DOE Awards $34.6 Million to States for Energy Efficiency
DOE announced last week that it will award a total of $34.6 million to 24 states, five territories, and the District of Columbia to improve energy efficiency throughout the nation. The funding is from DOE’s State Energy Program, which provides grants to states and directs funding to state energy offices from technology programs in DOE’s Office of Energy Efficiency and Renewable Energy (EERE). Among the states receiving funding are Maryland, which will receive $642,000, and New Mexico, which will receive $314,000. Those awards were announced, respectively, by Andy Karsner, DOE’s Assistant Secretary for EERE and Karen Harbert, DOE’s Assistant Secretary for Policy and International Affairs. See the State Energy Program Web site and the DOE press releases on the overall funding and the awards to Maryland and New Mexico.
New Iowa Legislation to Boost Renewable Fuel Use
Iowa Governor Tom Vilsack signed a legislative package last week that is expected to significantly increase the use of ethanol and biodiesel throughout the state. The legislation creates a tax credit for selling E85 (a blend of 85 percent ethanol with 15 percent gasoline) that starts at 25 cents per gallon and phases out by 2021, and another tax credit of three cents per gallon for diesel blends containing at least 2 percent biodiesel. The legislation also sets an additional tax credit of 6.5 cents per gallon of ethanol sold, but the tax credit is lowered if the retail dealer falls short of the state’s goals for total biofuel sales. For dealers that sell more than 200,000 gallons of motor fuel per year, the biofuels goal starts at 10 percent in 2009 and ratchets up to 25 percent in 2010. For dealers that sell less than 200,000 gallons of motor fuel per year, the biofuels goal starts at 6 percent in 2009 and increases to 25 percent in 2021. See the bill, House File 2754, on the Iowa General Assembly Web site.
The legislation also includes cost-shared funding to encourage biofuel conversions at fuel terminals and retail stations, and a separate bill appropriates $13 million for that purpose. See the press releases from Governor Vilsack and the National Ethanol Vehicle Coalition (NEVC).
While Iowa is working hard to encourage biofuel sales within the state, for some cities and states, it’s a breakthrough just to make E85 legal to sell. Arizona recently relaxed restrictions on E85 sales in the Phoenix area, which were put in place because of concerns about ozone formation, while Florida just removed a statewide ban on E85 sales. Meanwhile, in New York, Governor George Pataki has directed the New York State Thruway to start installing fuel dispensers for E85, B20 (a diesel fuel blend containing 20 percent biodiesel), and compressed natural gas (CNG). The governor also signed legislation that creates a tax credit of 20 cents per gallon for home heating oil that is blended with biodiesel. See the NEVC press releases about Arizona and Florida and the press release from Governor Pataki.
Wood-Burning Power Plants Planned for Four States
Projects are now planned or underway for wood-burning power plants in California, Minnesota, New Hampshire, and New York. In California, San Diego Gas and Electric Company (SDG&E) has signed a contract to buy 20 megawatts of power from Bull Moose Energy LLC starting in 2008. Bull Moose Energy plans to build a facility in southern San Diego County that will gasify tree trimmings and other biomass waste and convert it into electricity.
In Minnesota, the public utilities of two small cities?Virginia and Hibbing?are working together to add wood-fired boilers to each of their power facilities, which also provide district heating to their cities. Under the name of the Laurentian Energy Authority, the two utilities hold a contract to sell 35 megawatts of biomass power to Xcel Energy. Construction is underway, and the boilers should start providing steam to the cities’ power plants by the end of the year. The utilities plan to start by using wood waste, but are developing tree farms that will provide a dedicated energy crop for the power plants. See the SDG&E press release and the Web sites for the Hibbing< /FONT> and Virginia Public Utility Commissions.
In New York, Laidlaw Energy Group, Inc. has completed the financing for a 7-megawatt wood-fired power plant that will also supply heat to a lumber drying business. The project involves the conversion of an existing power plant that is currently fueled with natural gas. Meanwhile, the Public Service Company of New Hampshire (PSNH) has nearly completed its Northern Wood Power Project in Portsmouth. The project involves the replacement of a coal-fired, 50-megawatt boiler with a wood-fired boiler. See the Laidlaw Energy Group press release (PDF 80 KB) and PSNH’s Northern Wood Power Project Web site.
