Illustration: Aïda Amer/Axios
Senate Republicans proposed giving nuclear and geothermal energy developers more time to claim IRA energy credits in draft text released Monday.
Why it matters: The Senate Finance Committee's portion of the reconciliation bill sets up difficult bargaining with hard-liners in both chambers who seek deeper cuts to the Democrats' 2022 climate-and-tax law.
- The carveouts are intended to retain a phaseout for wind and solar while giving other, more nascent technologies — which Republicans favor — a shot at the incentives.
Zoom in: The committee's text lengthens the phaseout period for the electricity investment and production tax credits for nuclear and geothermal projects that start construction as late as 2035.
- Those projects can receive full credit if they start construction by 2033 or earlier. They would get 75% of the credit value if they start construction in 2034 and 50% of the value starting in 2035.
- Tax credits would be phased out for wind or solar projects that begin construction by 2028 — with 60% of the credits value available in 2026 and 20% of the credit's value in 2027.
The hydrogen production tax credit would phase out by the end of 2025, matching the House version.
- That marks a defeat for hydrogen supporters, which include oil and gas lobbyists who had pressed for a longer runway.
Between the lines: The text reflects the influence of many of the Senate's IRA-friendly Republicans, including Lisa Murkowski, Thom Tillis, John Curtis and Jerry Moran.
- The Senate Finance text also would loosen some anti-China rules by narrowing the scope of what would be blocked from claiming the credits.
- Sens. Bill Cassidy and Steve Daines were working on making the "foreign entity of concern" rules more workable, Axios reported last week.
- Hard-liners calling for IRA repeal include Senate ENR Chairman Mike Lee and Finance member Ron Johnson.
Yes, but: The bill will ultimately have to get enough votes in the House, where Freedom Caucus members and fiscal hawks dominated the negotiations last month.
What they're saying: "This is a 20-pound sledgehammer swung at clean energy," Jackie Wong, NRDC's senior vice president for climate and energy, said in a statement. "It would mean higher energy prices, lost manufacturing jobs, shuttered factories, and a worsening climate crisis."
What's next: Finance Chair Mike Crapo is expected to brief senators tonight on the text and hash out final details this week.
- The provisions of the Senate reconciliation package must clear the parliamentarian.
- The bill would have to be brought to the floor next week for Republicans to meet their July 4 deadline.
