House Committee Passes Bill That Retains Direct Payment of Certain Energy Tax Credits

by Paul Ciampoli
APPA News Director
June 14, 2023

The House Committee on Ways and Means on June 13 passed legislation that retains direct payment of certain energy tax credits but repeals some aspects of the energy tax provisions of the Inflation Reduction Act.

H.R. 3938, the Build It in America Act, would repeal the Clean Energy Production Credit, the Clean Energy Investment Credit, the Previously-Owned Clean Vehicle Credit and the Commercial Clean Energy Vehicle Credit.

At this point, it is not clear when the measure might be considered by the House and Senate Finance Committee Chairman Ron Wyden (D-OR) has said the repeal of the energy tax provisions will not be considered in his committee.

Under the bill, in general, there would be no production tax credit for wind, solar, closed-loop biomass, open-loop biomass, geothermal energy, municipal solid waste, qualified hydropower production, and marine and hydrokinetic renewable energy facilities construction of which begins after December 31, 202; and

Also, there would be no investment tax credit for solar energy property, fuel cell property, geothermal power property, fiber optic solar and electrochromic glass property, small wind property, waste energy recovery property, energy storage technology property, biogas property, microgrid controller property, combined heat and power system property placed in service after December 31, 2024.

The American Public Power Association strongly supports the use of refundable direct payment tax credits as a way of ensuring access to energy tax credits for projects owned by public power.

As a result, it is glad to see the decision to retain access to refundable direct payment tax credits for other tax credits, including the production tax credit, investment tax credit, carbon capture credit, the storage credit, and the advance nuclear tax credits.

 At the same time, the Association said that by repealing the new “tech-neutral” production and investment tax credits created under IRA and allowing the current ITC and PTC to expire after 2024, the bill would inject needless uncertainty into ongoing federal incentives for these investments, putting in jeopardy public power’s ability to reliably and affordably make the investments needed to transition to a cleaner generation resource mix.