CEO’s Report: Federal actions affecting public power

There has been a flurry of action taken recently at the federal level. Many of the bills introduced or signed will have an impact on public power utilities.

Inflation Reduction Act

On August 16, President Biden signed into law the Inflation Reduction Act (IRA), which authorizes $369 billion in funding for climate change-related and clean energy initiatives.

The legislation includes a wide range of incentives and tax credits for clean energy, electric vehicles, and nuclear power, among other things.

One thing of note is that the IRA will extend and expand various energy tax incentives and give public power utilities direct access to such credits through a refundable direct payment credit.

Because public power utilities are tax-exempt entities, they have not been able to take advantage of such incentives. Therefore, the tax code was not able to be used to incentive energy investments for a large number of utilities in the country.

Typically, public power utilities have entered into purchase power agreements with third party developers. Those developers are able to utilize tax incentives to further incentivize their investments.

The IRA allows tax-exempt utilities to claim energy tax credits directly. American Public Power Association has long supported this endeavor and advocated for its implementation.

The IRA includes numerous other provisions that could potentially impact public power. The program is designed to counteract the impact of record-high inflation on the clean-energy sector.

APPA is hosting a free webinar on September 27 regarding public power and the tax provisions of the IRA. This webinar will provide an overview of provisions of particular interest to public power including the extension and expansion of the current investment and production tax credits, a new “Clean Energy” tax credit, credits for carbon capture and sequestration and existing nuclear power, and various credits of interest to public power customers.

For more information and to register, click here.

Heartland Energy is working with APPA, as well as our federal lobbyists, Bockorny Group, to keep tabs on any programs our public power customers may be eligible for under the IRA. 

Addressing supply chain challenges

Electric utilities across the U.S. are struggling to receive ordered electric grid products in a timely manner, particularly transformers. Delays caused by international supply chain backlogs are resulting in low stockpiles for new developments and replacement equipment.

U.S. Senator Marco Rubio (R-Fla.) recently introduced a bill that would establish an energy grid product manufacturing loan program at the U.S. Department of Energy to expand domestic production.

The new loan program would be fully paid for by the rescission of unused appropriations, as recommended by the Government Accountability Office.

This program would finance $8 billion in loan guarantees for the re-equipping, expansion, or establishment of domestic energy grid product and component manufacturing facilities in the U.S.  

Cybersecurity for rural and municipal utilities

The Office of Cybsersecurity, Energy Security and Emergency Response (CESER) is hosting three listening sessions to inform the development of their Rural and Municipal Utility Advanced Cybersecurity Grant and Technical Assistance Program (RMUC).

The goal of the program is to enhance the security of rural, municipal utilities and improve their ability to protect against, detect, respond to or recover from a cybersecurity threat.

The RMUC program will prioritize investments in eligible utilities that meet one or more of the following criterial:

• Have limited cybersecurity resources
• Own assets critical to the reliability of the bulk-power system
• Own defense critical electric infrastructure

Information gathered during the listening sessions will help determine outreach and engagement strategies to ensure all eligible entities are aware of program opportunities. It will also help shape program priorities, goals, design and implementation strategies.

A listening session focusing on the unique needs of electric municipal utilities and their key priorities is being held Thursday, September 29 at 2:00 central time.

Anyone involved in running rural municipal utilities and their stakeholders are encouraged to participate. More information can be found here.