On May 26, the Senate Finance Committee voted to advance legislation that would amend certain energy tax provisions in an effort to combat climate change, curtail greenhouse gas emissions, and create jobs. The bill, known as the Clean Energy for America Act, would provide an “emissions-based, technology-neutral tax credit” for facilities with zero or net negative emissions as well as certain energy storage facilities and high-capacity transmission lines. The bill includes several provisions that would benefit hydropower facilities, including an extension of the production tax credit through the end of 2022, which will encourage new hydropower development and a provision that would make pumped storage hydroelectric facilities eligible for the investment tax credit. It would also include tax credits to encourage environmental, safety, and efficiency improvements at existing hydropower facilities and to remove dams that have reached the end of their useful life.
In a statement, the National Hydropower Association said that it “applauds Senate Finance Chairman Ron Wyden (D-OR) and Senator Maria Cantwell (D-WA) for their commitment to continue working to include innovative tax credits to support upgrades at existing hydropower facilities and the removal of obsolete dams,” and that the bill “will play a pivotal role in achieving President Biden’s goal of a zero-carbon electricity grid.”
In addition to the provisions to benefit hydroelectric facilities, the bill would also provide incentives for electric vehicles, domestic production of clean transportation fuel, and performance-based tax incentives for energy efficient homes and commercial buildings.