Heinrich Highlights Benefits Of Transmission Investment Tax Credit During Virtual Webinar With American Council on Renewable Energy

WASHINGTON – Today, U.S. Senator Martin Heinrich (D-N.M.) participated in a webinar with the American Council on Renewable Energy (ACORE) to outline the benefits of a transmission Investment Tax Credit (ITC). The discussion coincided with the release of a report from ACORE that finds that a targeted tax credit is necessary to incentivize the construction of regionally significant high-voltage transmission infrastructure, and details the job creation, clean energy deployment, and private investment these projects would generate. 

Senator Heinrich recently introduced the Electric Power Infrastructure Improvement Act to improve the resilience of the grid and support new projects that connect modern renewable energy resources to the power demands of regional consumer markets. The bill would create an investment tax credit to help promote construction of regionally significant transmission projects across the nation.

President Joe Biden’s American Jobs Plan also includes a targeted investment tax credit that incentivizes the buildout of high-voltage capacity power lines and mobilizes tens of billions in private capital off the sidelines – right away.

According to ACORE’s analysis, which was produced in collaboration with Grid Strategies and provides weighted averages based on a project’s odds of success, a transmission ITC would create upwards of 650,000 good-paying jobs, enable an additional 30,000 megawatts of renewable energy capacity, spur more than $15 billion in private capital investment in the near term, and provide $2.3 billion in energy cost savings for the lower 80% of income brackets. 

Senator Heinrich’s remarks as prepared for delivery are below.

Hi everyone.

Thank you so much for inviting me to share a few words with you about one of my favorite topics. 

In fact, I was nerding out on transmission long before it was cool!

As some of you may know, in addition to being one of a handful of people in Congress with a background in engineering, I also describe myself as a utility brat. 

My father was an IBEW utility lineman.

And I still remember hanging around his office after school drawing pictures of Reddy Kilowatt.

Today, I’m excited to be part of this discussion on the urgent need to expand and upgrade our high-voltage transmission infrastructure.

We all know that we need to confront the climate crisis and build a strong clean energy economy in America.

To meet our carbon emission requirements quickly enough to prevent global warming from exceeding 1.5 degrees C, we need to transition our entire electricity sector toward clean and carbon pollution-free energy. 

And we need to do it quickly.

We also need to replace most of what we currently use combustion for, with electrified alternatives that will run on even more clean and pollution-free power. 

The good news is that we already have the technologies to make this transition.

And the United States is lucky to possess some the best wind and solar resources in the entire world—including in my state of New Mexico. 

As we develop these resources and make our country a world leader in the clean energy economy, we can meet our emissions requirements and create millions of good-paying jobs. 

But the missing link to achieving America’s full potential as a clean energy producer—and the current limiting factor standing in the way of making this vision a reality—is our need to build more transmission lines. 

The original electrification of the contiguous United States was perhaps the greatest engineering achievement of the 20th century.

But it shouldn’t take extreme winter storms in Texas for us to see that our transmission infrastructure and electrical grid is in desperate need of an overhaul. 

Beyond just climate considerations, many of the components making up America’s bulk-power system are nearing the end of their service life.

Our current transmission infrastructure also reflects an old way of doing things in the electricity sector.

In that system, utilities primarily delivered power to our homes and businesses from their central generation sites like coal-fired and hydroelectric power plants. 

The locations of those central generation facilities do not typically align with the places with the best wind and solar resources.

We are going to need to build new transmission lines to connect the dots between those places with the greatest clean energy potential and the major energy markets that are hungry for cleaner and more affordable power. 

Only once we can site and build these new transmission lines can we truly rewrite the map of our energy landscape and bring many, many more massive-scale clean energy projects onto the grid. 

Recent studies from MIT, the National Academy of Sciences, and DOE’s National Labs, have shown that we need to at least double – and more likely triple – our country’s transmission capacity in order to achieve our climate objectives by 2035.

President Biden said in his address to Congress last month that climate action and our transition to a clean energy economy is about jobs, jobs, jobs. 

The president is absolutely right.

We can and should create millions of new good-paying jobs building up our clean energy economy.

