Earlier this week, Senators Mary Landrieu (D-La.) and Susan Collins (R-Maine) lent their support to a revamped version of the Master Limited Partnerships Parity Act.  The bill was reintroduced earlier this year by Senators Chris Coons (D-Del.) and Jerry Moran (R-Kan.).  The bill would expand the master limited partnership business structure to renewable energy projects, and “level the playing field.”  Currently, the structure is available to traditional fossil-fuel based energy projects, but specifically excludes renewable projects.

A master limited partnership (“MLP”) is a corporate structure that is taxed as a partnership but whose interests are publicly traded similar to corporate stock.  The structure combines the fundraising power of a corporation with the tax treatment of a partnership.  MLPs are currently only statutorily available to investors in oil, natural gas, coal extraction, and pipeline projects. An MLP structure allows these types of projects much greater access to capital, and the projects are much more liquid than traditional financing options.  Thus, they attract a larger pool of private investors.

Senator Coons notes that opening up the MLP structure to the field of renewables helps the country move forward with advancing its “all-of-the-above” energy goal.  The bill would modify the federal tax code to open up the corporate structure and associated tax advantages to investors in renewable energy, thereby creating a broader base of private capital and potential investors in such projects.

The bill has a broad range of supporters, including democrats and republicans, businesses and trade associations and environmental, finance and investment groups.