Rep. Earl Blumenauer, D-Ore., has amended and reintroduced legislation from the 116th Congress to allow entities with little to no tax liability to still take advantage of energy-related investment tax credits (ITC) and production tax credits (PTC).
The bill in the 116th Congress, which ended on Jan. 3, 2021, had allowed for the transfer of such tax credits to other project partners.
The Renewable Energy Incentive Act introduced on May 13 would instead allow for the direct payment of energy-related ITC and PTCs as refundable tax credits. The bill has also been modified to include public power utilities as eligible entities.
In a May 13 letter to Blumenauer, Joy Ditto, President and CEO of the American Public Power Association, expressed thanks to the lawmaker “for working to ensure that the Renewable Energy Investment Act will allow all electric utilities, including public power utilities, to benefit from incentives intended to encourage critical energy investments needed to transition to cleaner generating technologies. This will make these incentives fairer and more effective.”
Ditto noted that federal tax expenditures are the primary tool Congress uses to incentivize energy-related investments. However, such incentives do not work for tax-exempt entities, such as public power utilities. “That means public power utilities are deterred from owning such facilities as a direct result of federal policy -- and explains why 80 percent of the nation’s (non-hydropower) renewable energy generating capacity is owned by merchant generators,” she wrote.
The Renewable Energy Investment Act “is designed to address this inequity by allowing for the direct payment of energy production and investment tax credits to any entity that owns the project. This would remove the financial disincentive for public power utilities to own such facilities, which are needed to transition to cleaner generating technologies and address climate change, and would allow the full value of these credits to pay for additional investment or be passed on to our 49 million customers,” Ditto said.