By Kennedy Maize
“Dear Chairman Smith:
As Members of the House Republican Conference, we write to emphasize the importance of prioritizing energy affordability for American families and keeping on our current path to energy dominance amid efforts to repeal or reform current energy tax credits.”
On Monday (Mar. 9), 21 Republican members of the House Ways and Means Committee wrote to the tax writing committee’s chairman, Rep. Jason Smith (R-Mo.) arguing for preserving the green energy subsidies in the Biden administration’s 2022 Inflation Reduction Act. President Trump campaigned against Biden’s signature energy accomplishment during the campaign, saying in September, “We will rescind all unspent funds under the misnamed Inflation Reduction Act.”
Once in office, Trump has gone after IRA awarded funds. Time reported in late February, “Since his first day in office, President Donald Trump has been quick to attack climate initiatives and the green energy transition…. Among the biggest targets was the Inflation Reduction Act (IRA), a multi-billion dollar investment into climate and clean energy, which the Trump administration quickly paused funding on.”
As Trump’s attack on green energy has proceeded, it turns out that a lot of the Biden money has gone to Republican states and to projects favored by Republican politicians. Rep. Andrew Garbarino (R-N.Y.), who orchestrated the letter to Smith, is a moderate Republican who succeeded 14-term Rep. Peter King in Long Island’s 2nd congressional district in 2021. During the Biden administration, he voted for Biden’s Infrastructure Investment and Jobs Act and against the IRA.
Garbarino told E&E News, “We have 20-plus members saying, ‘Don’t just think you can repeal these things and have our support.’” The letter notes, “Countless American companies are utilizing sector-wide energy tax credits – many of which have enjoyed broad support in Congress – to make major investments in domestic energy production and infrastructure for traditional and renewable energy sources alike. Both our constituencies and the energy industry alike remain concerned about disruptive changes to our nation’s energy tax structure.”
There is also past support for the IRA tax subsidies within the administration. Interior Secretary Doug Burgum (and putative Trump “energy czar,” whatever that means), when he was North Dakota Republican governor, was a strong supporter of carbon dioxide capture and storage. Bismark-based Basin Electric Power Cooperative provides power to 3 million customers in nine states. It’s elderly, 705-MW lignite-fired Milton R. Young power plant hopes to keep running by capturing carbon and storing it underground onsite. Basin is also building some 1,500-MW of solar capacity, relying on the IRA tax credits.
Utility Dive reported that Todd Brickhouse, Basin CEO and general manager, told the House Energy and Commerce Committee’s energy subcommittee Mar. 5, “The immediate removal of [the production tax credit] will not allow utilities to plan for and avoid increased costs, and this will also immediately harm ratepayers.” At that meeting, Rep. Mariannette Miller-Meeks (R-Idaho) testified, “Tax incentives like the tech-neutral clean energy credits under [sections] 45Y and 45E, and the 45Q carbon sequestration credit, and the 45X advanced manufacturing credit aim to strengthen American manufacturing capability and reduce the engineering procurement and construction risks that have plagued major energy projects.” She was a signatory on the Garbarino letter.
There are also recent technical studies that argue for the IRA tax credits. Veteran economic consultancy NERA’s Feb. 10 analysis, “Electricity Price Impacts of Technology-Neutral Tax Incentives With Incremental Electricity Demand from Data Centers,” concluded that the IRA tax incentives have “the effect of reducing delivered electricity prices to the ratepayers.” NERA found, “The lack of technology-neutral tax incentives has the effect of increasing the electricity prices in both cost-ofservice and competitive regions as electricity demand must be met by relatively more expensive generating technologies.”
Killing the IRA tax subsidies, NERA found, would have differing regional impacts: “North Central and West regions are projected to see the highest increase in the average delivered electricity prices in the absence of the technology-neutral tax incentives.” The biggest price hikes by 2029 would occur in 15 states: WY, IL, NM, NC, TN, MD, NJ, DE, MO, SC, AZ, MN, WA, AR, and NE. “The increase in average U.S. all-sector delivered electricity prices ranges from 0.4% (0.1¢/kWh* ) to 29.5% (2.6¢/kWh) in 2026 and 1.1% (0.3¢/kWh) to 29.2% (2.7¢/kWh) in 2029 without the technology-neutral tax incentives.”
A February report by The Brattle Group – “A Wide Array of Resources is Needed to Meet Growing U.S. Energy Demand” – found, “Elimination of clean energy credits would raise customer rates, reduce economic growth and eliminate jobs.”
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