[Congressional Record Volume 151, Number 72 (Thursday, May 26, 2005)]
[Senate]
[Pages S6053-S6054]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH:
  S. 1156. A bill to amend the Internal Revenue Code of 1986 to extend 
the credit period for electricity produced from renewable resources at 
certain facilities, to extend the credit for electricity produced from 
certain renewable resources, and for other purposes; to the Committee 
on Finance.
  Mr. HATCH. Mr. President, I rise today to introduce a bill, S. 1156, 
to extend and enhance a provision in the Internal Revenue Code that 
gives tax incentives for the production of electricity from renewable 
resources.

[[Page S6054]]

  The legislation I am introducing today is central to our Nation's 
goal of achieving energy independence, which is at the heart of the 
energy bill that will soon be considered by the Senate. The Committee 
on Energy and Natural Resources has included in its energy bill a 
renewable energy title that directs the Federal Government ``to the 
extent economically feasible and technically practicable'' to implement 
programs that will produce at least 7.5 percent of the electricity from 
renewable sources by 2013.
  The Senate Committee on Finance, on which I serve, will soon consider 
an energy tax bill to complement the bill from the Energy and Natural 
Resources Committee. The legislation I am introducing today is designed 
to provide incentives to help us reach this level of renewable energy 
production.
  Specifically, my bill would amend the Internal Revenue Code to extend 
the Section 45 production tax credit for electricity produced from 
renewable resources for facilities placed in service before January 1, 
2011, pursuant to a written binding contract in effect on December 31, 
2007. This extension is designed to take into account the extended 
length of time it takes for many renewable energy facilities, 
particularly geothermal facilities, to be built.
  In addition, my bill would provide for a 10-year credit period for 
all renewable energy sources covered by this tax credit. Current law 
allows a 10-year credit period for certain renewable sources, such as 
wind, but only a 5-year credit period for other renewable sources, such 
as geothermal. This results in an uneven playing field under current 
law that tilts investors toward certain renewable energy resources over 
others. This represents poor energy policy and it represents poor tax 
policy.
  I believe this disparity in credit periods undermines the development 
of all of our renewable energy resources and thereby inhibits our goal 
of energy independence. This legislation would equalize the tax credit 
period for all renewable resources and even up the playing field.
  I would like my colleagues to know more about the importance of our 
Nation's vast supply of geothermal energy resources. Geothermal is a 
clean, renewable energy resource that presently contributes over 2,718 
megawatts to the U.S. energy supply. Renewable energy, excluding 
hydroelectric, makes up 2 percent of U.S. energy consumption; of that 2 
percent, geothermal energy accounts for .44 percent, solar .06 percent 
and wind 1 percent. Geothermal technology is used in commercial, 
industrial and residential application in 26 States.
  However, geothermal energy generation has not been fully exploited. 
According to the U.S. Department of Energy, there is almost 25,000 
megawatts of undeveloped geothermal energy production potential in the 
United States. This is enough power to serve more than 22 million 
homes. Furthermore, this is an energy source that is not subject to the 
price and supply volatility of fossil fuels. Our energy policy should 
not overlook this potential or sell short its potential.
  My home State of Utah has an abundance of high and low temperature 
geothermal resources that this bill would allow to be economically 
developed. For example, a new 36 megawatt geothermal plant near Cove 
Fort, UT, is scheduled to be under construction by the spring of 2006 
with completion expected by the end of 2007. Without this legislation, 
it is unlikely that this plant, as well as others around the Nation, 
would be able to be built. That would be very unfortunate.
  The area around Cove Fort has one of the largest, proven geothermal 
resources in the Nation. There are 3,000 contiguous acres of leased 
land associated with the project now on the drawing boards. At 2,000 
feet underground, the geothermal resource there is relatively shallow 
and is considered by most geologic experts to be one of the largest 
underground hot water reservoirs in North America. A leading geothermal 
engineering company recently issued a report indicating that the Cove 
Fort hot water resource can support and sustain power production in 
excess of 100 megawatts.
  Utah is but one State with geothermal resources that can help lead 
our Nation toward energy independence. Other States with considerable 
geothermal resources include Nevada, California, Montana, Washington, 
Oregon, Idaho, Wyoming, Colorado, North Dakota, South Dakota, Nebraska, 
Arizona, New Mexico, Texas, Pennsylvania, West Virginia, Louisiana, 
Hawaii, and Kansas. We need to get the process of developing these 
resources started, and the bill I am introducing today would make sure 
that happens.
  This legislation would provide the necessary boost to the development 
of our geothermal energy resources as well as all other renewable 
energy resources available to our Nation. I urge my colleagues to join 
me by cosponsoring this bill.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1156

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. EXTENSION AND MODIFICATION OF CREDIT FOR PRODUCING 
                   ELECTRICITY FROM RENEWABLE RESOURCES.

       (a) Extension of Credit Period for Electricity Produced at 
     Certain Facilities.--Subparagraph (B) of section 45(b)(4) of 
     the Internal Revenue Code of 1986 is amended to read as 
     follows:
       ``(B) Credit period.--In the case of any facility described 
     in subsection (d)(3)(A)(ii) placed in service before October 
     22, 2004, the 5-year period beginning on October 22, 2004, 
     shall be substituted for the 10-year period in subsection 
     (a)(2)(A)(ii).''.
       (b) Extension of Credit.--Subsection (d) of section 45 of 
     the Internal Revenue Code of 1986 (relating to qualified 
     facilities) is amended by striking ``January 1, 2006'' each 
     place it appears and inserting ``January 1, 2008''.
       (c) Binding Contracts for Facilities.--Subsection (d) of 
     section 45 of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following:
     ``For purposes of this subsection, a facility shall be 
     treated as placed in service before January 1, 2008, if such 
     facility is placed in service before January 1, 2011, 
     pursuant to a written binding contract in effect on December 
     31, 2007, and at all times thereafter before such facility is 
     placed in service.''.
       (d) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to electricity 
     produced and sold after the date of the enactment of this 
     Act, in taxable years ending after such date.
       (2) Subsection (a).--The amendment made by subsection (a) 
     shall apply to electricity produced and sold after December 
     31, 2004, in taxable years ending after such date.
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