Bipartisan Group Urges Obama To Work With Congress On MLPs, REITs For Renewable Energy
NAW Staff, Monday 17 December 2012 - 15:35:07
A bipartisan group of 29 U.S. senators and representatives sent a letter to President Barack Obama last week calling for master limited partnerships (MLPs) and real estate investment trusts (REITs) to be priorities in the federal government's "all of the above" energy strategy.
MLPs allow regular investors to purchase shares in publicly traded partnerships just like stock shares and have been a key investment tool in the oil and gas industries since the 1980s. However, they are not currently available to renewables such as wind power.
Earlier this year, Sens. Chris Coons, D-Del., and Jerry Moran, R-Kan., introduced the MLP Parity Act
, which would make MLPs available to renewable energy.
In the letter
, the lawmakers urged Congress to reconsider this proposal.
“Minor changes to the federal tax code could provide the renewable energy industry access to large pools of low-cost private capital,” the lawmakers wrote. “Already, oil, gas and coal infrastructure projects raise cheap capital by selling shares of master limited partnerships, as do energy transmission projects using real estate investment trusts. Wind, solar and other renewable energy projects cannot use these investment tools and, therefore, suffer from high costs of capital.”
“Opening MLPs and REITs to renewable energy would level the playing field by giving renewables the same access to low-cost capital enjoyed by oil, gas, coal and transmission infrastructure projects,” the letter continues. “Small tweaks to the tax code could attract billions of dollars in private-sector investment to renewable energy deployment, reduce the cost of renewable electricity by up to one-third and dramatically broaden the base of eligible investors.”
The full letter can be viewed here
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