Casey got tax credits on Inflation Reduction Law for clean energy investments made in “energy communities,” places with economies that depend on coal, oil or natural gas
Casey presses the administration to close a loophole that could exclude many former fossil fuel sites from the additional tax credit for clean energy development
Washington D.C. - Today, US Senator Bob Casey (D-PA) urged U.S. Treasury Secretary Janet Yellen and U.S. Department of Energy Secretary Jennifer Granholm to clarify guidance for the Clean Energy Bonus Tax Credit to ensure all Pennsylvania energy communities to legitimately benefit from the bonus tax credit. senator casey fought to include this bonus credit in the Inflation Reduction Law (IRA), to encourage clean energy deployment and manufacturing in “energy communities,” areas whose economies and jobs depend or have depended on the coal, oil or natural gas energy sectors. Currently, the Treasury Department's unclear guidance on eligibility for the additional tax credit effectively excludes certain energy communities. Casey's letter urged the Departments to issue clarified and more inclusive guidance so that Pennsylvania's many energy communities can benefit from the investment and jobs this credit will generate.
“If the Treasury does not issue these clarifications, our economy risks missing out on potential investment and job creation in the communities that need it most and our climate could miss out on clean energy development. Energy communities in my home state of Pennsylvania have powered our nation for generations. Issuing clarifications will allow them to continue this legacy.” Senator Casey wrote.
Clarifying guidance on eligibility for the additional tax credit so as not to inadvertently exclude former fossil fuel power plants will allow the additional tax credit to be allocated in accordance with the original intent of the bill. As fossil fuel sites continue to retire and become optimal sites for clean energy redevelopment, clarifying additional tax credit guidance will increase opportunities for the economies of energy communities to be supported by clean energy investments.
Casey has consistently fought for new federal initiatives to support economic revitalization and workforce development for Pennsylvania communities and energy workers. In 2021, Casey worked to get through he Employment and Infrastructure Investment Law bringing billions of dollars to Pennsylvania to build clean energy infrastructure, improve roads and bridges, expand high-speed Internet access and more, all while creating good-paying jobs. Approved in 2022, the Inflation Reduction Law It also made significant investments in new energy manufacturing, including solar panels, wind turbines and clean battery systems. Casey fought to include strict domestic content rules to ensure projects use 100 percent American-made steel and iron.
Notably, this is not the first time Senator Casey has called on the Treasury Department to issue guidance that prioritizes American workers and manufacturing. In March 2023, Casey urged the Treasury Department to quickly implement guidance for clean energy tax credits in the IRA that incentivizes companies to use American steel, iron, and manufactured goods when building new energy projects. Following his defense, the Treasury Department issued guidance on these tax credits.
In June 2023, Senator Casey delivered a moving speech to union workers and business leaders in Pittsburgh to outline his vision for the United States to take control of its economic future by investing in American workers and manufacturing, as well as preventing investments in national security sectors from going to countries of interest. including China. In July, the Senate overwhelmingly approved Senator Casey's legislation to filter US investments in foreign countries of interest, such as China, by 91 votes in favor and 6 against. Building on Casey's efforts, the Biden Administration issued an executive order addressing the issue weeks later.
In October 2023, Casey announced the launch of the two hydrogen centers, funded by the Employment and Infrastructure Investment Law: he Mid-Atlantic Clean Hydrogen Center (MACH2)based in southeastern Pennsylvania, and the Appalachian Regional Clean Hydrogen Center (ARCH2) Serving Pennsylvania, West Virginia, Ohio and Kentucky. These centers will bring jobs, economic growth and energy innovation to the Mid-Atlantic and Appalachian Basin. Additionally, Casey announced The Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization (GTI of Energy Communities) Rapid Response Team. This team will help Pennsylvania organizations, businesses and local governments coordinate the federal resources they need to position the Commonwealth as a national leader in next-generation energy and train workers.
TO 2023 report shows that since the passage of the IRA, energy communities are leading the nation in new investments in clean energy. You can find a complete map of areas in Pennsylvania that may be eligible for the Energy Communities Bonus Credit. here.
