Push is on to restore clean-power credit

OREM — The push is under way to restore a state tax credit for producers of alternative energy, a credit that could make or break a proposed wind farm at the mouth of Spanish Fork Canyon.

The 2007 Legislature is still more than two months away, but proponents of restoring the tax credit are trying to get a head start so it doesn't meet the same fate it did this year, when it was pushed aside in the final hours of a furiously busy session.

In recent years, the alternative energy tax credit has been a mainstay in Utah's tax code. The tax credit has been in place since 1981. It was last authorized in 2001, for a five-year period to end at the end of this year.

A bill to re-authorize it through 2011 was proposed in the last session, was passed by the House and favorably recommended by a Senate committee, but it did not make it to the Senate floor for a vote.

Sen. Howard Stephenson, R-Draper, is working on a bill for the upcoming session to re-authorize the credit.

"This is a very high priority for me, because I believe we need to be focusing on clean energy generation," Stephenson said.

Stephenson's bill likely would alter the way the credit is applied, however. In the past, the tax credit was a one-time benefit available at the construction of a new system for alternative energy production. The amount available depended on the system's capacity.

Though he is still hammering out the details, Stephenson said his bill would change the credit so that it is based on the amount of energy that the system actually produces, and the credit would be distributed over the first four years of the project's life.

"The real benefit to our economy and to our society is when power is actually generated. ... It's clear to me that our past credit was rewarding the wrong thing," Stephenson said. "It was rewarding capital expenditure rather than energy created. I want to change the paradigm."

Stephenson's proposal is based on the model for the federal tax credit, which gives alternative energy producers a credit of 1.9 cents per kilowatt hour of power produced. Stephenson's bill would extend a credit of 0.35 cents per kilowatt hour of power produced. The bill was passed Wednesday by the Legislature's Revenue and Taxation Interim Committee.

Representatives from Wasatch Wind, which hopes to begin construction on a $30 million wind park in Spanish Fork in 2007, are depending on the credit's reauthorization in order to move forward with their project and favor the proposed new version of the credit.