The U.S. Department of Treasury recently released a final rule on prevailing wage and registered apprenticeship requirements for purposes of energy tax credits as modified by the Inflation Reduction Act.
Completion of the rule provides final clarity on an important aspect of calculating the value of energy tax credits.
Perhaps more importantly, it also clears the way for Treasury to turn its attention to completing other pending guidance, such as domestic content requirements – and waivers – for claiming elective payment.
Generally, the IRA modified the production tax credit and investment tax credit to provide a reduced “base” rate, but an increased rate for projects meeting wage and apprenticeship requirements.
APPA has not heard concerns about public power utilities ability to meet the requirements although some may face issues where: a) even collectively bargained wages may not meet the wage requirements required by the guidance; or b) worker job classes provided under prevailing wage standards may not directly align with actual job duties of utility employees.
Both may require public power utilities to make changes to qualify for the increased credit.
It is worth noting that the standards apply to the workers completing the work; i.e., the standards apply to a contractor’s employees if a contractor is being used to complete the tax credit project work, APPA said.
