Author Archives Laura Arnold

Indiana US Senators Lugar and Coats Vote Against Amendment to Extend Renewable Tax Credits; Fails on tie vote of 49-49

Posted by Laura Arnold / March 17, 2012 / Posted in Federal energy legislation, Uncategorized / 1 Comments

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Amendment to Extend Renewable Tax Credits Falls Short; New Proposal Surfaces

Legislation extending and renewing a variety of renewable energy tax benefits failed to pass the Senate this week, falling on a tie vote Tuesday, 49-49. Sen. Debbie Stabenow (D-MI) introduced the package of nearly 20 credits and programs as an amendment to the Surface Transportation Authorization bill passed by the Senate Wednesday.

However, late Thursday, a bipartisan group of lawmakers, headed by Sen. Chuck Grassley (R-IA) proposed a narrower package of tax credit extensions for renewable technologies.

The legislation would extend through the end of 2014 the wind-energy production tax credit (PTC) set to expire Dec. 31, as well as a PTC for several other technologies set to expire at the end of 2013. The measure, which may be attached to a jobs bill that passed out of the House by a wide margin and is pending on the Senate floor, would extend a tax deduction of 2.2 cents per kilowatt-hour to developers of wind and closed-loop biomass systems. A 1.1-cent/kWh tax credit would be extended to those developing open-loop biomass, geothermal, landfill gas, municipal solid waste, hydropower and marine and hydrokinetic facilities. The credits apply to projects that come into service before Jan. 1, 2015.

Elements in the Stabenow amendment not included in the measure from Grassley and other senators is an extension of the "Section 1603" Treasury Department Program offering grants in lieu of tax credits to provide developers more liquidity in a tight credit market, while stabilizing investment.

Also rejected earlier this week, 21-76, was another amendment, this one from Sen. Jim Demint, R-S.C., which he said would end all energy-related tax credits and use the savings to establish a lower, flat-rate corporate tax.

Stabenow had argued that allowing the credits and programs to expire, or remain expired, would be tantamount to a tax increase on "businesses that are creating clean energy jobs in America." The amendment even had the support of the U.S. Chamber of Commerce.

But the measure fell far short of the 60 votes required for passage under Senate rules, with a number of negative votes stemming from lawmakers' refusal to extend programs originally funded under the American Restoration and Recovery Act, President Obama's 2009 stimulus bill.

The Grassley bill is expected to draw the support of members who rejected the Stabenow measure because it revived elements of the American Recovery and Restoration Act, legislation pushed by President Obama as a one-time stimulus package aimed at helping revive the nation's stagnating economy.

Industry leaders are continually exploring other vehicles by which the credits and programs can be revived and extended, though many had seen the bipartisan-supported surface transportation as the only viable possibility of passage in a highly contentious Congress during a presidential election year. Some have suggested a lame-duck session after the November elections may be an opportunity.

However, reports indicate Grassley may attach his coalition's proposal to a jobs bill that widely passed the House and is now pending on the Senate floor. Action may come as soon as next week.

Indiana U.S. Senators Daniel Coats and Richard Lugar both voted NO.

Coats, Daniel - (R - IN)	Class III
493 RUSSELL SENATE OFFICE BUILDING WASHINGTON DC 20510
(202) 224-5623
Web Form: www.coats.senate.gov/contact/

Lugar, Richard G. - (R - IN)	Class I
306 HART SENATE OFFICE BUILDING WASHINGTON DC 20510
(202) 224-4814
Web Form: www.lugar.senate.gov/contact/

Approval of Indiana Solar PV Property Tax Exemption in Final Stretch; HB 1072 Goes to Governor Daniels for Final Step

Posted by Laura Arnold / March 14, 2012 / Posted in Uncategorized / No Comments

Many of you already know that the 2012 session of the Indiana General Assembly adjourned during the wee hours of Saturday, March 10^th.

