Leveling the playing field for renewable energy vs. fossil fuels

MLP Parity Act: Enormous Benefits for Renewable Energy Industry

Kristopher Settle, theenergycollective.com

In what is the second bill introduced recently to reinforce the idea of energy efficiency in the last few weeks, a major financial breakthrough could clear a path towards substantial renewable energy growth in the US.

The Master Limited Partnerships Parity Act, or MLP Parity Act for short, is a simple, 600 word bill that sets out to address Congress for permission to define renewable energy companies in the same way as coal, oil and gas companies from a capital costs perspective. To understand how being classified as a Master Limited Partnership (MLP) would benefit a company, it’s important to understand how an MLP can be classified, and the advantages that are in play. Different corporate structures, like sole proprietorships, partnerships, S-corporations, C-corporations, and so forth have different means of personal responsibility, taxation standards, and cash flow generation.

A Master Limited Partnership, for example, is unique because it provides the taxation of a limited partnership with the ability to offer and sell stock publicly, like a corporation. This is an ideal set of standards for developing companies within an emerging industry that have drawn enough interest to attract considerable public funding, but whose investors want to get the most value for their investment. The bill would also make finance costs much less expensive for renewable energy companies, upwards of 50% less, in fact, as noted by Fierce Energy.

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