Major US energy legislation nears House vote, would boost renewables deployment

The US House is poised to vote on the most significant clean energy and infrastructure package in the history of Congress as soon as Nov. 4, Representative Kathy Castor said Nov. 3, with power industry participants highlighting renewable energy tax credit extensions as a major piece of the legislation.

"On the bipartisan infrastructure bill and Build Back Better Act ... it looks like we are ready to go, and I think we will probably be looking at a vote [in the House] on Thursday," Castor, Democrat – Florida, and a member of the Energy and Commerce Committee and chair of the Select Committee on the Climate Crisis, said during the remotely held American Council on Renewable Energy Grid Forum.

The most recent Intergovernmental Panel on Climate Change report showed that there is no time to waste in decarbonizing the entire economy and that the "power sector is the lynchpin" critical to electrifying vehicles, cleaning up buildings and becoming more resilient, Castor said.

The legislation currently being negotiated in Congress contains "very important pieces for electrification and clean energy," including robust investments in tax credits that are important for the power sector and the whole clean energy landscape, she said.

The legislation also includes rebates for consumers to purchase clean energy, clean vehicles, electric appliances, along with a clean energy accelerator and investment in a civilian climate corps, Castor said.

If the IPCC report was not enough of a "wakeup call" for lawmakers, then election day should have been with a Democrat losing the governor's race in Virginia and Maine voters deciding against a major power transmission project that would cross their state, she said.

Castor also said it is "unfortunate" the Clean Electricity Performance Program did not survive the legislative process, but there are several pathways to invest those dollars to meet climate goals with some of the money going to "beef up" clean energy tax credits.

It is also "good news" that people are recognizing the power grid is "shaky and outdated" and that it must be modernized to handle increasingly frequent bouts of extreme weather, she said.

Power industry perspectives

Christina Hayes, vice president of Berkshire Hathaway Energy, said during a panel discussion that there are a lot of positive things for renewable energy and power transmission development in the pending legislation, but there is still a "ways to go" on issues like a normalization opt out for the transmission tax credit which could help speed up renewable energy deployment.

Passing the Build Back Better Act could "open the floodgates" to a lot of renewable energy projects that have been caught between uncertain policies and an inflationary environment, Alex Daberko, managing director at power sector investment firm Starwood Energy, said.

Daberko said Starwood sees the feasibility of building renewables and transmission as the biggest challenge. It is not investment demand or public support, but challenges with interconnecting projects to the grid and inflation tariffs that developers must deal with, he said.

Walmart's director of energy services, Steve Chriss, said it is not just about interconnection but driving power deliverability to load as technology in the future can match the time and location of renewable energy consumption and production to allow "real access to renewable energy."

Those kinds of developments will help prevent curtailed resources or negative power pricing, Chriss said.

He also called on utilities to upgrade local distribution grids so they can better handle distributed energy resources and increased customer load as electrification moves forward across Walmart's 5,300 US locations.

The timelines for service upgrades at some locations are up to three years because "the utilities are so backlogged" and ultimately a large power consumer like Walmart expects "electrons, reliability and resilience" from its utilities, Chriss said.

Hayes said that while everything stakeholders wanted did not make it into the legislation, the power sector is a long-haul industry with transmission and resource deployment being an iterative process.

"We don't have to solve all the problems today," she said, and the staged approach to things like tax credits is positive.

The transmission tax credit could help 22 projects get built in the next five or six years, which is "lightning" in transmission development time, Hayes said.

It has gotten harder to develop utility-scale renewable energy projects which take about three years for wind and solar power, Daberko said. Juggling tax policies that change three or four times in that three-year window makes it "hard to keep all the balls in the air which is the key to development," he said.

Big rule changes can also "hit the brakes on deployment" because banks and investors have to fully understand them, but if the legislation passes with the tax credit extensions then 2022 and 2023 could be "monumental" for renewable energy deployment, Daberko said.