Indianapolis Star State House reporters Mary Beth Schneider and Chris Sikich described the end of the session as follows:

"It was nearly 2 a.m. Saturday when Indiana's lawmakers concluded the 2012 legislative session, with the final votes passing a bill that addressed everything from the victims of last year's State Fair disaster to taxpayers to schools.

While lawmakers could have stretched this session out until Wednesday -- the statutory deadline for them to finish their work -- legislative leaders decided to cut the session short instead. After a bitter fight in January over the so-called "right to work" legislation, which brought thousands of protesters to the Statehouse and sparked days of boycotts by House Democrats, all were ready to wrap this session up.

Not, however, before voting on a flurry of bills through the night Friday into this [Saturday] morning."

It was a grueling evening at the State House. So what do I mean by grueling? The last day of the session is typically physically but perhaps more importantly mentally demanding to the point of exhaustion. During one of the many recesses on the final day I saw Conference Committee Chairman Rep. Jeff Espich in the back of the House Chamber engaged in conversation along with Senate Democratic conferee John Broden. At one point, Espich put a stack of papers on the ledge by the large windows at the rear of the Chamber. I could read upside down that this was a Conference Committee Report (CCR) for HB 1072 because that appears in larger type and bold faced at the top of the page. I desperately tried to nonchalantly read the Synopsis upside down through the window without Espich noticing what I was trying to do. A few minutes later when Sen. Broden left the House Chamber to return to the Senate floor, I was able to confirm with Broden that the solar PV language was in the CCR circulating for signatures. Whew! What a relief.

Even though you think you know what is going to happen, the final day of the session when law makers are dealing with Conference Committees it feels like you are in the Twilight Zone. Anything can and frequently does happen. The 800 pound gorilla was the lingering prospect of re-emergence of the tax credit language for the beleaguered Indiana Gasification, LLC, and SNG plant proposed for Rockport, Indiana.

Although most Conference Committees start out with one House Republican, one House Democrat, one Senate Republican and one Senate Democrat, if one of the minority conferees, i.e. Democratic members does not sign the CCR they are summarily removed and replaced by someone, i.e. a Republican who can and will sign the CCR. Yup. That's the way it works. After the four conferees sign the CCR, there is not an opportunity to amend the CCR. It is either voted "up" or "down" on the floor of the House and the Senate. If the CCR report is defeated, it goes back to the conferees for another try.

After a Conference Committee Report (CCR) for HB 1072 was finally signed, state legislators suspend the rules and look over the CCR in the House and Senate Rules Committees. Following presentation to the respective Rules Committee members the CCR then goes back to both the House and the Senate for final roll call votes. For example, suspension of the House Rules then allowed a CCR to be considered on the House floor after merely 30 minutes.

The House called down the CCR a little before 11:00 pm but was withdrawn a few minutes later because hard copies had not been distributed to House members. Later it was called down again around 11:49 pm and the roll call in the House approved HB 1072 about 11:53 pm by a vote of 87-8.

The Senate did not vote on the CCR for HB 1072 until 12:28 am Saturday morning by a vote of 50-0.

After the House and the Senate vote on the CCR then the Senate Pro Tem and the Speaker of the House sign the bill. This took place on 3/13/2012. The last and final step is approval by Governor Mitch Daniels. Once HEA 1072 reaches the Governor he has one week to 1) sign the bill, 2) allow the bill to become law without his signature or 3) veto the bill. The Governor has one week to act once it reaches his desk. You can track action by the Governor by visiting: http://www.in.gov/gov/billwatch.htm.

So continue to keep your fingers crossed and/or "knock on wood."

The legislation is now referred to as House Enrolled Act (HEA) 1072. The final reversion can be found at: http://www.in.gov/legislative/bills/2012/PDF/HE/HE1072.1.pdf

The solar photovoltaic (PV) property tax exemption can be found in Sections 15 &16 on pages 10 & 11 of 191 pages.

