Reps. Pat Harrigan (R., N.C.) and Jimmy Panetta (D., Calif.) are rolling out bipartisan legislation, obtained exclusively by the Washington Reporter, that would fix the broken tax credit rules that they believe have been holding back nuclear energy construction and preventing savings from reaching consumers.
Their bill, the Nuclear Rate Stabilization Act, comes as lawmakers of both parties are working to address cost of living issues for Americans, and the bicoastal, bipartisan pair wants to modernize America’s energy laws.
Under current law, utilities that construct nuclear reactors are eligible for a clean energy investment tax credit of between 30 and 50 percent of construction costs. However, investment tax credit (ITC) normalization rules require that credit to be stretched over the 40-year life of the reactor. The lawmakers argue that this dilutes the ITC’s effectiveness and prevents near-term rate relief from reaching consumers.
Another problem that they want to fix is with the implementation of Qualified Project Expenditure (QPE) credits. Currently, QPEs for nuclear projects cannot be transferred to third parties; this, they argue, leaves utilities sitting on unusable credits and cutting off access to capital that new reactor projects desperately need.
Their Nuclear Rate Stabilization Act fixes these problems by giving nuclear energy projects the same opt-out option from ITC normalization rules that are currently available to battery storage projects and allows QPE credits to be transferred to third parties, unlocking critical capital and making new reactor construction more financially viable.
Harrigan believes that this bill would allow America to “take a meaningful step toward lower energy bills, energy independence, and a stronger American nuclear industrial base.”
“We have the most powerful energy source on earth, zero emissions, reliable baseload power that can run for decades, and we are letting outdated accounting rules strangle it before it gets off the ground,” Harrigan explained to the Reporter. “The Nuclear Rate Stabilization Act makes sure the tax credits Congress already passed actually reach the people they were meant to help, lowers costs for consumers, and gets more reactors built. Nuclear is the future of American energy dominance and it is past time our tax code reflected that.”
Panetta added that “safe and secure nuclear energy has immense potential to slash emissions and lower energy costs for working families, but inefficient tax rules are blocking nuclear construction from reaching its full potential.”
“Our bipartisan bill would update the tax code to ensure that safe and secure nuclear projects can properly utilize clean energy investment tax credits to build reactors in a timely manner, cutting greenhouse gas emissions for our environment and saving consumers money on their electricity bills,” he added. “I’m always glad to work across the aisle when it comes to reducing energy costs and strengthening America’s energy independence.”
The bill from Harrigan and Panetta has already won praise from many in the nuclear industry.
Maria Korsnick, the president and CEO of the Nuclear Energy Institute (NEI), said that her organization “applauds Representatives Harrigan and Panetta for introducing the Nuclear Rate Stabilization Act (NRSA). The bill strengthens existing energy tax credits to support the next generation of reliable, clean nuclear energy. By making nuclear investment tax credits more effective and improving affordability for customers, NRSA will help utilities move forward with new nuclear projects to meet growing energy demand. We urge Congress to act quickly to enact this legislation.”
Similarly, Chris Colbert, the Chairman and CEO, Elementl Power, noted that “the tax policy called for in the bipartisan Nuclear Rate Stabilization Act will help encourage further investment in the construction of new nuclear energy projects, accelerating the benefits these projects can deliver to our nation. Elementl Power looks forward to working with Congress and our partners to advance this legislation.”