Energy tax credits included in Senate budget deal
- The proposed budget deal pending a vote in the U.S. Senate includes an extensions to a variety of energy tax credits, including nuclear incentives vital to the completion of the sole reactor project under construction in the United States today.
- The proposed bill would lift the 2020 in-service deadline for nuclear facilities to qualify for tax credits and extend tax breaks for a variety of energy technologies, including combined heat and power, fuel cells, solar water heaters, geothermal heat pumps and more.
- The budget deal must be passed by midnight Thursday to avoid a government shutdown, and the House is likely to oppose the inclusion of some energy tax extenders.
Inclusion of various energy tax extenders is a win for the nuclear sector and small gas and renewable energy technologies, which saw themselves left out of the Republican tax overhaul at the end of 2017.
At that time, Sen. Lisa Murkowski (R-AK) assured those sectors that there would be a "way forward" for the extenders in the new year. Now they appear poised to be included in the Senate's final continuing resolution, which would keep the government funded until March 23.
The bill would lift the 2020 deadline for nuclear facilities to qualify for tax credits that pay $0.018/kWh to power generated from new nuclear facilities. That provision is crucial for the expansion of the Vogtle nuclear project in Georgia, which owner Southern Co. says will not be completed until after the 2020 deadline.
The provision could also assist emerging nuclear technologies, such as small nuclear reactors (SMRs) in development today. This week representatives from the Department of Energy told a House committee those technologies could be a "game changer" for the troubled U.S. nuke sector.
The proposed bill would also extend property tax breaks for a number of small gas and renewable technologies. CHP, microturbines and fuel cells would all be given five-year extensions.
Inclusion in the Senate bill, however, does not mean the tax extenders are safe. Yesterday, House leadership made clear they are opposed to including the provisions in a final continuing resolution.
“I‘m not a fan of extenders. I think short-term temporary policies are rarely the best," House Ways and Means Chair Kevin Brady said Tuesday, according to Reuters. “Each of those provisions has an industry that’s tied strongly to it, as well as members of Congress who advocate for it. So that’s why I think having a good thorough review of how those fit in, in a post tax-reform world, is the right way to go about it.”
- U.S. Senate Proposed CRomnibus
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