Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Exclusive-White House backs plan for renewable energy industry tax partnerships

CommoditiesSep 22, 2021 11:20AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Power-generating Siemens 2.37 megawatt (MW) wind turbines are seen at the Ocotillo Wind Energy Facility California, U.S., May 29, 2020. REUTERS/Bing Guan//File Photo/File Photo 2/2

By Jarrett Renshaw and Laura Sanicola

WASHINGTON (Reuters) -The White House is backing a plan by House of Representatives Democrats to let renewable energy firms form tax-advantaged partnerships that the oil and gas industry has used for decades to build out the U.S. pipeline and storage infrastructure, according to three people familiar with the matter.

The expansion would allow the renewable energy industry - from wind and solar to biofuels like ethanol - to form master limited partnerships, known as MLPs, that combine the funding advantages of corporations with the tax advantages of partnerships.

The expansion is included in Democratic-backed $3.5 trillion spending legislation being considered in the House.

"An expansion could allow retail investors to direct invest in renewable energy projects, rather than only being able to invest in companies that may deal in renewables," said Clark Sackschewsky, tax market leader at BDO USA in Houston.

The sources, speaking on condition of anonymity, confirmed White House support for the plan, which is estimated to cost the U.S. Treasury almost $1 billion in lost tax revenue over a decade.

Some environmentalists had urged the White House to back a competing plan that would eliminate MLPs for the fossil fuel industry, arguing that the structure gives financial incentives to spur growth in oil and gas at a time when President Joe Biden's administration is trying to lower carbon emissions.

The oil and gas industry has financed billions of dollar in pipeline and storage products under MLPs since President Ronald Reagan first signed legislation in 1986 allowing them as a way to spur energy investment.

The Alerian MLP Index, a gauge of energy infrastructure MLPs, is currently valued at nearly $200 billion.

That index includes the largest pipeline transportation and storage companies, including Enterprise Products Partners (NYSE:EPD) and Energy Transfer (NYSE:ET).

The renewable energy industry has long sought access to the corporate structure as a way to even the playing field.

“This is about fairness and equity. This change could really jumpstart plenty of projects and help support lower carbon fuels,” said Geoff Cooper, head of the Renewable Fuels Association.

Several pipeline companies, largely oil and natural gas pipeline firms, have restructured in recent years after the U.S. regulators said they will no longer be allowed to recover an income tax allowance as part of fees they charge to shippers under a “cost of service” rate structure.

"The whole MLP structure is problematic from a governance perspective which has significantly dampened investor interest, said Andrew Logan, senior director of oil and gas at Ceres, adding that this might mute the impact of expanding MLP eligibility.

Exclusive-White House backs plan for renewable energy industry tax partnerships
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email