The full text of the letter is below and the signed PDF can be found. HERE
Dear Secretary Yellen and Secretary Granholm:
I am writing to you today regarding the implementation of key tax credits in the Inflation Reduction Act (IRA) to ensure that the upcoming guidelines support the communities and workers who have powered our Nation. Congress intended the energy communities bonus credit for the Investment Tax Credit (ITC) and Production Tax Credit (PTC) on clean energy to give private clean energy developers an incentive to locate their new investments in clean energy in energy communities and at former fossil fuel energy sites. So-called “brownfield sites” that were previously dedicated to fossil fuel production or power generation and may require remediation are ideal sites for new renewable energy projects, such as wind, solar, and battery storage, due to its pre-existing connections to the electrical grid and existing workforce and infrastructure. However, I am concerned that the guidance being adopted by the Treasury will result in some former natural gas plant sites not qualifying for the energy communities bonus as expected.
As one of the lead authors of the Community Energy Bonus Tax Credit, my intent and that of the Finance Committee was to allow former fossil fuel energy generation sites to be redeveloped using the Community Energy Bonus Tax Credit as incentive. However, as currently proposed, the rule would prevent this.
The Inflation Reduction Act builds on the definition of a brownfield under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA; 42 USC § 9601(39)) to provide categorical eligibility for energy community bonus credits . However, in its rule interpreting IRA community energy credits, Treasury provides some exemptions to this eligibility to prevent bad actors and polluters from accessing federal tax dollars, just as exemptions under CERCLA work. While I agree that it is appropriate to prevent bad actors from accessing federal tax dollars, I believe there may be some situations where clean energy developers who are not a party to the site's contamination and who are committed to purchasing and remediating a site should be eligible to access energy communities. credit. Developers considering site acquisition and development need Treasury to clarify prior to site acquisition that they will be able to access bonus credits from energy communities once the required remediation work is approved. Situations such as this provide a double benefit by first undertaking an environmental clean-up and then investing in the community and I request that the Treasury provide guidance that clarifies their eligibility in this regard and under such circumstances. The Environmental Protection Agency has published guidance with similar nuances that can help inform IRS guidance.
Additionally, the Treasury Department should consider the impacts of the exclusions and how they interact with the designation of an abandoned site. For example, EPA has recognized that the breadth of the exclusive language may result in the inadvertent ineligibility of certain sites that should be eligible for brownfield funding and has interpreted the language to permit such eligibility, particularly with respect to certain sites permitted under the EPA. Solid waste. Elimination Act, Toxic Substances Control Act, and Clean Water Act. Virtually all natural gas power generation facilities in operation have permits under the aforementioned laws to allow their operations. However, by cross-referencing CERCLA exemptions, Treasury potentially excludes eligible sites from brownfield designation. Where environmental remediation and development is possible, Treasury should ensure that eligible brownfield sites are not excluded based on their permitting needs under the aforementioned laws.
According to the Energy Information Administration, coal and natural gas plants account for 98 percent of the 15.6 gigawatts of electric capacity retired in the U.S. in 2023. This leaves a significant gap in our power generation capacity and a hole in the economies that depended on these plants. for jobs and tax revenue. The Energy Communities Bonus Credit is the mechanism by which we can fill these gaps with good-paying, clean energy jobs.
To that end, I urge the Treasury Department and the Internal Revenue Service (IRS) to issue guidance that will enable developers and operators engaged in brownfield remediation and development and those seeking to redevelop natural gas power plants retired and in retirement access the IRA energy community. bonus credits. If the Treasury does not issue these clarifications, our economy risks missing out on potential investment and job creation in the communities that need it most and our climate could miss out on clean energy development. Energy communities in my home state of Pennsylvania have powered our nation for generations. Issuing clarifications will allow them to continue this legacy.
Thank you for your attention to this important matter. I look forward to working with you to achieve our climate goals while protecting and supporting the workers and communities that powered our nation through industrialization.
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