Update: House Approves Update Of Renewable Energy Tax Breaks

Updated with comments from Governor Kulongoski.

A bill to control the costs of Oregon’s renewable energy tax credits was overwhelmingly approved this morning by the state House. The vote in favor HB 3680 was 59-1. The only “no” vote was cast by Medford Rep. George Gilman.

The Business Energy Tax Credits, better known as BETC, have been given a lot the credit for Oregon’s recent boom in renewable energy projects – especially the large wind farms in Eastern Oregon.

But the costs of the program have grown larger and faster than anyone expected. A recent series of stories in the Oregonian showed how some renewable energy developers were taking advantage of loopholes in BETC to get even bigger tax breaks.

HB 3680 is designed to fix those problems.

Here’s how HB 3680 will bring BETC under control.

• Large scale wind projects are being slowly phased out. This year, projects larger than 10 megawatts are limited to a $3.5 million dollar maximum tax break. The cap is lowered to $2.5 million in 2011 and then to $1.5 million in 2012.
• It limits all BETC credits to $300 million for the 2009-2011 budget cycle.
• It closes loopholes that allowed some renewable energy developers to game the system. In some cases, businesses had figured out they could get bigger tax credits if they submitted several small proposals instead of one large one.

The changes have been widely supported. Governor Kulongoski vetoed changes approved by the legislature last year, but this time he’s onboard. He’s made several comments lately that it’s time to wean large wind projects off of BETC.

This afternoon, the Governor released this short statement.

“The reforms in House Bill 3680 will improve the state’s renewable energy incentive program, an effort that has successfully attracted jobs and investment to Oregon, by ensuring greater accountability for taxpayers and certainty for the green energy industry. This legislation will also allow the program to continue to be a strong economic development tool for communities across Oregon.

Environment Oregon also released a brief statement on its Facebook page praising the vote.

Thanks to Environment Oregon for the tip!