Defying conventional wisdom in the era of Solyndra, conservatives in Washington are coming out to back renewable energy.
Specifically, some conservative groups, including Americans for Prosperity, as well as conservative Republicans such as Rep. Mike Pompeo of Kansas support the idea of expanding a business structure known as a “master-limited partnership,” or MLP, which is currently available only to oil, natural-gas, and coal-mining projects, to also be available to renewable-energy projects.
Sens. Christopher Coons, D-Del., and Lisa Murkowski, R-Alaska, are introducing legislation Wednesday that would do just this. A bipartisan group of House members is expected to follow suit this week with a similar proposal.
In simplified terms, MLPs are businesses set up as partnerships that are taxed only once—via the shareholders—not at both the shareholder and corporate levels, as publicly traded corporations are.
“There should be a level playing field and people should have access to similar tax and business structures,” said James Valvo, director of policy for Americans for Prosperity. “MLPs are the place where renewables really are being disadvantaged.”
Americans for Prosperity was founded by the Koch brothers, owners of energy conglomerate Koch Industries. The group criticizes President Obama on almost all his policies, including its support for Solyndra, the California solar company that went bankrupt after receiving a $535 million federal loan guarantee.
Washington’s high-profile fighting over Solyndra painted the GOP as unsupportive of renewable energy writ large. But this latest bipartisan effort is a reminder that what many conservatives have a problem with is government largesse, not renewable energy itself.
“Some people don’t think renewables are really ready and any support is misguided,” Valvo said. “That’s a decision for individual investors to make. And right now they’re being denied that decision because MLPs are not allowed for renewables.”
Rep. Ted Poe, R-Texas, whose district borders Houston, and Rep. Mike Thompson, D-Calif., are cosponsoring the House bill that would expand MLPs to renewable energy. Pompeo, whose district includes the headquarters of Koch Industries, is also open to the idea.
“I support including all energy sources, including renewables, in the definition of entities eligible for the [MLP] tax treatment,” said Pompeo, who is pushing legislation to eliminate most energy subsidies.
Pompeo, Valvo, and other conservatives who expressed support for the concept of expanding MLPs to renewable energy don’t (yet, anyway) support the Coons-Murkowski bill for a few potentially deal-breaking reasons.
The biggest potential deal-breaker is that both Valvo and Pompeo insist if Congress expands MLPs to include renewable energy, other tax subsidies, including the controversial wind-production tax credit, must be repealed.
That’s a nonstarter for Coons. “Senator Coons views the MLP Parity Act as a complement to those tax credits and certainly not as a replacement,” his spokesman Ian Koski told National Journal Daily.