This week, energy players called on Congress to pass the $ 1.75 trillion Build Back Better Act, a sweeping spending bill that includes the biggest job-creating investment in energy clean history of the United States and essential provisions to combat global warming that could provide significant long-term benefits for electricity customers.
HR 5376, which the United States House of Representatives narrowly approved on November 19, 2021, with a vote of 220-213, is currently under consideration in the United States Senate, where it has stalled in an effort to ‘get the 50 Democratic votes needed. to get the bill across the finish line and present it to President Joe Biden for signature to make it law.
If the entire bill fails, the United States may find itself unable to meet its international climate commitments under the Paris Agreement.
Among its many provisions, the bill would fund drinking water, energy efficiency and weather protection projects, as well as zero-emission electric vehicles (EVs) and heavy vehicles, according to its text. Federal funding is also 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 charge for certain facilities. oil and gas.
Congress must continue to work to pass this legislation, said Tom Kuhn, chairman of the Edison Electric Institute (EEI), which represents all investor-owned power companies across the country.
“EEI and our member companies… believe it is essential to take action to combat climate change, while providing reliable and affordable energy that powers our country’s economy and our way of life,” said Kuhn in a statement released Tuesday evening. “We firmly believe that we can accelerate towards a cleaner energy future if the right fiscal policies are in place, enabling utilities to further reduce their carbon emissions while maintaining the reliability and affordability of electricity for customers and the communities they serve. ”
Specifically, EEI and its member companies urged Congress to support technologically neutral tax policies in legislation that Kuhn said would provide the option to choose between the production tax credit (PTC) and the credit. investment tax (ITC) for solar energy; alternatives to standardization for regulated utilities; 100% direct payment for clean energy credits; a nuclear CTP for existing installations; new tax credits for storage, transportation and hydrogen; and the extension of the VE tax credit / VE infrastructure credit.
American Clean Power Association CEO Heather Zichal agrees, saying the Build Back Better Act provides “stable and predictable policies for renewable energy projects” that could help grow the U.S. economy and a clean energy future, in particular through tax credits for renewable energy production, energy storage, transmission projects, green hydrogen and the growing offshore wind energy sector and manufacturing associated national.
“The Build Back Better Act will help stimulate new investment, accelerate project development and create more than one million clean energy jobs by 2030,” Zichal said after the approval of the bill by the House in November 2021. “This will also help create growth opportunities for local communities and put the country on track to meet the goal of 100% carbon-free electricity by 2035 , which will require doubling the size of the electricity grid and tripling the amount of clean energy it carries.
In November 2021, Congress approved and Biden enacted the bipartisan $ 1.2 trillion infrastructure investment and jobs law, which the IEE’s Kuhn said provides for significant infrastructure investment. energy and new carbon-free technologies and includes a solid down payment on electric vehicle charging infrastructure. necessary to accelerate the electrification of the transport sector.
But compared to the Build Back Better proposal, the infrastructure law has a lower overall amount in climate change related investments.
“As this law advances transformational change for America’s infrastructure and promotes jobs, a lot more is needed,” Kuhn said. “We remain hopeful that Congress can reach agreement on additional legislation that incorporates forward-thinking actions to tackle climate change, including a strong clean energy tax package, as tax credits for the clean energy is a powerful tool in reducing energy prices for customers. “
In reality, To analyse published in October 2021 by research firm Rhodium Group revealed that the tax incentives and energy provisions of the Build Back Better Act – particularly those for the purchase of electric vehicles and for renewable energy projects like wind and solar – can help the United States move closer to 100 percent clean up the electricity grid, reduce pollution, and create or save hundreds of thousands of jobs.
“Tax credits can complement a clean electricity standard as well as potential future regulations on power plants focused on public health,” 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 an overhaul that modernizes tax incentives for the coming decade.” “
Citing Rhodium Group analysis, US Senate Finance Committee Chairman Ron Wyden (D-OR) recently said the tax provisions themselves could be responsible for reduced electricity emissions going up to 73% in a decade.
Kuhn reiterated that the package of tax incentives currently under consideration will help create a level playing field that recognizes the role of utilities in deploying cleaner energy. They could also support the preservation of the existing nuclear fleet so that new clean energy deployments contribute to further emission reductions.
“It’s important to note that they allow companies to make choices about the technologies they deploy, while balancing reliability and resiliency.”
Additionally, as the invoice includes an optional 100% direct payment for all credits, it “recognizes the importance of providing these technologies to customers in an affordable manner,” said Kuhn.
“Voters from all political parties support the expansion of clean energy,” added Zichal of the American Clean Power Association. “We are now urging the Senate to pass the Build Back Better Act and do its part to help deliver a clean energy future for Americans. Every state in the nation will benefit. “