With the end of the year and the 113th Congress looming, the lame duck session is winding down, although lawmakers are still far from coming to an agreement on the fiscal cliff. As fiscal cliff negotiations continue, tax extenders programs, such as the production tax credit, hang in the balance.

The Biomass Power Association, the Energy Recovery Council, the National Hydropower Association, and the Geothermal Energy Association sent a letter to President Obama December 7 urging him to modify the production tax credit for renewable electricity to allow projects under construction by the end of next year, rather than projects placed in service, to qualify. The commence construction language is included in tax extenders legislation (S. 3521) the Senate Finance Committee approved in August. The $205 billion Family and Business Tax Cut Certainty Act of 2012 would extend more than $18 billion in energy-related tax incentives as well as other provisions such as the patch for the alternative minimum tax and the research and development tax credit. Though the negotiations are slow, many are hopeful that Congress will pass the measure as part of a fiscal cliff avoidance package, but the commence construction clause may be returned to its original placed-in-service requirement, as the modification raises the total cost from $5.5 billion to $12.2 billion.

The American Wind Energy Association sent a letter to leading tax writers in the House and Senate December 12 indicating that it would accept a six-year phaseout of the production tax credit. The association’s first priority is congressional passage of the credit, and its phaseout proposal is drawing support from some key Congressional members as part of a path forward for inclusion into the broader agreement, though the proposal was presented as an idea to be considered within the context of comprehensive tax reform next year. Comprehensive tax reform may be the first order of business for the coming Congress, and renewable energy tax credits, including a renewable electricity production tax credit and an investment tax credit for solar energy projects, which cost $20 billion a year when combined with tax incentives for the fossil fuel industry, could be decreased or eliminated as part of the broader tax reform effort.

In addition to tax extenders efforts, the farm bill remains unfinished business in the 112th Congress. A bipartisan group of 33 senators led by Senators Max Baucus (D-MT) and John Hoeven (R-ND) sent a letter December 14 to Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY) urging them to include a five-year farm bill in the end of the year fiscal package.

The Senate also is likely to consider legislation (H.R. 1) that would provide relief to areas affected by Hurricane Sandy. Negotiations regarding the fiscal year 2013 Department of Defense authorization bill are also likely to continue into this week as both the House and Senate have requested a conference to iron out differences between their respective versions of the legislation.

Looking to the 113th Congress, Senator Barbara Boxer (D-CA), chair of the Senate Environment and Public Works Committee, said December 11 that following Hurricane Sandy, more Congressional members are open to readdressing climate change legislation. As a result, she is joined by Senators Tom Carper (D-DE), John Kerry (D-MA), and Bernie Sanders (I-VT) in forming a Senate caucus focused on moving climate legislation in the near future. Senators Boxer and Sanders announced recently that they plan on soon introducing climate legislation, and Senator Kerry said December 11 that he plans on working on climate change legislation as well.