Coalition of renewable energy companies to advocate for equal treatment between clean energy and fossil fuels

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Greentech Lead America: A coalition of leading renewable energy companies from across the country has been formed to advocate for equal treatment between clean energy and fossil fuels that would allow average Americans to invest in renewable energy projects in the same way they do oil and gas projects.

The coalition, called Financing America’s Investment in Renewables (FAIR), supports a change in the law that currently allows oil, gas, coal and other “natural resources”-based energy projects, but not renewable energy projects, to use master limited partnerships (MLPs), a business structure that facilitates investment in qualifying projects.

Such a change has been proposed in the bi-partisan Master Limited Partnerships (MLP) Parity Act recently re-introduced in both the US House and Senate.

The MLP Parity Act, which was introduced jointly by Senator Chris Coons (D-DE) and Congressman Ted Poe (R-TX), would give investors in renewable energy projects access the decades-old, tax-advantaged MLP structure that is currently available to investors in fossil fuel-based energy projects.

An MLP is a business structure that is taxed as a partnership, but whose ownership interests are traded on an exchange like corporate stocks. This provides the state and federal tax benefits of a partnership with the liquidity of a publicly traded company.

While MLPs have generated the abundant and affordable capital that has built the nation’s modern oil and gas infrastructure, renewable energy assets are not currently eligible to use the MLP structure.

“The lower the cost of building renewable energy projects, the less consumers will have to pay for clean American energy, so that’s why we are urging Congress to level the playing field to give all sources of domestic energy – renewable and non-renewable alike – access to the use of MLPs,” said Paul Gaynor, the CEO of First Wind and one of the founders of the FAIR Coalition.

The FAIR Coalition is already actively engaged in efforts to support the MLP Parity Act.

The MLP Parity Act would level the playing field between traditional and new energy businesses by allowing renewable energy-generation and transmission companies to form MLPs, providing them the liquidity advantages of public markets with the tax advantages of a partnership.

“The MLP could be an attractive financing vehicle for some of our renewable energy projects,” said Jim Murphy, Chief Operating Officer of Invenergy. “It would give us a viable public market option for a portion of our capital needs, much like oil, gas, and coal have enjoyed for decades.”

The FAIR Coalition believes that the MLP Parity Act is not intended to be a substitute for the Production Tax Credit or the Investment Tax Credit, but could create a complement to those credits as part of a long-term renewable energy tax policy.

editor@greentechlead.com

 

 

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