Federal tax incentives and disincentives for the adoption of wood-fuel electric-generating technologies

In this paper, we estimate the effects of current federaltax policy on the financial criteria that investor-owned electric utilities (IOUs) and non-utility electricity generators (NUGs) use to evaluate wood-fuel electric-generating technologies, distinguishing between dedicated-plantation and wood-waste fuels. Accelerated tax depreciation, the 1•5 ¢/kWh production tax credit for the dedicated-plantation technology, and the alternative minimum tax are the most important tax provisions. The results indicate that federal tax laws have significantly different effects on the evaluation criteria, depending on the plantʹs ownership (IOU vs NUG) and type of fuel (dedicated-plantation vs wood-waste).