WASHINGTON, Sept 22 (Reuters) - The White House is backing a plan by House of Representatives Democrats to let renewable energy firms form tax-advantaged partnerships that the oil and gas industry has used for decades to build out the U.S. pipeline and storage infrastructure, according to three people familiar with the matter.

The expansion would allow the renewable energy industry - from wind and solar to biofuels like ethanol - to form master limited partnerships, known as MLPs, that combine the funding advantages of corporations with the tax advantages of partnerships.

The expansion is included in Democratic-backed $3.5 trillion spending legislation being considered in the House.

"An expansion could allow retail investors to direct invest in renewable energy projects, rather than only being able to invest in companies that may deal in renewables," said Clark Sackschewsky, tax market leader at BDO USA in Houston.

The sources, speaking on condition of anonymity, confirmed White House support for the plan, which is estimated to cost the U.S. Treasury almost $1 billion in lost tax revenue over a decade.

Some environmentalists had urged the White House to back a competing plan that would eliminate MLPs for the fossil fuel industry, arguing that the structure gives financial incentives to spur growth in oil and gas at a time when President Joe Biden's administration is trying to lower carbon emissions.

The oil and gas industry has financed billions of dollar in pipeline and storage products under MLPs since President Ronald Reagan first signed legislation in 1986 allowing them as a way to spur energy investment.

The Alerian MLP Index, a gauge of energy infrastructure MLPs, is currently valued at nearly $200 billion.

That index includes the largest pipeline transportation and storage companies, including Enterprise Products Partners and Energy Transfer.

The renewable energy industry has long sought access to the corporate structure as a way to even the playing field.

“This is about fairness and equity. This change could really jumpstart plenty of projects and help support lower carbon fuels,” said Geoff Cooper, head of the Renewable Fuels Association.

Several pipeline companies, largely oil and natural gas pipeline firms, have restructured in recent years after the U.S. regulators said they will no longer be allowed to recover an income tax allowance as part of fees they charge to shippers under a “cost of service” rate structure.

"The whole MLP structure is problematic from a governance perspective which has significantly dampened investor interest, said Andrew Logan, senior director of oil and gas at Ceres, adding that this might mute the impact of expanding MLP eligibility. (Reporting By Jarrett Renshaw and Laura Sanicola; Editing by Will Dunham and Franklin Paul and David Gregorio)