Electric companies, clean energy stakeholders urge passage of Build Back Better bill
Energy stakeholders this week called on Congress to pass the $1.75 trillion Build Back Better Act, a sweeping spending bill that includes the largest job-creating investment for clean energy in American history and critical provisions to combat global warming that could deliver significant long-term benefits for electricity customers.
H.R. 5376, which the U.S. House of Representatives narrowly approved on Nov. 19, 2021, with a 220-213 vote, is currently under consideration in the U.S. Senate, where it has stalled in an effort to get all 50 Democratic votes that are needed to get the bill over the finish line to present it to President Joe Biden for his signature to make it law.
Should the entire bill fail, the United States could find it almost impossible to meet its international climate commitments under the Paris Agreement.
Among its many provisions, the bill would provide funding for safe drinking water, energy-efficiency, and weatherization projects, as well as electric vehicles (EVs) and zero-emission, heavy-duty vehicles, according to its text. Federal funding also is proposed for climate change research, transit services, and clean energy projects in low-income communities, and there is another provision that would establish a methane fee for certain petroleum and natural gas facilities.
Congress must continue its work to pass this legislation, said Tom Kuhn, president of the Edison Electric Institute (EEI), which represents all of the nation’s investor-owned electric companies.
“EEI and our member companies… believe it is essential to take action to tackle climate change, while also delivering the reliable and affordable energy that powers our nation’s economy and our way of life,” said Kuhn in a statement released late Tuesday. “We strongly believe that we can accelerate to a cleaner energy future faster if the right tax policies are in place, allowing electric companies to achieve even deeper carbon reductions while preserving electric reliability and affordability for the customers and communities they serve.”
Specifically, EEI and its member companies urged Congress to support technology-neutral tax policies in the legislation that Kuhn said would provide optionality in choosing between the production tax credit (PTC) and investment tax credit (ITC) for solar; alternatives to normalization for regulated electric companies; 100-percent direct pay for the clean energy credits; a nuclear PTC for existing facilities; new tax credits for storage, transmission, and hydrogen; and expansion of the EV tax credit/EV infrastructure credit.
American Clean Power Association CEO Heather Zichal agreed, saying the Build Back Better Act provides “stable and predictable policies for renewable energy projects” that could help grow America’s economy and a clean energy future, particularly via tax credits for renewable generation, energy storage, transmission projects, green hydrogen and the growing offshore wind energy sector and associated domestic manufacturing.”
“The Build Back Better Act will help spur new investment, accelerate the development of projects and deliver over one million clean energy jobs by 2030,” Zichal said following the House approval of the bill in November 2021. “It will also help create growth opportunities for local communities and put the country on a path to achieve the goal of 100 percent carbon-free electricity by 2035 — which will require doubling the size of the electricity grid and tripling the amount of clean energy carried by it.”
In November 2021, Congress approved and Biden signed into law the bipartisan $1.2 trillion Infrastructure Investment and Jobs Act, which EEI’s Kuhn said provides hefty investments in critical energy infrastructure and new carbon-free technologies and includes a solid down payment on the EV charging infrastructure that’s needed to accelerate the electrification of the transportation sector.
But compared to the Build Back Better proposal, the infrastructure law has an overall smaller amount in climate change investments.
“While this law advances transformational change for America’s infrastructure and promotes jobs, much more is needed,” Kuhn said. “We remain hopeful that Congress can reach agreement on additional legislation that incorporates forward-thinking actions to address climate change, including a robust clean energy tax package, as clean energy tax credits are a powerful tool in lowering energy prices for customers.”
In fact, analysis released in October 2021 by the research firm Rhodium Group found that the tax incentives and energy provisions in the Build Back Better Act — particularly those for buying EVs and for renewable energy projects like wind and solar — can help the U.S. get closer to a 100 percent clean electric grid, cut pollution, and create or save hundreds of thousands of jobs.
“Tax credits can complement a clean electricity standard as well as potential future public health-focused power plant regulations,” according to the Rhodium Group report. “Simply extending the current clean energy tax credit framework will lead to less pollution reduction and fewer jobs than a revamp that modernizes tax incentives for the decade ahead.”
In citing the Rhodium Group analysis, U.S. Senate Finance Committee Chairman Ron Wyden (D-OR) recently said that the tax provisions by themselves could be responsible for reduced electricity emissions of up to 73 percent within a decade.
Kuhn reiterated that the suite of tax incentives currently under consideration will help create a level playing field that recognizes the role of electric companies in deploying more clean energy. They also could support preserving the existing nuclear fleet so that new clean energy deployments contribute to additional emission reductions.
“Importantly,” he said, “they allow companies to make choices about what technologies they deploy, while balancing reliability and resilience.”
Additionally, because the bill includes 100-percent direct pay as an option for all the credits, it “recognizes the importance of delivering these technologies to customers in an affordable way,” said Kuhn.
“Voters from across all political parties support the expansion of clean energy,” added Zichal from the American Clean Power Association. “We now urge the Senate to pass the Build Back Better Act and do their part to help deliver a clean energy future for Americans. Every state in the nation will benefit from it.”
