S&P Global Market Intelligence:



A new bill in the U.S. House of Representatives would provide a temporary tax credit for existing coal-fired power plants, with the goal of slowing a rising tide of retirements for generating units running on the fuel.

The legislation comes after the Federal Energy Regulatory Commission rejected a proposed rule from the U.S. Department of Energy that requested full cost recovery for certain coal-fired and nuclear plants in wholesale markets to bolster grid reliability. FERC dismissed the DOE’s request, saying the department had not shown the need for such a rule, but coal power supporters have pursued other avenues for protecting the existing fleet.

The bill would provide a tax credit equal to $13/kW of a qualifying coal plant’s output or 30% of the plant’s operation and maintenance expenses, whichever is lower. Units that qualify for the credit must use coal to produce at least 75% of their electricity. The bill would also allow eligible project partners, including companies that operate or maintain qualifying units or provide financing for the construction and operation of the unit, to transfer the tax credits to electric cooperatives and other power-producing entities that do not pay taxes.

Bucshon said the bill, which would provide credits for tax years 2018 through 2022, would help avoid more coal-fired plant retirements.



More ($): New US House bill seeks tax credits for existing coal plants