For more information, please see http://www.in.gov/apps/lsa/session/billwatch/billinfo?year=2012&session=1&request=getBill&docno=1072

Resolution of Rockport issue should allow HB 1072 Conference Committee with solar pv property tax exemption to move forward; “Knock on wood”

Posted by Laura Arnold / March 09, 2012 / Posted in Uncategorized / 1 Comments

Dear Blog Readers:

There has been no action on the HB 1072 Conference Committee since its initial meeting on 3/6/2012 while state legislators and the Daniels Administration discussed the tax credit for the Indiana Gasification, LLC SNG plant at Rockport, Indiana. Now with the alternative course of action outlined in the newspaper article below, state lawmakers are expected to take action on a Conference Committee Report for HB 1072.

HB 1072 as it passed the Senate contained the extention of the property tax exemption for solar pv. I am hopeful that this language will remain in the Conference Committee Report (CCR) which needs to be signed today. After the four conferees sign the CCR then it returns to both the House and the Senate for final roll call votes. Please note that another Conference Committee meeting is not required for the conferees to merely sign the CCR. Before the CCR on HB 1072 can be voted on the floor though it must go both to the House Rules Committee and the Senate Rules Committee. Hopefully, the time clock will not run out but this issue may not be resolved until the final hours or hour of the 2012 session. "Knock on wood."

Laura Ann Arnold

Lawmakers dropping Rockport issue as session nears its end

By Eric Bradner
Evansville Courier & Press
Posted March 8, 2012 at 2:23 p.m., updated March 8, 2012 at 3:45 p.m.

INDIANAPOLIS —Developers of the Rockport, Ind. coal-to-gas plant do not need state lawmakers’ help to get a 20-year, $120 million tax credit, after all.

Instead, the Indiana Department of Revenue – an agency under the watch of Gov. Mitch Daniels, a champion of the $2.6 billion plant – will rule on whether the tax credit applies. The agency’s likely answer: Yes.

It’s a work-around to avoid asking reticent legislators to once again change the law to help push forward a plant that Daniels calls a great deal, but Vectren Corp. and other Indiana utilities say will drive ratepayers’ bills upward.

Key Republican fiscal leaders said the Daniels administration had opted to try for that “administrative fix” to forestall potential lawsuits over the tax credit, instead of pressing lawmakers on the issue as the 2012 legislative session reaches its end.

Senate Appropriations Committee Chairman Luke Kenley, R-Noblesville, said legislation related to the tax credit won’t make its way into a bill.

“Everybody likes to let the legislature solve all their problems for them rather than figure out if they’ve got another way to do it sometimes, and I think maybe that’s what happened in this case,” Kenley said.

The Rockport plant’s proponents said working through the Indiana Department of Revenue is fine with them.

“There was never any doubt in our minds that we qualified under the existing law,” said Mark Lubbers, an Indiana consultant for Leucadia National Corp., the Rockport plant’s developer, and a former top Daniels aide.

“Given the fact that Vectren is spending every dime of ratepayer money they can to slow us down, we wanted to clarify the language in a way to mitigate their next nuisance lawsuit.”

Opponents took another view.

“I thought we overthrew the monarchy back in 1776,” said Kerwin Olson, the head of the Citizens Action Coalition, an environmental advocacy group that has opposed the Rockport project.

After negotiations with utilities such as Vectren broke down, Daniels had the Indiana Finance Authority negotiate a 30-year contract to purchase 38 million dekatherms of synthetic natural gas annually from the Rockport plant, and then resell that to Hoosier ratepayers.

The contract, approved by the Indiana Utility Regulatory Commission in November, was a huge boost for Rockport’s developers because it guaranteed their product would have a buyer.

However, during this year’s session, Vectren has used the question of whether the tax credit, which would give the Rockport plant an approximately $6 million per year incentive to purchase Indiana coal, is applicable as a chance to lobby lawmakers to reconsider the whole project.

