Last year, a dispute between the House and Senate resulted in dropping critical tax provisions intended to encourage renewable energy development from the final version of the “Energy Independence and Security Act of 2007.”

The dropped provisions include both an extension of the Production Tax Credit (PTC) for renewable energy, and funding allocations for the Clean Renewable Energy Bond (CREB) program.  Established in 2005, the CREB program allows cooperatives and other non-profit utilities, who cannot take advantage of tax credits, to finance renewable energy projects with bonds.

Failure to pass these financial incentives for renewable energy development will create obstacles for cooperatives facing new state laws that require utilities to use more renewable energy.  The House-passed measure included $2 billion for the CREB program, a third of which would have been available to cooperatives.

Glenn English, CEO of NRECA is optimistic that Congress will extend the program.  “I don’t think this is a dead issue by any measure,” English said, “It’s more a question of finding the revenue to offset these costs.” 

Co-ops across the country are already using CREBs to fund a wide array of renewable energy projects from low-impact “run of the river” hydro generation to solar panels at school facilities to landfill gas facilities. 

According to Susan Pettit, an NRECA lobbyist who monitors the CREB program, “the year’s lapse will create a bottleneck of projects that are waiting for appropriate funding, so there will be a backlog of projects that can’t move forward.

For two cooperatives in Minnesota, securing CREB allocation allowed the co-ops to move forward with two 2.1 MW wind turbines.  “These wind projects have been in the works as a part of our commitment to renewable energy since 2003.  But we couldn’t make them work financially,” said Richard Burud, general manager of both Federated Rural Electric Cooperative and Nobles Electric Cooperative.  “Securing CREBs financing made the difference.”