Senators Wyden and Merkley, The BTU Act is good for Oregon

Posted by Dylan Kruse on July 22, 2013

This critical legislation would provide parity in the tax code that Oregon biomass systems desperately need to compete.


Originally published in Sustainable Business Oregon

By Bruce Daucsavage and Dylan Kruse

The Senate Finance Committee - which is taking the lead on crafting a comprehensive tax reform package - has announced a July 26 deadline for Senators to make requests of the committee for preferred items to be included in the package.

Leadership has indicated that special attention will be paid to requests that enjoy bipartisan support. Take the Biomass Thermal Utilization Act of 2013 (BTU Act). This bill is sponsored by an Independent (Sen. Angus King (I-ME), a Democrat (Sen. Jeanne Shaheen (D-NH) and a Republican (Senator Susan Collins (R-ME). Other senators have expressed support for the legislation but have not yet agreed to cosponsor.

Getting the provisions of S. 1007 into the tax reform bill will allow biomass thermal energy systems to compete on a level playing field with other renewable energy technologies. Right now, geothermal, wind, solar and other renewables enjoy federal residential and commercial investment tax credits. Biomass thermal systems do not. This critical legislation would provide parity in the tax code that Oregon biomass systems desperately need to compete.

Senate Finance Committee Leadership have indicated that they are pursuing a 'blank slate' approach to tax reform - in other words operating from an assumption that all special tax provisions are out unless there is clear evidence that they: (1) help grow the economy, (2) make the tax code fairer, or (3) effectively promote other important policy objectives. We believe S. 1007 meets all three of these criteria.

That's why we've written Oregon Sens. Ron Wyden and Jeff Merkley to let them know that the BTU Act is good for Oregon.

Sen. King introduced the legislation that would make efficient wood heating systems in residential and commercial buildings eligible for renewable energy tax credits. The BTU Act is designed to reduce energy bills and replace fossil fuels with domestically produced, renewable biomass resources across the country.

The bill emphasizes the importance of thermal (heat) energy, which accounts for one-third of our nation's energy demand, but goes largely unrecognized in meeting state and national renewable energy goals. Currently, other renewable energy sources like solar, geothermal, and wind are eligible to receive tax credits when used for heating purposes, but woody biomass (which we have a lot of in Oregon) is left out of the picture.

The BTU Act of 2013 fixes this. It proposes changes to the Federal tax code to make sure that clean burning, renewable biomass resources and systems are eligible for the same credits that other renewables receive. In this case that means heating systems in residential and commercial facilities that use woody biomass like pellets and chips for energy. Not only is parity extended to biomass systems, but the legislation also creates a tiered efficiency structure, so the more efficient your system is, the higher of a credit it will be eligible for. This ensures that the most appropriate renewable is used in the right place, and that we get the highest and most responsible use out of the resource.

Not only is this a common sense approach to meeting our nation's energy needs, but using biomass provides many other important environmental benefits for Oregon, because it helps address our state's forest health problems. The wood pellets and chips that many Oregon companies manufacture are often the byproducts of restoration work to thin unhealthy and crowded forests. Markets for biomass help offset the cost of forest restoration to provide clean water and air, reduce wildfire risk, improve wildlife habitat, and provide world-class recreational opportunities for the citizens of Oregon.

This legislation will help Oregon communities reduce energy costs, and support the regional forest economy by maintaining and creating jobs across the state. A number of mills are already adapting their facilities to tap into new markets for biomass products and this bill makes sure those investments pay off. It is currently under consideration in the Senate Finance Committee, where it has bipartisan support, but needs more backing to make sure it passes.

Given the importance of this bill to the citizens, economy, and natural resources of Oregon, we've urged senators Wyden and Merkley to take two important steps:

1) Communicate their support for the BTU Act to Senate Finance Committee leadership and urge them to include its provisions in comprehensive tax reform conversations currently being held.

2) Show their strong support for the BTU Act by agreeing to become co-sponsors of the legislation.

If you are a supporter of thermal biomass energy to help our state, environment, and economy, we encourage you to contact the Senators and ask them to do the same.