Murkowski in March. Photo: Kayla Bartkowski/Getty Images
The hydro industry and its Hill allies are hoping to get a long-sought tax credit in the GOP's reconciliation bill mix.
Why it matters: The hydro-specific investment incentive would help dam operators upgrade aging facilities as a large chunk of the existing fleet goes through relicensing in the coming years.
Driving the news: "We're going to push for it because it's so important," Sen. Lisa Murkowski told Axios. "Would I like to see it in reconciliation? Absolutely yes."
- Murkowski's the lead sponsor of the bipartisan Maintaining and Enhancing Hydroelectricity and River Restoration Act, reintroduced late last month.
- It would create a 30% tax credit for safety, fish passage and water quality upgrades at existing dams.
- The industry made a last-ditch push to get the incentive into the IRA in 2022, but it was ultimately left out of the final climate law.
Yes, but: Adding any provision to the reconciliation bill that increases federal deficits is going to be a tough ask.
- Murkowski acknowledged: "As we all know, things are in flux with reconciliation."
- The industry has also sought to protect the IRA tax credits, which remain on the GOP's target list for repeal or modification.
The big picture: Still, as National Hydropower Association CEO Malcolm Woolf puts it, hydro is "a cool kid" again in President Trump's "energy dominance" agenda.
- Woolf said a score on a previous version of the legislation found it would cost less than $1 billion over 10 years — a drop in the bucket relative to the numbers Republicans are talking about right now.
- A spokesperson for Rep. Adrian Smith, the House lead sponsor, said he "continues to build support and work toward passage of his bill" and sees it as "part of an agenda to unleash American energy abundance."
Between the lines: Guidance released by the Biden administration just before leaving office allowed existing dams to qualify for the IRA's lucrative investment tax credits to revamp power generation facilities.
- But that doesn't include the kinds of environmental and safety improvements covered by Murkowski's bill.
- Hundreds of non-federal dams worth 17 gigawatts of power are set to see their licenses expire over the next decade, and many would need those kinds of upgrades to continue operating.
- "Candidly, the next four years are going to be critical for the future of the existing hydropower fleet," Woolf said. "Are they going to decide to relicense these assets … or are they going to surrender their licenses and just go in a different direction?"