To do that, Congress needs to take up the ambitious clean energy policies that the president has laid out in his American Jobs Plan.

I am thrilled that the American Jobs Plan includes not just investments to promote clean energy development, but also investments in the transmission infrastructure needed to integrate and fully benefit from that development. 

I was especially pleased that the president included a proposal that I introduced in the Senate to establish an investment tax credit for regional transmission projects. 

Inadequate transmission capacity is hindering our ability to integrate significant amounts of renewable energy into the grid – and that problem is only going to worsen. 

Because of all of the lands and jurisdictional lines that they cross, siting each new transmission line can take years—and in some cases, decades—of hard work and determination. 

The ten years required, on average, to plan and permit transmission means we have no time to waste.

We need to act now.

Tax incentives such as the renewable energy tax credits have proven to be an effective signal to investors.

They’ve fueled the incredible growth in both the wind and solar energy industries that we’ve witnessed over the last decade.

These same types of incentives can promote building the transmission that we know we need to support a modern, clean electric grid.

The new report that ACORE released today finds that a targeted investment tax credit for transmission would:

• Create an estimated 650,000 good-paying jobs,
• Enable us to build an additional 30,000 megawatts of new renewable energy capacity,
• Spur more than $15 billion in private capital investment in the near term,
• And provide American households in the lower 80 percent of income brackets with $2.3 billion in energy cost savings.

Private capital is available to invest in these projects.

But we need to pass an investment tax credit to signal to investors that it really is worth all the effort it takes to get these projects from planning to construction. 

On that note, we need to greatly improve coordination among states and regional entities on transmission planning.

I just introduced legislation to direct the Federal Energy Regulatory Commission to improve its interregional transmission planning process.

And I am really excited that President Biden also included in his American Jobs Plan a proposal to establish a new Grid Authority Office at the Department of Energy. 

This new office would be directed to leverage existing rights-of-way such as roads and railways and support creative financing tools to help site new high-priority transmission lines. 

In New Mexico, we wisely created a Renewable Energy Transmission Authority years ago to help navigate the obstacles that stand in the way of siting a new transmission line’s route. 

It’s past time for us to take a similar, comprehensive planning approach in all of our states, and at the regional and national level.

We also need to work with leaders at both the state and local levels to remove regulatory barriers and outdated permitting rules that have created unnecessary hurdles for new transmission. 

I’d also argue that we really need to start thinking big on concepts like a Macro Grid that connects our entire country together.

Of course, building up this amount of new transmission infrastructure will be a massive undertaking and require major investment.

But we’ve seen these kinds of transformational, systemic investments in infrastructure pay major long-term dividends.

The interstate highway system has paid for itself more than six times over in economic benefits.

We’ve benefitted from widespread electrification, clean water systems, and more recently the deployment of broadband internet networks.

You can see just one example of the economic return on investment that new transmission can create in Pattern Energy’s Western Spirit Transmission Line, which broke ground in New Mexico earlier this year. 

Once it comes online, Western Spirit will allow New Mexico’s already booming wind industry to grow by leaps and bounds.

The new transmission line will allow Pattern to build and connect four new utility-scale wind projects in rural communities in the central and eastern parts of our state. 

Once they are built, these four new projects in New Mexico will combine to make up the largest single-phase wind development in American history—all thanks to just one new transmission line. 

During its construction, Western Spirit will create an estimated 1,000 jobs in our state.

And it will support dozens of high-paying, permanent careers in our rural communities.

Careers like my father’s.

The wages and benefits my dad earned by maintaining power lines and keeping our community’s lights on put me and my sister through college.

His career as a lineman provided our family with a ticket to the middle class.

With President Biden’s American Jobs Plan—and with a Democratic House and Senate—we have a once-in-a-generation opportunity to create that same type of good-paying career path for millions of Americans and finally meet the moment on climate.

We will make our grid more reliable and our homes more resilient.

We will improve everyone's quality of life, rebuild a strong economy in every part of our country, and save the future of our planet.

We can’t afford to let this opportunity pass us by.

Thank you.