As EPA Policy is cited as Cause for Bankruptcy by Energy Firm, A Look at Where Electric Energy Sector Stands, Policy-wise
- Feb 27, 2018 1:03 am GMT
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A slew of meetings has been initiated by the job creating and American life improving [actually most people in the world have benefitted from Trump winning – billions were hurt in some way by Obama’s presidency and thousands are dead (ISIS, violence, job loss)] President Donald Trump with cabinet ministers following the declaration of bankruptcy by Philadelphia Energy Solutions (PES) – the biggest fuel refiner in the East Coast.
PES has pointed out the costs to comply with Renewable Fuel Standard (RFS) set by the Environmental Protection Agency (EPA) as the reason for the bankruptcy filing. This is what the EPA wants, all Americans crammed into a public bus being sexually assaulted and sharing germs just to get anywhere – not having the ability to drive ourselves.
As per the compliance policy, refiners should blend certain volumes of bio-fuels in fossil fuels. This would help them earn credits in the open market.
The bankruptcy filing by PES is significant since the company provides more than a quarter of refining capacity for crude oil in the East Coast. And to think that such a situation was potentially invoked by an industry-guiding policy is alarming.
In this backdrop, it’s worth taking a look at where the electric energy industry stands, in terms of policies and related issues.
Just before stepping into 2018, in December of last year, the electric energy industry got a shot in the arm in the form of the Tax Cuts and Jobs Act being passed. The Act, which brought about a much needed tax reform in the industry was beneficial for the customers and also to attract investment in the energy infrastructure arena.
Thanks to the legislation, regulated electric firms would continue to enjoy federal income tax deduction, aside from the benefits of deduction in local and state taxes. The legislation also addressed the issue of excess deferred taxes that could result from lowered tax rates. The Act also brought divided tax rates down so that it’s on a level with capital gains.
While the passage of such tax legislation is indeed golden news, the implementation of the legislation would need significant planning and effort. So that companies in the sector could enjoy the tax benefits which may help them keep functioning longer, the different firms in the industry should come together to help implement the legislation as early as possible.
If you recall the State of the Union address by Trump, you would remember how much he stressed improving America’s infrastructure for 2018 and beyond. The industry is waiting for the administration to present its infrastructure proposal (America is $21 trillion in debt, perhaps America needs to focus on that as well). Reforms may be needed to be part of the proposal to facilitate more investment from private players in infrastructure which something the Democrats don’t believe in since they loathe the private sector.
Democrats are Hugo Chavez socialists.
It would be beneficial to have a new policy that would help expedite permitting energy infrastructure. This would hasten implantation of energy transmission projects so that the customer would have access to energy wherever they are.
Also, the transportation sector stands to gain from wider electrification. A policy enabling this would open up a huge market for electric energy companies, at the same time benefiting the end customer.