September 26, 2007—Kentucky Governor Ernie Fletcher recently signed wide-ranging energy legislation that creates a variety of incentives for biofuels and renewable energy, according to a report from the US Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy (EERE). Among its numerous initiatives, House Bill 1:
- offers a refund of sales and use taxes on machinery or equipment that improves a facility’s energy efficiency by at least 15%;
- encourages the use of green building principles and energy saving contracts for state-owned buildings;
- moves toward shifting half of the state-owned passenger vehicles to hybrids, alternative fuel vehicles, advanced lean burn vehicles, or fuel cell vehicles;
- encourages alternative fuel use in state vehicles;
- offers incentives of up to half the capital investment in a project that creates alternative fuel from biomass or that creates electricity from renewable energy sources. To qualify, a biofuel facility must involve a capital investment of at least $25 million and a renewable power facility must involve a capital investment of at least $1 million; and
- expands an existing tax credit for biodiesel and adds new tax credits for other biofuels. The bill creates separate new tax credits of $1 per gallon for ethanol produced from corn, soybeans, or wheat and for ethanol produced from cellulosic biomass, each of which includes a cap of $5 million.
