APPA is asking its members to contact Senate Republican offices to urge that the tax reconciliation bill not repeal the statutory exceptions to the domestic content requirement for elective payment.
The tax title of the Big Beautiful Bill Act of 2025 as drafted by the Senate Committee on Finance would increase costs and reduce local control of generation for locally owned public power and rural electric cooperatives seeking to develop nuclear, hydropower, and other tax creditable generation and storage resources, APPA noted.
Specifically, Section 75012(f) of the tax title would repeal the statutory exceptions to domestic content requirements for claiming energy investment tax credits (ITCs) and energy production tax credits (PTCs) via elective payment.
Currently, a public power utility or rural electric cooperative must meet domestic content requirements unless:
• The content needed is not available in sufficient quality or quantity; or
• Meeting the domestic content requirement would increase project costs by more than 25 percent.
For more information see the APPA Elective Pay Blueprint for Public Power.
By repealing these exceptions, the tax title would require public power utilities and rural electric cooperatives to prove that they had domestically sourced all iron and steel and 55 percent of the manufactured products for a project to qualify for either the ITC or PTC.
While many foreign commodities would already be prohibited for use in such projects under “Foreign Entity of Concern” (FEOC) provisions added elsewhere in the tax title, the repeal of the statutory exceptions would also prohibit sourcing key materials from non-U.S, non-FEOC suppliers, APPA noted.
For example, under the tax title:
• A taxable company that meets FEOC requirements could claim a full ITC or PTC for a hydropower project using Canadian-made turbines, or for a nuclear power plant using a Japanese reactor.
• But a public power utility or rural electric cooperative that meets FEOC requirements trying to build exactly the same projects could not claim any tax credit at all – even if no domestic supplier was available or if using a domestic supplier would be cost prohibitive.
