Sheet metal & Air Conditioning Contractors’ National Association

Letters & Testimonies

SMACNA Supports the Master Limited Partnership Parity Act

Mar 16, 2017

SMACNA recently encouraged both the Senate and House to support The Master Limited Partnership Parity Act (S. 1656/H.R. 2883), bipartisan legislation introduced by Senators Coons (D-DE) and Moran (R-KS) with eight Senate cosponsors and by Representatives Poe (R-TX) and Thompson (D-CA) with seven House cosponsors.  This important bill would greatly expand financing options for energy saving performance contracting (ESPC), building retrofits, industrial market efficiency projects and combined heat and power/ waste heat to power (CHP/WHP) systems on a large scale. S. 1656/H.R. 2883 simply expands the definition of “qualified” sources for MLP investments to include ESPCs, clean energy resources and a variety of infrastructure projects. Specifically included are those energy technologies that qualify under Sections 45 and 48 of the tax code, including wind, closed and open loop biomass, geothermal, solar, municipal solid waste, hydropower, fuel cells, and CHP/WHP, to name a few. The legislation also allows for a range of substantial building efficiency investments to qualify, including energy-efficient upgrades for buildings, electricity storage, carbon capture and storage, renewable chemicals, industrial retrofits and ESPCs.

For the past century, conventional fuels have been able to access low-cost MLP financing to support infrastructure development. This balanced legislation would level the playing field for energy efficient facility rehabilitation; renewable and clean-energy technology as well as encouraging investment into ESPCs and other needed energy infrastructure projects. It is estimated that there are around 140 MLPs currently being traded on major exchanges, primarily focused on energy-related industries and natural resources. Of the estimated $565 billion in MLP capital currently in the market, approximately $467 billion (over 80 percent) has gone into qualifying energy and natural resources. Of that, 85 percent has been restricted to midstream oil and gas pipeline projects. If enacted, The MLP Parity Act will balance the federal tax code to specifically allow MLP qualifying energy sources to include a long list of renewable energy sources as well as currently allowed investments. S. 1656 is expected to generate billions in additional investment in efficient commercial, industrial and related industries quickly upon enactment.