Energy & Environment
Co-ops Seek CREBs Extension
A popular program that co-ops use to invest in renewable energy projects is facing an uncertain future, and NRECA is asking the Obama administration to get behind it.
The GobNob wind project in Illinois was partially financed with Clean Renewable Energy Bonds. (Photo By: Rural Electric Convenience Co-op)
In a letter with two other trade associations, NRECA has asked Treasury Secretary Timothy Geithner to include an extension of the Clean Renewable Energy Bonds program in the administration’s fiscal 2012 budget, to be released next month.
The five-year-old program provides co-ops and municipal utilities with incentives similar to those used by IOUs for investments in renewable energy.
“As we enter 2011, the CREB program is out of funding. Therefore, we are requesting that the administration’s budget recommend significant funding for the program,” according to the letter, signed by NRECA CEO Glenn English; Mark Crisson, president and CEO of the American Public Power Association; and Linda Church Ciocci, executive director of the National Hydropower Association.
The associations directed the letter to Geithner because the Treasury Department administers the program through the Internal Revenue Service.
Co-ops have frequently relied on it as a way of building renewable projects they otherwise could not have afforded. In 2006, 2007, and 2009, co-ops received $900 million in CREB allocations for 107 hydropower, wind, solar and biomass projects.
The deadline for new CREB applications from co-ops, which receive one-third of the total program allocation, expired in November.
English said the program has enjoyed bipartisan support in Congress and is an important tool for not-for-profit utilities at a time when many for-profit companies enjoy taxpayer subsidies.
The letter to Geithner noted that federal lawmakers created the program in 2005 as a way of expanded renewable generation incentives beyond several tax credits that can be tapped by IOUs.
“Not-for-profit utilities are not eligible for these programs directly, and the lack of a direct federal incentive often precludes these utilities from owning the renewable facility or developing local resources.”
A change made last year by Congress strengthened the program, the letter added, by providing a direct payment option, so that the bond issuer can receive an interest subsidy directly from Treasury.
“With this feature, demand for the CREB program is strong, demonstrated by the fact that the funding provided under the stimulus and other bills has been oversubscribed,” according to the letter.
Tags: Clean Renewable Energy Bonds, Obama Administration, Renewable Energy