Tracy Warren, NRECA
Phone: (703) 907-5746
Mobile: (703) 517-3411
ARLINGTON, VA; March 17, 2010 — The National Rural Electric Cooperative Association (NRECA) today praised the Senate’s passage of “Hiring Incentives to Restore Employment Act” (H.R. 2847), which includes a provision to boost the effectiveness of the Clean Renewable Energy Bond (CREB) program by making bond issuers eligible for cost reimbursements under the “Build America Bond” program enacted last year.
The CREB program, authorized by the Energy Policy Act of 2005, gives co-ops the ability to issue bonds to finance renewable energy projects. Originally under the CREB program, the bond purchaser received a tax credit for 70 percent of the interest. In the current market, however, lagging demand for such tax credits has reduced the market for CREBs.
With CREB-issuers now considered eligible to participate in the “Build America Bond” program, co-ops can receive payments from the U.S. Treasury for 70 percent of the bond’s interest.
“This change sets an important precedent by giving co-ops an efficient, market-driven tool for financing renewable projects,” said NRECA CEO Glenn English. “Co-ops traditionally have not been eligible to issue tax-favored bonds. This change brings the financing incentives available to co-ops on par with those of the rest of the utility sector.”
Since the inception of CREB, electric cooperatives have submitted 85 applications for a total of $554 million in bond authority; 78 cooperative projects in 22 states received bond allocations. The program, however, remains underfunded.