The section 29 tax credit was $1.055 an mmBtu during 1998. This represents only a tiny increase in the credit from the year before when it was $1.052. The IRS said there was not enough inflation to justify an increase in the section 45 credit. It remained at 1.7¢ a kWh during 1998. Credits for calendar year 1999 will not be announced until April next year.

The section 29 credit is an inducement to look in unusual places for fuel. A company can claim credits for producing gas from biomass, coal seams, tight sands, Devonian shale and geopressured brine, or synthetic fuels from coal. Credits run through 2002 or 2007 depending on when the project was placed in service. All qualifying projects must already be in service.

The section 45 credit rewards companies for producing electricity from wind or closed-loop biomass. The credit runs for 10 years from when a power plant commences operations. Projects must be in service by June 1999 to qualify.