Their argument: A recent shale-gas boom has driven natural gas prices on the open market down to $2.50 per dekatherm – much lower than the $6.64 per dekatherm average rate over the life of the contract that the Indiana Finance Authority expects to pay the Rockport plant.

Indiana utilities wouldn’t have a financial stake, but 17 percent of all Hoosier ratepayers’ bills would be tied to the Rockport plant’s prices, and utilities would be required to act as an intermediary and bill for that 17 percent.

Thus, Vectren officials have complained, they expect to be blamed by ratepayers if the cost of Rockport’s synthetic natural gas proves higher than the other natural gas the utility is delivering.

Still, Daniels said he expects natural gas prices to fluctuate over time, as they have in recent years. He said Hoosiers are guaranteed savings over the life of the contract, and that it would also help create jobs in Southwestern Indiana.

By dodging the step of having the Indiana General Assembly approve language related to the tax credit before Friday’s adjournment, the Daniels administration keeps lawmakers from stepping into a court battle, as Vectren and others are challenging the IURC’s approval of the Rockport plant.

“I’m pleased that there seems to be a recognition among many legislators that there are questions about this project,” said Mike Roeder, Vectren’s vice president of government affairs and corporate communications.

He said the utility will have to regroup before determining how next to try to prevent the Rockport plant’s construction.

“We’ve been laser-focused on this legislative language because frankly, that’s what the other side believed they needed. They’ve changed strategy, and so we’ll have to evaluate that,” Roeder said.

“This has been as much about the project as it is about the credit. It’s just caused us to say to legislators for several weeks, ‘We don’t think you should give them the tax credit, and by the way, you might just want to take a whole new look at the project.’”

Lubbers said the tax credit is important to another step toward the project’s completion: Securing a federal loan guarantee from the U.S. Department of Energy.

“We have to go through the process, but our case is extremely strong and we feel very comfortable. This kind of ruling has the force of law and will keep the next nuisance lawsuit from Vectren from slowing us down,” Lubbers said in an email.

“Additionally, our financing team feels that this ruling will provide all the assurance we need for the Department of Energy loan guarantee commitment. So, all good.”

Public Field Hearings Announced for Indiana Michigan Power Rate Increase (Cause No. 44075)

Posted by Laura Arnold / March 07, 2012 / Posted in Indiana Michigan Power Company (I&M), Uncategorized / No Comments

The Indiana Utility Regulatory Commission (IURC) filed Docket Entries yesterday (3/6/2012) setting the three public field hearings in the Indiana Michigan Power (an operating subsidiary of American Electric Power or AEP) rate case in Cause No. 44075 as follows:

Monday, April 23, 2012 starting at 6:00 pm in the Grand Wayne Center, 120 S. Jefferson Blvd., Ft. Wayne, IN 46802
Tuesday, April 24, 2012 starting at 6:00 pm in the South Bend Century Center, 120 S. St. Joseph Street, South Bend, IN 46601
Wednesday, April 25, 2012 starting at 6:00 pm in the Muncie City Hall Auditorium, 300 N. High Street, Muncie, IN 47305

All the public field hearings are open to the public.

If an accomodation is required to allow an individual with a disability to participate, please contact the Office of the Executive Secretary of the IURC at (317) 232-2701 or TDD (317) 232-8556 at least 48 hours in advance.

For more information about this I&M rate case please see http://wp.me/pMRZi-Cq and http://wp.me/PMRZi-yB.

HB 1072 Conferees Appointed; Will Chairman Espich Keep Indiana Solar PV Property Tax Exemption in HB 1072?

Posted by Laura Arnold / March 06, 2012 / Posted in Feed-in Tariffs (FiT), Uncategorized / 1 Comments

UPDATE: The Conference Committee for HB 1072 will be TODAY (3/6/2012) at 4:00 pm in Room 404 of the State House.

