The bill creates an investment tax credit to boost construction of significant transmission projects across the nation
WASHINGTON - U.S. Senator Martin Heinrich (D-N.M.), a member of the Senate Energy and Natural Resources Committee, introduced legislation to incentivize the construction of new electric transmission infrastructure to meet our decarbonization goals and support the energy transition, while building the clean energy workforce of tomorrow. U.S. Representative Steven Horsford (D-Nev.) will introduce companion legislation in the House.
The Grid Resiliency Tax Credit Act will provide a targeted 30% investment tax credit (ITC) to support investments in large-scale transmission projects and grid enhancing technologies that help to provide consumers with more affordable and reliable electricity.
“To meet our nation’s full potential as a global leader in the clean energy transition and to replace rapidly aging electric infrastructure, we are going to need to invest in building many more transmission lines,” said Heinrich. Over the last decade and a half, tax incentives have sent a powerful signal to private investors to put their capital behind new wind and solar projects. We need to send a similarly strong and long-term financial signal that it is worth the time and effort it takes to steer massive transmission infrastructure projects all the way from planning to construction.”
The targeted approach in the Grid Resiliency Tax Credit Act would incentivize regionally-significant transmission projects and critical transmission subcomponents and grid-enhancing technologies while avoiding incentives for smaller local transmission projects or routine asset replacements.
Overhead, underground, or offshore transmission projects that would qualify for the Grid Resiliency Tax Credit include:
The Grid Resiliency Tax Credit Act would provide a 10-year tax credit. Starting in 2024, all qualifying transmission projects that are placed in service would qualify for the credit and any qualifying project that starts construction before the end of 2033 could claim the credit. Further, taxpayers would be able to monetize the credit under the Inflation Reduction Act’s new tax-credit transferability provisions.
The American Council on Renewable Energy projects that a 30% investment tax credit for regionally-significant transmission projects would add enough new capacity to the grid to integrate an additional 30,000 megawatts of new renewable energy generation. New transmission lines supported by the tax credit would also create over 650,000 clean energy jobs, deploy more than $15 billion in private capital investment, and provide American consumers with $2.3 billion in energy cost savings.
Additional Background on Grid Resiliency Tax Credit Act:
Full Bill Text of Grid Resiliency Tax Credit Act here.
Fact Sheet for Grid Resiliency Tax Credit Act here.
Endorser Quotes for Grid Resiliency Tax Credit Act here.