U.S. Sens. Chris Coons, D-Del.; Jerry Moran, R-Kan.; Debbie Stabenow, D-Mich.; and Lisa Murkowski, R-Alaska, re-introduced the Master Limited Partnerships Parity Act (MLP Parity Act) on Wednesday.
According to the senators, the legislation would grant investors in renewable energy projects access to a decades-old tax advantage that is currently available only to investors in fossil-fuel-based energy projects.
An MLP is a business structure that is taxed as a partnership, but whose ownership interests are traded like corporate stock on a market, the senators explain. By statute, MLPs have only been available to investors in energy portfolios for oil, natural gas, coal extraction and pipeline projects. 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.
However, the senators add, investors in renewable energy projects have been explicitly prevented from forming MLPs, starving a growing portion of the U.S.' domestic energy sector of the capital it needs to build and grow.
"The bipartisan Master Limited Partnerships Parity Act levels the playing field to help clean and renewable energy projects compete fairly with traditional energy projects," Coons says." This market-driven solution supports the all-of-the-above energy strategy we need to power our country for generations to come.
"Our legislation will unleash private capital, create jobs and modernize our tax code," he continues." That's why it has earned broad support from Republicans and Democrats in Congress, as well as academics, outside experts, business leaders and investors."
The senators say the MLP Parity Act re-introduced Wednesday is improved and expanded from the version introduced in 2012. In addition to providing greater clarity on how expansion of the law would be implemented, the bill further widens the scope of projects that qualify for MLP status to include energy-efficient buildings, waste-heat-to-power, carbon capture and storage, and biochemicals.
A white paper on the MLP Parity Act can be downloaded here.