To watch on-line, please see http://www.in.gov/legislative/2441.htm

The 2012 session of the Indiana General Assembly is entering its final week where the focus turns to Conference Committees to reconcile differences between the House and Senate versions of bills passed in their respective houses.

After a bill passes Third Reading or final passage in both houses, it returns to the "house of origin" and the original bill author. In the case of HB 1072, it returns to Rep. Jeff Espich (R-Uniondale). Espich then has two choices; 1) concur with the changes made in the second house followed by a roll call vote; or 2) dissent and have a conference committee appointed to reconcile the differences. Espich filed a dissent motion for HB 1072 and the conference committee members or conferees have been appointed as follows:

House Conferees appointed: Espich, Chairman (R-Uniondale) and Welch (D-Bloomington)

House Advisors appointed: Turner (R), Thompson (R), Ellspermann (R), Ubelhor (R), Dembowski (D) and Pryor (D)

Senate Conferees appointed: Hershman (R-Buck Creek) and Broden (D-South Bend)

Senate Advisors appointed: Kenley (R), Mishler (R), Head (R) and Skinner (D)

The conference committee then meets at the will of the Chairman, in this case, Espich. The four conferees meet with their appointed advisors and work on a new version of HB 1072. Subject matter or content that has passed third reading in at least one House is eligible to be inserted into the Conference Committee Report (CCR). For example, it is believed that the tax credit for the controversial Indiana Gasification, LLC plant in Rockport, Indiana, may be inserted into HB 1072. The subject matter concerning Indiana Gasification, LLC was a part of SB 344 when it passed third reading in the Senate but it was removed by an amendment in the House Ways and Means Committee. (See http://wp.me/pMRZi-CI) Later SB 344 was not called down for second reading in the House (31 amendments had been filed). Therefore, SB 344 died. But most of the subject matter had already been inserted into HB 1072 in the Senate Tax and Fiscal Policy Committee by Sen. Hershman. HB 1072 then passed third reading in the Senate.

HB 1072 now contains the property tax exemption for solar photovoltaic (PV) devices, however, with a simple stroke of a pen Rep. Espich can have the language removed from his proposed version of the Conference Committee Report (CCR). Rep. Espich already removed the solar PV property tax exemption once in SB 344 in the House Ways and Means Committee. The $64,000 question is will Espich remove the solar PV property tax exemption again from the CCR for HB 1072 or will he permit it to stay?

As the conferees on HB 1072 meet, all four conferees must agree to a particular version of the revised bill known as a Conference Committee Report (CCR). After all four signatures are obtained, the CCR returns to both the House and the Senate for another roll call vote. There is no opportunity to amend a CR when it goes back to the House and the Senate. It is an up or down roll call vote. This is where the legislative process becomes like a tarantella becoming faster and faster until the end.

There is a strong rationale for extending the property tax exemption to solar PV since it is already in effect for solar thermal, wind power devices and geothermal. Last session, however, Sen. Hershman amended the property tax exemption for wind systems so that the property tax exemption cannot be used if the owner is participating in a feed-in tariff program. Attempts were made to amend this language in the House Ways and Means Committee on SB 344 but these efforts proved unsuccessful. Hershman indicated that this issue should be addressed by "introducing a bill next session." And then SB 344 died in the House.

If your state legislator is either a conferee or an advisor, I strongly urge that you contact them immediately and express support for the inclusion of the solar PV property tax exemption in the CCR for HB 1072. Just follow the hyperlink to their official website listed above. You may also want to follow up with a phone call to their Legislative Assistant (L.A.) If you need help finding this information, please contact me via LArnold@indy.rr.com or (317) 635-1701.

To better understand the Indiana General Assembly state legislative processes please see this document prepared by the Indiana Chamber of Commerce. It contains a flow chart which attempts to explain the legislative process in Indiana as well as providing an excellent glossary of terms. How a bill becomes a law

For more information about the Indiana General Assembly, please visit http://www.in.gov/legislative.