019. Utility-scale solar and energy storage also had strong first quarters, keeping pace with or exceeding historic levels.

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