Bipartisan Group of Senators Urge IRS to Quickly Clarify Rules for Wind PTC

Rules Needed to Provide Certainty to Potential Investors

March 5, 2013

U.S. Senators Michael Bennet (D-CO) and Jerry Moran (R-KS) led a bipartisan group of senators today to urge the Internal Revenue Service (IRS) to quickly clarify rules relating to the renewable energy production tax credit that was extended in the American Taxpayer Relief Act last year.

Bennet and Moran were joined by Senators Mark Udall (D-CO), Christopher Coons (D-DE), Jeff Merkley (D-OR), Ron Wyden (D-OR), Heidi Heitkamp (D-ND), Sherrod Brown (D-OH), Maria Cantwell (D-WA), Tim Johnson (D-SD), Jeanne Shaheen (D-NH), Angus King (I-ME), Amy Klobuchar (D-MN), Sheldon Whitehouse (D-RI), Al Franken (D-MN), Jack Reed (D-RI), and Barbara Boxer (D-CA).

In a letter to Neal S. Wolin, acting secretary of the Department of the Treasury, and Steven T. Miller, acting commissioner of the IRS, the senators wrote, “The new iteration of the PTC and ITC will allow the United States to continue to diversify its energy portfolio through new generation from clean energy sources. However, a lack of clear IRS guidance regarding the construction threshold and criteria necessary to claim the incentives may soon result in uncertainty among potential investors.”

“AWEA and our member companies appreciate the leadership taken by Senators Bennet and Moran and the support from other Senators to urge the IRS to issue guidance regarding the new eligibility requirement for the PTC and ITC as soon as possible,” Rob Gramlich, interim CEO of AWEA, said. “We hope the Treasury and IRS will quickly provide guidance that generally adheres to prior guidance on the definition of construction commencement.”

Congress extended the tax credit for one year in a bill to avert the Fiscal Cliff and permanently extend the tax cuts for middle class Americans. The credit is a 2.2 cents per kilowatt hour tax credit for energy produced by wind turbines and was designed to apply to any new wind power project that begins construction before the end of 2013.

Bennet is a member of the Senate Finance Committee, which has jurisdiction over the wind PTC.

Full Text of the Letter:

March 5, 2013

Dear Acting Secretary Wolin and Acting Commissioner Miller,

We write to support the Internal Revenue Service (IRS) as the agency crafts guidance to clarify the eligibility qualifications for the renewable energy tax credits that were extended in the American Taxpayer Relief Act (P.L. 112-240) at the end of the 112th Congress.

The legislation modified the renewable energy production tax credit (PTC), Section 45, and investment tax credit (ITC), Section 48, to apply to projects that have “commenced construction” instead of projects that have been “placed-in-service.” We are supportive of this modification and encourage the IRS to promptly issue guidance to allow all projects begun before 2014 to take advantage of the provision.  The new iteration of the PTC and ITC will allow the United States to continue to diversify its energy portfolio through new generation from clean energy sources.  However, a lack of clear IRS guidance regarding the construction threshold and criteria necessary to claim the incentives may soon result in uncertainty among potential investors.  Including key features from prior guidance on the commence construction criteria may help expedite the process and avoid any prolonged delays in investment that might result from significantly revised rules.

We hope the IRS will continue its diligent work to issue this eligibility guidance as soon as possible and subsequently unleash the economic development and clean energy deployment the credits were designed to spur.

Thank you for your consideration.

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