Hydropower Expansion Qualifies for Federal Tax Credit
PacifiCorp’s expansion of its J.C. Boyle hydropower facility on the Klamath River in Oregon is the first to qualify for a new federal tax credit, according to the Federal Energy Regulatory Commission (FERC). On one of its turbines at the facility, Pacificorp upgraded the runner?the part of the turbine that spins?and gained a 2.6 percent increase in efficiency. As a result, the facility is now producing an additional 8,343,000 kilowatt-hours of hydropower per year, which FERC has certified as eligible for a tax credit. The Energy Policy Act of 2005 aimed to encourage upgrades to existing hydropower facilities by allowing a tax credit for the incremental increase in power generation. The credit applies to upgrades placed in service between August 8th, 2005, and January 1st, 2008; the J.C. Boyle upgrade went online on November 8th, 2005. See the FERC press release and decision (PDF 16 KB).
PPL Corporation may soon follow suit. The company owns nine hydropower facilities on the Penobscot River in Maine, and has agreed to sell three of its dams in exchange for increased power production at three other dams. PPL will add “flashboards” on the top of the three dams, raising the water level by a foot and boosting their power production by about 10,000 megawatt-hours per year, an effort that should be eligible for the tax credit. Meanwhile, the Penobscot River Restoration Trust will have until June 2009 to buy the three other dams for $25 million. The trust members plan to remove two of the dams and bypass a third, improving access to 500 miles of river for the Atlantic salmon and 10 other native species of migratory fishes. See the PPL press release.
IRS Certifies Honda and Toyota Hybrids for Federal Tax Credits
The U.S. Internal Revenue Service (IRS) announced last week that seven Honda vehicles will qualify for a federal tax credit if purchased after January 1st of this year. The credits run from $650 to $2,100 for various models of Honda’s three hybrid vehicles: the Insight, Civic Hybrid, and Accord Hybrid. Since the tax credit depends in part on the vehicles’ air emissions, only the Insight model with a continuously variable transmission (CVT) qualifies for the credit, as well as low-emissions versions of the Accord Hybrid and the 2005 Civic Hybrid, although no restrictions are placed on the credit for the 2006 Civic Hybrid. The IRS had previously certified the tax credits for Toyota and Ford; in late April, the IRS added the 2007 Toyota Camry Hybrid and the 2007 Lexus GS 450h, with credits of $2,600 and $1,550, respectively. See the IRS press releases about Honda and Toyota and the Honda press release.
On the state level, South Carolina has become the latest to offer tax credits for hybrids and other clean vehicles. The state tax credit will be 20 percent of the federal tax credit. The bill was approved by the legislature on May 25th and signed by the governor on June 1st. See the bill, H 4312, on the South Carolina Legislature Web site.
IRS Issues Guidance on Commercial Building Tax Deduction
The U.S. Internal Revenue Service (IRS) issued last week an advance copy of a notice on how commercial building owners or leaseholders can qualify for a federal tax deduction by making their buildings more energy efficient. The commercial building deduction, which was enacted in the Energy Policy Act of 2005, allows taxpayers to deduct the cost of energy-efficient property installed in commercial buildings. The amount deductible may be as much as $1.80 per square foot of building floor area for buildings that cut their energy use by half. Buildings that fall below that target can still earn a deduction of 60 cents per square foot if they at least cut their energy use by one sixth.
Before claiming the deduction, the taxpayer must obtain a certification that the required energy savings will be achieved, and the notice describes how to obtain that certification. To support this effort, DOE will create and maintain a public list of software that must be used to calculate energy savings for purposes of providing the certification. See the IRS press release and the full notice (PDF 99 KB).
For more information on tax incentives, see EnergyTaxIncentives.org, a project of the Tax Incentives Assistance Project, as well as the Web site of the Commercial Building Tax Deduction Coalition. In addition, the National Lighting Bureau (NLB) has created a brochure (PDF 903 KB) about how the tax incentives encourage high-efficiency indoor lighting.
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| Kevin Eber is the Editor of EREE Network News, a weekly publication of the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE). |
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