House Democrats: Include ITC opt-out provisions for energy storage, transmission in Build Back Better Act
As Congress works to finalize the Build Back Better Act (BBB), more than a dozen Democrats recently urged leadership to include normalization opt-out provisions for energy storage and transmission investment tax credits (ITCs) in the final bill to help meet the nation’s climate change goals.
“Designed to spur billions in clean energy investments, this legislation is an opportunity to transform our energy grid to facilitate lower emissions, build grid resilience, and create millions of high-quality clean energy jobs,” the 15 lawmakers wrote in a Jan. 18 letter sent to congressional leaders.
At the heart of such investments, they wrote, is a hefty set of tax incentives for clean energy investment and production, high-voltage electric transmission, and technology innovation that could save Americans hundreds of dollars annually, according to their letter, which notes that the tax incentives are tied to strong labor and domestic manufacturing requirements, as well.
The lawmakers expressed support for the clean energy tax provisions included in both the House-passed BBB and the Senate Finance Committee-reported bills, which create new ITCs for energy storage and high-voltage transmission projects that could help spur America’s decarbonization efforts, according to their letter.
However, the tax provisions could be even more effective — particularly for the nation’s power sector — if normalization opt-out provisions for energy storage and transmission are included in the final BBB, they said.
“To set the United States on course to meet its COP26 climate targets of achieving a 50-52 percent reduction in greenhouse gas emissions below 2005 levels by 2030, electric utilities must take a leading role,” according to their letter. “They can do so by accelerating investments into clean energy deployment with ITCs that are free from normalization requirements that limit their ability to pass credit value to customers.”
Limiting the ability of utilities to quickly pass tax credits back to their customers due to existing normalization requirements results in higher-cost projects that could lead to more expensive clean energy and less deployment of it, wrote the members.
“The net result is a failure to achieve an additional 3 percent in total power-sector emissions reductions,” they wrote, adding that updated normalization rules, as they apply to new clean energy ITCs, could save customers money, reduce emissions and promote good-paying union jobs.
Those ideals are supported by numerous national environmental groups and labor unions, according to the letter, and would result in “building-out clean energy faster and significantly reducing greenhouse gas emissions.”
The letter is signed by U.S. Reps. Kurt Schrader (D-OR), Cindy Axne (D-IA), Steven Horsford (D-NV), Diana DeGette (D-CO), Susie Lee (D-NV), Ron Kind (D-WI), Jim Cooper (D-TN), Joe Neguse (D-CO), Ed Perlmutter (D-CO), Dina Titus (D-NV), Jason Crow (D-CO), Angie Craig (D-MI), Tom O’Halleran (D-AZ), Deborah Ross (D-NC), and Debbie Dingell (D-MI).
