The runaway train that is tax reform is hurtling through the U.S. Congress towards the president’s desk, and the latest turn is not good news for wind and solar. When the Conference Committee holds its first meeting on Wednesday to compare the Senate and House versions, the the most strategic Congressman to protect wind and solar will not be present.
Senators Sanders (I-VT) and Cantwell (D-WA) are both on the committee and are both strong proponents of renewable energy. However, Cantwell is a Democrat and Sanders caucuses with the Democrats. And if there is anything that has been clear in the process of creating the tax reform bill, it is that Republicans, who hold majorities in both Houses, are not even remotely interested in the perspective of their colleagues across the aisle.
There is one man who could play a big role in protecting wind and solar finance from a number of damaging features of the Senate bill. However Senator Chuck Grassley (R-IA), despite his presence on the Senate Finance Committee, was not named to the Conference Committee and thus will not be present when the details are hashed out.
Grassley has emerged as a champion of the wind industry, which has become a major force in his state of Iowa. He blasted Republican Presidential Candidate Mitt Romney in 2012 when Romney threatened to ax the Production Tax Credit (PTC), and had sharp words with U.S. Energy Secretary Rick Perry over his controversial grid study.
And yet while Grassley had been warned about the threat to wind and solar finance posed by the Base Erosion Anti-Abuse Tax (BEAT) provision in the Senate version of the tax bill, the Solar Energy Industries Association (SEIA) told pv magazine that he still participated in party-line votes against Democratic amendments that would have exempted the PTC and the Investment Tax Credit (ITC) when the bill was in committee.
Grassley was also among 50 out of 51 other Republican Senators who voted for the full bill, including the BEAT provision and a return of an Alternative Minimum Tax (AMT) level similar to the corporate tax rate. Renewable energy finance lawyers have warned pv magazine about the damage both could do to the ability to monetize the ITC and the PTC, which suggests that Grassley had other priorities that trumped protecting finance for the wind industry.
Either way, his chance to be a formal participant in the crafting of the details is over.
The clock is now ticking. President Trump and Congressional Republicans appear to want to conclude this process by Christmas, which means two weeks for a final bill to be crafted and voted on.
It is still not certain that the final bill will pass. Senator Bob Corker (R-TN) stood against the rest of his party to oppose the bill, which will add an estimated $1 trillion to the federal deficit. Additionally, news reports are circulating that Senator Susan Collins (R-Maine), who was able to win concessions in exchange for her vote, may also defect.
Democrats are united against the tax reform bill, but to overcome the ability of Vice-President Mike Pence (R) to break a tie and to defeat the bill, three of the Senate’s 52 Republican members would have to join them in opposition.