The advocacy group, Industrial Energy Consumers of America (IECA), sent a letter on March 15 to the chairmen and ranking members of the U.S. Senate Committee on Finance and the U.S. Committee on Ways and Means, urging them to extend the combined heat and power (CHP) business energy investment tax credit (ITC) set to expire at year-end 2016.
Last year, in the omnibus bill, H.R. 2029, the “Consolidated Appropriations Act of 2016,” solar and wind ITCs/production tax credits (PTCs) were renewed for another five years, while CHP was not.
“CHP facilities should have more comparable tax treatment to that which has been extended to wind and solar,” wrote IECA President Paul Cicio to Finance Chairman Orrin G. Hatch (R-UT), Finance Ranking Member Ron Wyden (D-OR) Ways and Means Chairman Kevin Brady (R-08-TX), and Ways and Means Ranking Member Sander Levin (D-o9-MI).Specifically, Cicio said, this comparable treatment should allow the use of the CHP ITCs at the date of “commenced construction,” versus “placed in service.”
In addition, he urged the legislators to remove the megawatt (MW) capacity cap on the CHP ITC – which, he stated, “has greatly limited the value and use of the tax credit” – and to include industrial waste heat to power (WHP) as a “qualified facility” because WHP facilities produce power without any emissions.
It is important to distinguish Congressional tax incentive support for industrial CHP/WHP from incentives for wind and solar facilities, Cicio noted, because CHP has several more benefits – among them:
Despite the advantages of industrial CHP, the IECA president said, relatively few units are being built. However, Cicio proposed, the CHP ITC and improvements to the ITC could help turn this trend around and create needed middle-class manufacturing jobs. Unlike solar and wind, all of the major equipment needed to build CHP units is built within the United States.
“We urge you to extend the CHP ITC and increase its applicability to support manufacturing competitiveness and domestic jobs,” Cicio concluded. “If you have a hearing on this subject, we would be interested in testifying. We look forward to working with you on this important issue.”