Tax Extenders will Make Plant Vogtle More Affordable

Photo of Vogtle Unit 3 in December 2017
Photo of Vogtle Unit 3 in December 2017

Dr. Marilyn A. Brown
Regents and Brook Byers Professor
Climate and Energy Policy Lab
Georgia Institute of Technology

On Friday, January 9, 2018, Congress passed and President Trump signed the Bipartisan Budget Act of 2018. This budget-busting bill will add an estimated $2 trillion to the U.S. debt over the next decade. But nestled within it is some good news for advocates of low-carbon energy solutions.

At the last-minute, a collection of energy tax extenders and incentives was added to the Congressional budget deal. They will support a variety of “green” technologies that were left out of the Republican tax overhaul at the end of last year – a set of so-called “orphans.” These include 30% investment tax credits for fiber-optic solar, solar water heating, groundwater geothermal heating, geothermal heat pumps, qualified fuel cells, and small wind energy. Smaller, 10% investment tax credits were extended for particular types of microturbines, combined heat and power systems, and thermal energy projects. Support has also been extended for energy-efficient new buildings, and lots more.

But particularly key to Georgia, the Bipartisan Budget Act also extends production tax credits for new nuclear power, which will make Plant Vogtle more affordable. Once the plant is up and running, it will receive a $0.018/kWh production tax credit. Before the Act was passed, these credits applied to new nuclear units placed into service by December 31, 2020 – too soon for Southern Co.'s new Vogtle units to qualify for them. With this Act, the deadline for completion of new nuclear units to qualify for the tax credits has been eliminated for up to 6,000 MW of new nuclear capacity. Thus, they can now be used by Plant Vogtle, the only nuclear energy project under construction in the U.S. today.

By eliminating the construction deadline, Southern Company will be able to qualify for an estimated $2 billion in incentives to expand its Vogtle plant. Oglethorpe Power Corporation, the Municipal Electric Authority of Georgia, and the City of Dalton are partners in the Vogtle project and so will also benefit significantly from the Bipartisan Budget Act of 2018.

Kudos and a tip-of-the-cap to Senator Johnny Isakson and the bipartisan Georgia Congressional delegation.