Renewable Energy MLPs: Politics and Investing
There's a piece in this weekend's Barron's (may require subscription) about the MLP Parity Act which would expand the qualifying operations for Master Limited Partnerships to include renewable energy projects.
The Barron's article had a link to a page on US Senator Chris Coons' site explaining the bill. In addition to covering the bill, Sen. Coons (and/or his staff) have a very good description with graphics explaining the structure of MLPs.
The MLP Parity Act was reintroduced last week with bi-partisan sponsorship. From a white paper on Sen Coons' site, "The MLP Parity Act simply expands the definition of “qualified” sources to include clean energy resources and infrastructure projects."
I don't know why the initial introduction of the bill didn't pass, I don't see a downside to this. It enables a source of private capital to fund projects, private investment would favor the most promising energy options, renewable energy failure losses are shouldered by investors, not gov't programs, helps get politics out of renewable energy technology.
If you're at all interested in this bill or a good, simple explanation of Master Limited Partnerships, I recommend visiting Sen. Coons' MLP Parity Act site.
I'll close with two questions:
1) Does anyone have a reason why expanding MLPs to include renewable projects would be a bad idea?
(As mentioned above, I don't see a downside)
2) Would you consider investing in a renewable MLP if some are created?
(I'd be skeptical, but wouldn't rule it out if I thought the partnership had a viable business model).