Bill would extend MLPs to US RE

Four US senators – two Democrats and two Republicans – have introduced a bill that would extend master limited partnerships (MLPs) to renewable energy projects.

A MLP is a business structure that is taxed as a partnership, but whose ownership interests are traded like corporate stock on a market.

By statute, MLPs have only been available to investors in energy portfolios for oil, natural gas, coal extraction, pipeline projects and more recently, CO2 captured from power generation facilities.

These projects get access to capital at a lower cost and are more liquid than traditional financing approaches to energy projects, making them highly effective at attracting private investment, according to the bill’s co-sponsors.

“The bipartisan Master Limited Partnerships Parity Act levels the playing field to help clean and renewable energy projects compete fairly with traditional energy projects,” says Chris Coons, a Delaware Democrat.

The other co-sponsors are Debbie Stabenow, a Michigan Democrat, and Republicans Jerry Moran of Kansas and Lisa Murkowski of Alaska.

They say MLPs could “unleash significant private capital,” and combine the funding advantages of corporations and the tax advantages of partnerships.

“Capital formation remains one of the most difficult aspects of bringing a product to market. Our MLP Parity Act will reduce the cost of this capital and provide American consumers with more American energy sources,” says Moran..

Stabenow notes that clean energy entrepreneurs are inventing new technology, saving consumers money, reducing our dependence on foreign oil and creating American jobs.

“We cannot afford to lose these new technologies to China and other countries because we continue to give special treatment to oil companies while ignoring opportunities in clean energy,” she says.

A similar bipartisan bill has been introduced in the House of Representatives.

The US wind industry’s reliance on expensive tax-based investment hinders its ability to become more cost competitive with fossil fuels.