SMACNA Urges Senate to Support S. 1841, The Financing Our Energy Future Act
In a recent letter to the Senate, SMACNA endorsed S. 1841, The Financing Our Energy Future Act, bipartisan legislation introduced in the Senate by Senators Chris Coons (D-DE) and Jerry Moran (R-KS) with seventeen cosponsors. The identical House bill, H.R. 3249, sponsored by Representatives Mike Thompson (D-CA) and Ron Estes (R-KS), was added to the House-passed infrastructure bill H.R. 2, The Moving Forward Act. This important legislation would greatly expand financing options for energy saving performance contracting (ESPC), building retrofits, industrial market efficiency projects and combined heat, carbon capture and waste heat to power (CHP/WHP) systems.
S. 1841 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 Internal Revenue Act, such as wind, closed and open loop biomass, geothermal, solar, municipal solid waste facilities, hydropower, fuel cells, and CHP/WHP, to name a few. The legislation also would encourage a range of building efficiency investments to qualify, including energy-efficient upgrades for buildings, electricity storage, carbon capture and storage, industrial retrofits and ESPCs.
For the past century, conventional fuels have been able to access low-cost MLP financing to support infrastructure development. S. 1841 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. 1841 is expected to generate billions in additional investment in efficient commercial, industrial and related industries quickly upon enactment.