ICYMI: Bloomberg Law: "Energy Industry Warns Projects in Danger if GOP Debt Bill Moves"

Today, Bloomberg Law highlighted how extreme MAGA House Republicans are trying to offshore good-paying jobs and reverse the clean energy manufacturing boom unleashed by President Biden's Investing in America Agenda. Bloomberg Law reports that Speaker McCarthy's bill would "repeal many of the clean energy tax credits enacted by the Inflation Reduction Act" that are driving tens of billions of dollars in private sector clean energy investments, "which benefit Republican as well as Democratic districts" across the country.

Jason Grumet, CEO of the American Clean Power Association warned that the Republican bill "would jeopardize these investments and thousands of good-paying American jobs." He added, "Congress should not waste time or energy on political messaging bills that do not advance the national interest."

President Biden's Investing in America Agenda is boosting our nation's competitiveness, lowering energy costs, and creating jobs in clean energy industries. Meanwhile, MAGA house Republicans are trying to create "retroactive tax increases" by repealing pieces of the President's agenda that have already spurred massive investments and job creation in their own districts. If accomplished, their plan would also slash funding for manufacturing and innovation, and ship jobs overseas.

Read full piece below:

Bloomberg Law: Energy Industry Warns Projects in Danger if GOP Debt Bill Moves
[Samantha Handler and Daniel Moore, 4/24/23]

The bipartisan popularity of some clean energy tax credits likely will shield the billions of dollars of clean energy investment around the country as the GOP debt limit proposal threatens to jeopardize those projects, energy industry and tax experts said.

House Republicans' bill that would raise the debt limit and avoid a default on the government also would repeal many of the clean energy tax credits enacted by the Inflation Reduction Act. Tax professionals and energy analysts aren't sounding an alarm just yet—the measure is dead on arrival in the Democratic-controlled Senate and would be vetoed by President Joe Biden.

Even beyond this year, the sheer scale of investments spurred by the 2022 law, which benefit Republican as well as Democratic districts, would make the legislation exceptionally difficult to enact into law, experts said. Still, the bill gives some reason to make investments sooner rather than later.

"I think people are eager to make sure that they do everything they can to make sure that their projects and their cars, their manufacturing facilities, do qualify before there's any change in control in Washington," said Elizabeth Crouse, a partner with K&L Gates.

'Just the Threat'
House Democrats worried the bill would deter companies from claiming the credits, even if there's no chance of Biden signing it into law. Rep. Don Beyer (D-Va.) said a move to reinstate tariffs on some solar panels manufactured in Asia discouraged some production.

This attack on the energy credits might have a similar consequence, Beyer said in a brief hallway interview in the Capitol.

"Just the threat to make those tariffs retroactive had a huge, depressing effect," Beyer said.

Energy trade associations expressed alarm at the proposal.

The energy industry has announced 46 manufacturing facilities and scores of clean energy projects in communities across the country, Jason Grumet, CEO of the the American Clean Power Association, said in a statement.

The trade association, which advocates for more than 750 wind, solar, storage, and other energy companies, estimated last week the IRA has spurred $150 billion in investment that would create 18,000 jobs and build 96,000 megawatts of clean power generating capacity.

If enacted, the Republican bill "would jeopardize these investments and thousands of good-paying American jobs," Grumet said. "Congress should not waste time or energy on political messaging bills that do not advance the national interest."

What's Realistic
Clawing back the tax credits is a tough sell even for some Senate Republicans. The popularity of some of the credits on the chopping block makes it unlikely the current proposal would be signed into law if the GOP gained control of the Senate and the White House in 2024, said Rohit Kumar, a former aide to Minority Leader Mitch McConnell (R-Ky.) and now a principal at PwC.

Sen. Chuck Grassley (R-Iowa), a supporter of biodiesel fuel tax credits, questioned the House GOP proposal to end the tax-and-climate law's two-year extension of the $1-per-gallon biodiesel tax credit.

Grassley told reporters Thursday it wouldn't be "realistic" to get the money back from a biodiesel producer who recently went bankrupt, for example.

"If I run a biodiesel plant and I've got the tax credit, it's already expended and you can't get it back from them," Grassley said.

The credit for carbon dioxide sequestration, nixed under the debt limit bill, is backed by both McConnell and Sen. Sheldon Whitehouse (D-R.I.), Kumar noted. Repealing the credits retroactively in 2025 also would be a heavier lift, as neither party likes to push "retroactive tax increases," he said. The production tax credits for hydrogen and nuclear are both widely popular and repealed in the House GOP measure.

"You get to 2025, now you're talking about significant, billions and billions of dollars of investment perhaps having been made, in reliance on these credits," Kumar said. "Repealing them, especially repealing them retroactively, would just really cut significantly against the grain for both Republicans and Democrats."

Lawyers who work with energy developers are urging caution so far.

"When I look at this with clients, I don't think it's at a stage where I'd be ringing the bell and saying, 'Pay attention to this,'" said John Taylor, a partner in King & Spalding's tax practice who said he was on a call last week with House Republican staff. "It's not at the stage where it should impact investment decisions."

Even if Republicans capture the Senate and White House in elections next year, "you have a lot of people who have invested time and money and have things that are hard for them to stop," Taylor said. "So you have built-in constituencies that are in Republican and Democratic districts."

Raising the debt limit will take precedence for other lawmakers, despite liking some of the provisions. Sen. Thom Tillis (R-N.C.) said while he hasn't decided if he would vote for the House GOP proposal, he'd be "tempted to" if it would avoid a government default.

"Even if this bill had provisions that I'm sympathetic to, that would actually get the debt ceiling lifted, I'd live to fight another day and make sure that we avoid a default," Tillis told reporters by the Senate subway.