Coal, nuclear lobbyists set to pitch $70B tax credit
The nuclear and coal industries are quietly crafting legislative pleas for tens of billions of dollars in new tax credits — an aggressive move that builds on the Trump administration’s ongoing quest for policy relief.
Lobbyists and private energy companies are working on two separate pieces of legislation that call for up to $4.8 billion for existing nuclear reactors and $60.5 billion for existing coal plants, industries that have been undercut in recent years by a booming shale revolution and waning demand for electricity.
The two bills — being crafted and pitched separately from one another — would serve as a “bridge” for struggling nuclear and coal plants until Energy Secretary Rick Perry’s request for new policy materializes at the Federal Energy Regulatory Commission, said David Brown, senior vice president of government affairs for Exelon Corp., the nation’s largest reactor operator. Axios first reported on the effort.
“While we continue to pursue things at FERC and in the states and in the regions, we’ve come up with an idea for an investment tax credit for nuclear that would largely mirror the solar provisions,” Brown said.
The pro-nuclear language would provide a 30 percent investment tax credit for capital expenditures at existing reactors worth up to $1.2 billion annually in new incentives over the next four years, Brown said.
A separate measure focused on coal would grant existing plant operators that meet mercury and other clean air requirements the ability to recoup some of their operational and maintenance expenses — up to a limit of $26 per kilowatt of installed capacity, said Paul Bailey, president and CEO of the American Coalition for Clean Coal Electricity.
For the coal industry, that would mean a potential windfall of up to $6.5 billion annually over a 10-year period — an effort also being pushed by coal producers Peabody Energy Corp. and Arch Coal Inc. and utility American Electric Power Co. Inc., Bailey said.
The total bill for both coal and nuclear: almost $70 billion.
The industry effort to secure financial lifelines may face tough odds on Capitol Hill following a tax reform blitz at the year’s end.
Neither measure has an announced sponsor just yet, although Brown signaled that the nuclear language has already attracted one specific senator and a number of House lawmakers.
Even so, Brown and Bailey, energized by the Trump administration’s full-throated support for nuclear and coal-fired generation, said they’re actively reaching out to lawmakers in both chambers and eager to see language passed by the year’s end.
One potential platform could be a tax extenders package, said Bailey (E&E Daily, Dec. 4).
Central to the legislative push is providing a larger safety net for struggling nuclear and coal plants. Bailey, for example, said new FERC policy could directly benefit a maximum of about 40,000 megawatts of coal-fired generation in the Midwest and Mid-Atlantic, while a wave of new tax credits would benefit 240,000 MW of coal-fired generation across the nation.
“We have a third of the coal fleet that has retired or will retire, and we have DOE, NERC and others concerned about coal retirements, and this would help prevent coal retirements,” Bailey said. “It’s complementary to what FERC is doing.”