Electric cooperatives marked a huge victory in August when Congress passed a sweeping budget bill that included, for the first time ever, direct-pay tax credits they can use to deploy new energy technologies. But the work isn’t stopping there.
NRECA is meeting with top officials at multiple federal agencies that are responsible for writing the rules to put the Inflation Reduction Act’s provisions into effect.
“NRECA is focused on ensuring that the agencies tasked with implementing these measures get the details right,” said Ashley Slater, NRECA’s vice president of regulatory affairs.
NRECA CEO Jim Matheson last week participated in a virtual roundtable on implementation issues with Treasury Secretary Janet Yellen. To reinforce Matheson’s comments with the secretary, NRECA staff met with the Department of Treasury’s Office of Tax Policy to discuss implementation of a provision that gives direct federal payments to co-ops when they deploy technologies such as carbon capture, nuclear energy, energy storage, renewables and more.
The Treasury Department has limited experience with electric co-ops since co-ops are not-for-profit and most don’t pay federal income taxes. In the past, energy tax credits were only available to for-profit utilities.
“We’re ensuring that Treasury understands electric cooperatives and our business model,” Slater said. “We spend a lot of time talking to agency decision-makers about our governance structure and our not-for-profit status so agency rules are structured with cooperatives in mind.”
NRECA is pushing for a simple, streamlined regulatory process and a user-friendly tax filing form to maximize participation in the direct-pay incentives program by interested members, she said.
The association has also reached out to John Podesta, senior adviser to President Joe Biden for clean energy innovation and implementation, to ensure that electric co-ops get access to the direct-pay credits to ease their transition to clean energy.
“When it comes to executive branch implementation of federal programs that impact co-ops, it’s about getting into the White House and relevant federal agencies and having conversations and making connections, just like we do with elected officials on Capitol Hill,” Slater said.
NRECA is also talking with the Department of Agriculture’s Rural Utilities Service about a voluntary program that offers $9.7 billion in grants and loans designed specifically for electric co-ops that buy or build new clean energy systems.
The program will be administered by the USDA and provide funding for a wide range of projects, including renewable energy, carbon capture, battery storage, nuclear power and improvements to generation and transmission efficiency.
Matheson recently met with Andy Berke, the newly appointed RUS administrator. Berke knows co-ops well, having previously served as a special representative for broadband at the National Telecommunications and Information Administration and representing co-op members while serving in the Tennessee state Senate.
“Our message is that this program must prioritize the long-term resiliency, reliability and affordability of electric systems,” Slater said.
“We told them they should establish an implementation approach that enables co-ops of all sizes to participate in the program if they choose to,” she said. “We have big generation and transmission co-ops and small distribution co-ops, and we want to make sure that this is a program that all interested co-ops can access.”
NRECA will keep in close contact with interested co-ops on both direct-pay incentives and the USDA clean energy program, Slater said.
“We’re going to be communicating constantly as these programs evolve,” she said.