The nuclear industry is lobbying to preserve and modify a tax credit that could be worth billions of dollars when new nuclear reactors under construction are placed in service amidst efforts by Republicans to end energy subsidies and an upcoming tax reform process that could place the tax incentive at risk.
The industry’s effort to keep the nuclear production tax credit is leading to criticism as companies such as Exelon Corp. ask Congress not to reinstate a similar tax credit received by the wind energy industry.
The 1.8 cent per kilowatt hour nuclear credit, created by energy legislation enacted in 2005, can be received by companies that started construction on nuclear reactors by January 2014 and are placed in commercial operation by 2021, according to the Internal Revenue Service.
Only two companies—Southern Co. and Scana Corp.—have reactors under construction that could qualify for the credit, which is yet-to-be-used, according to analysts.
Chicago-based Exelon, the largest operator of nuclear reactors in the U.S., is among the leaders of a fight to allow the wind industry’s lucrative 2.3 cent per kilowatt hour tax credit to remain expired and has argued the credit “distorts” competitive wholesale energy markets.
Tyson Slocum, director of the energy program at activist group Public Citizen, called the effort “hypocritical.”
“Subsidies for those guys are terrible and un-American, and subsidies for us are essential for fighting climate change and keeping the lights on,” Slocum said in an interview. “It all comes down to lobbying on self-interest that doesn’t involve consistency. It’s just whatever is in the interest of your particular corporate self interest.”