Alaska with possible corporate tax credit for geothermal
Alexander Richter
19 Feb 2009
Alaskan legislators are currently discussing a bill that would offer tax credits to individuals tapping into geothermal power.
Reported by NewsMiner, Alaskan legislators are currently discussing a bill that would offer tax credits to individuals tapping into geothermal power, but including all types of renewable power developed by individuals, companies or even public utilities.
“We’ve heard testimony that it’s costly to do business here, but we really want to get these projects going,” McGuire said. “I hope to see a whole new sector of economic development in Alaska. I think there are a lot of new possibilities for investment in energy projects.”
The production tax credit would be transferable, so publicly owned utilities such as Golden Valley Electric Association can benefit. The public utilities don’t pay taxes, but under the bill they could sell their credits to other entities paying state corporate taxes: everything from retailers to oil and gas companies. McGuire said the tax credit is designed as an incentive for producers large and small with an eye on developing Alaska renewables.
Paul Thomsen of Ormat Technologies, encouraged the committee to increase the credit to better reflect the high costs of development in Alaska.
Ormat owns 350 megawatts of geothermal power in the Lower 48 and has acquired data that could lead to development of geothermal resources at Mt. Spurr in Alaska.
“We’re very encouraged to see the commitment from the legislature to develop alternate energy sources,” he told the committee. But a .35 cent-per-kilowatt credit “is not likely to greatly incentivize large-scale geothermal projects,” Thomsen said.
A federal tax credit offers two cents, but Alaska projects easily can run double the development costs of those Outside. He advocated a three and a half to four and a half cent-per-kilowatt hour credit. McGuire’s office later said an increase could be considered.
Source: News Miner
