Washington D.C., April 21, 2021—The American Public Power Association greatly appreciates the work Senate Finance Committee Chairman Ron Wyden (D-OR) and his staff have put into refining and improving federal energy tax incentives in the Clean Energy for America Act (CEA). The CEA recognizes that tax-exempt entities are excluded from energy investment tax incentives, which are intended to promote non-emitting resources to address climate change. Lack of access to these incentives makes it difficult for public power utilities to make investments in clean energy resources. This is a significant omission given that tax-exempt entities, including public power utilities, serve nearly 30 percent of the nation’s retail customers, or approximately 90 million Americans.
The CEA encourages key investments by public power utilities and rural electric cooperatives by allowing these projects to be financed with taxable direct payment Clean Energy Bonds (CEBs). Projects financed by a CEB would not qualify for either the investment or production tax credits. However, the federal government would reimburse the project owner by making payments of up to 70 percent of the interest paid on a CEB. These payments would provide a significant savings over the life of a project.
The GREEN Act, which will be considered by the House of Representatives later this year, takes a different approach—allowing public power utilities to receive discounted tax credits and production tax credits on a refundable basis.
APPA is pleased to see that Congress is now considering how to best to ensure that all utilities are included in energy incentives, not stuck on whether to do it at all. With these incentives, not-for-profit utilities will be better positioned to finance and build clean energy resources to help face the challenges posed by climate change.