[Congressional Record (Bound Edition), Volume 149 (2003), Part 4]
[Senate]
[Page 4898]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     THE RENEWABLE FUEL EQUITY ACT

                                 ______
                                 

                           HON. DUNCAN HUNTER

                             of california

                    in the house of representatives

                      Thursday, February 27, 2003

  Mr. HUNTER. Mr. Speaker, today, along with my colleague from 
Colorado, Mark Udall, I am reintroducing the Renewable Fuel Equity Act 
of 2003. The energy crises that struck California in 2001 and resonated 
across the country taught us many lessons--one of which is the need for 
our country to expand and diversify the production of energy from 
renewable resources.
  Solar, wind, hydro power, biomass, and geothermal energy are each 
potentially enormous energy resources and every state has renewable 
resource potential. Unfortunately, existing renewable energy resources 
are not spread uniformly across the country. The current tax law 
creates regional and technological inequities by failing to provide 
uniform benefits for all renewable energy resources. For example, the 
Section 45 production tax credit, enacted in 1992, has spurred 
significant new investment, but it only applies to wind power 
facilities. Since its inception, the production tax credit has added 
thousands of megawatts of wind power to our electricity grid. Imagine 
the impact on our communities if the production tax credit was 
available to all renewable energy technology.
  Clean power production provides greater reliability for our 
electricity system while promoting cleaner air and water. In addition, 
according to the Energy Information Agency, expanding renewable power 
production helps reduce the risk of future price increases for 
electricity.
  Today, renewable power sources provide consumers reliable power that 
is cost-effective over the long run. Unfortunately, their high, initial 
capital costs discourages investment in renewables. Providing tax 
incentives for new renewable power production can make the difference.
  The federal production tax credit has demonstrated its effectiveness 
in spurring investment in new wind power generation. The Renewable Fuel 
Equity Act would expand this proven incentive to all of the renewable 
energy resources--wind, biomass, incremental hydro power, solar and 
geothermal.
  For smaller power systems, particularly those not connected to the 
grid, the production tax credit is not an effective stimulus. Under 
current law, it does not apply to off-grid systems, and it is too 
complex for small businesses to use. To address this situation, our 
bill would make a 20 percent investment tax credit available to all 
small renewable technologies as an alternative.
  Investment in new renewable power is good for the economy and the 
environment, and providing these tax incentives will spur new 
investment without cutting Treasury revenues. Studies by the National 
Renewable Energy Laboratory and others indicate that expanding tax 
incentives for new renewable power systems are likely to have 
negligible net costs for the Treasury. This is because renewable power 
plants are so capital intensive they already pay significantly higher 
federal income taxes on the power produced.
  As the 108th Congress begins the debate over a national energy 
policy, I believe production and investment tax credits for renewable 
fuel sources are an important component of any comprehensive policy. 
Exploiting our renewable fuels is one of our safest, cleanest and most 
effective ways of ensuring our nations energy independence. I hope that 
my colleagues will join me in supporting renewable fuel development by 
cosponsoring this important bill.

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