- Associated Press - Sunday, March 30, 2014

DES MOINES, Iowa (AP) - Iowa senators last week unanimously approved bills designed to encourage the state’s production of wind and solar power, but a proposal to encourage more use of renewable fuels was delayed because of concerns about cost.

While the Senate voted 46-0 for the solar and wind bills, Republican leader Sen. Bill Dix sought a delay in the biofuels bill, which would temporarily increase the tax credit for E15, a fuel with 15 percent corn-based ethanol. Most fuel sold in Iowa has 10 percent ethanol.

The biofuels bill, introduced by Sen. Robb Hogg, D-Cedar Rapids, would increase the tax credit in the summer from 3 cents per gallon to 10 cents a gallon to encourage petroleum distributors to offer more E15. Such a move is a response to federal rules about how the ethanol in E15 is mixed with gasoline in the summer, a requirement that drives up costs.

“They look at the summer months and believe it’s not economical. We believe by targeting an additional tax credit in those summer months we can overcome that barrier and get E15 more widely used,” Hogg said Thursday.

The bill also extends an expiring 2-cent-per gallon tax credit for biodiesel through 2019.

The biofuels bill is estimated to cost state government nearly $23 million from 2015 through 2020.

The only lobbying group registered in opposition to the bill is the Petroleum Marketers and Convenience Stores of Iowa, a trade group for convenience stores and wholesale and retail fuel marketers.

The group’s CEO and lobbyist did not return messages Friday.

Petroleum industry groups, including the American Petroleum Institute, which represents hundreds of oil and natural gas companies, oppose the widespread use of E15 and claim the higher concentration of ethanol can cause damage to vehicles, even those approved by the Environmental Protection Agency to use it.

Dix sought the delay on the biofuels bill vote, saying his members needed more time to review its cost to the state’s budget. The Legislative Services Agency, which analyzes the fiscal impact of legislation for lawmakers, released its cost estimate on Thursday just prior to debate.

“We wanted to have some time to look at the fiscal note and give some consideration to the impacts of that,” Dix said. “There may be a couple of other issues that members of our caucus want to explore more and gain a better understanding of.”

Dix said it’s likely the bill will be considered again soon.

Hogg expressed disappointment in the delay and noted Republicans and Democrats in Iowa typically are of the same mind on renewable fuel issues.

“I hope this is not a sign that Sen. Dix is going to oppose this bill,” Hogg said.

The Iowa Renewable Fuels Association lists 15 gas stations in the state registered to sell E15 fuel.

The bill is supported by renewable energy groups, Iowa Farm Bureau Federation and Iowa Corn Growers Association.

If it passes the Senate, House Speaker Kraig Paulsen, R-Hiawatha, said it would be studied.

“There’s some concern how the petroleum marketers would manage that,” he said. “We’re obviously supportive of promoting ethanol and in particular moving E15 is very helpful to the ethanol industry in the state. We’ll just have to work through all the details of the bill.”

The wind and solar bills also were introduced by Hogg.

One would extend the deadline for putting in place wind energy projects in order to qualify for the state’s energy generation tax credit. It’s expected to cost $75 million from 2016 through 2029.

No organizations registered to oppose the bill.

The other measure would increase the annual tax credits available for installing solar energy systems to $4.5 million from the current $1.5 million.

Hogg said demand for the solar tax credits has surpassed the original $1.5 million passed in 2012.

“We need to triple the credits so that we can respond to the continually growing demand for solar power,” he said. “We are literally growing a new industry in our state.”

The credits are estimated to cost the state general fund $9 million from 2015 through 2022.

The Republican-led House will give the bills serious consideration, Paulsen said.

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