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.