Kulongoski advocates for quick review of energy tax credits

SALEM — Gov. Ted Kulongoski has asked two state agency heads to quickly review whether Oregon's increasingly expensive incentives for renewable energy companies are necessary, especially for wind energy.

On Tuesday, he told state Energy Department chief Mark Long and Tim McCabe, director of the Oregon Business Development Department, that he wants the recommendations by month's end.

Lawmakers already have been gearing up to reduce the Business Energy Tax Credits when the Legislature meets in February.

The governor remains a staunch supporter of the incentives as a way to bring jobs and clean power to Oregon, but also thinks they need constant review, Kulongoski spokeswoman Anna Richter Taylor said.

"He's concerned about whether the policy is delivering what we want to accomplish," Taylor said. "If it's not necessary to spend this money and still have a thriving wind industry, then let's take another look at this policy."

The Oregonian has reported that since 2007, the cost of the energy tax credits has gone from about $10 million a year to an estimated $167 million for the 2009-11 biennium.

Estimates for 2011-13 approach a quarter-billion dollars.

The newspaper's investigation showed that Oregon spent millions of dollars in energy tax credits on companies that went bankrupt, never operated or divided their projects into multiple facilities to get additional credits.

Concerned lawmakers approved a bill earlier this year that cut maximum incentives to large wind farms from $10 million to $3.5 million. Kulongoski vetoed the bill, which would have saved the state an estimated $20 million in 2009-11.

On Thursday, the House and Senate revenue committees are expected to discuss potential legislation to rein in the tax credits.

"We're already clearly on record that there are issues that need to be dealt with," said Geoff Sugarman, spokesman for House Speaker Dave Hunt, D-Gladstone. "We are committed to fixing the issues."

In a letter, the governor told Long and McCabe that recent changes in the economy, and energy policies elsewhere, should be factored into the review of the incentives.

In early November, Long issued a list of proposed new rules aimed at curbing the incentives. The rules would give the state more leeway to reject applications for the tax credits, define more closely what constitutes a single project and allow the state to reclaim money if the project fails to meet its promises.


Information from: The Oregonian, http:www.oregonlive.com

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