Pascrell and Beyer Lead 36 House Members Calling on Treasury Department to Help Accelerate Clean Offshore Wind Energy Projects
Pascrell and Beyer Lead 36 House Members Calling on Treasury Department to Help Accelerate Clean Offshore Wind Energy Projects
WASHINGTON, DC – Congressman Bill Pascrell, Jr. (D-NJ-09) and Congressman Don Beyer (D-VA-08) today led 36 House members calling for federal guidance supporting offshore wind energy projects to facilitate the accelerated growth of clean and safe energy. The members wrote to U.S. Treasury Secretary Janet Yellen pushing her to issue guidance clarifying that the entirety of an offshore wind project, including onshore transformers and project substations, is fully eligible for the Investment Tax Credit (ITC).
“If we are to meet the Administration’s goal to have 30 gigawatts of offshore wind projects in operation off the United States’ coasts by 2030, we need to ensure that current offshore wind projects move forward without delay. The ITC for offshore wind is one of the most important tools the Administration has to accomplish this crucial objective. The ITC, coupled with other powerful new incentives in the Inflation Reduction Act…has the potential to create millions of new jobs in our domestic manufacturing and energy sectors,” the members write the Treasury Secretary.
Congress identified offshore wind as separately eligible for the ITC as part of the Consolidated Appropriations Act of 2021. The legislation established a new 30% ITC to incentivize the domestic offshore wind industry. However, the law did not define the assets that were eligible for this new credit. The members seek guidance clarifying that offshore wind developers can treat assets leading up to, and including, the onshore transformer and project substation as qualifying for purposes of claiming the investment tax credit.
The letter is signed by Reps. Pascrell, Don Beyer (D-VA), Jake Auchincloss (D-MA), Nanette Barragan (D-CA), Suzanne Bonamici (D-OR), Shontel Brown (D-OH), Andre Carson (D-IN), Sean Casten (D-IL), Troy Carter (D-LA), Yvette Clarke (D-NY), Emanuel Cleaver (D-MO), Mark DeSaulnier (D-CA), Adriano Espaillat (D-NY), Dan Goldman (D-NY), Jim Himes (D-CT), Jared Huffman (D-CA), Sheila Jackson Lee (D-TX), Bill Keating (D-MA), Ro Khanna (D-CA), Andy Kim (D-NJ), Ann Kuster (D-NH), Summer Lee (D-PA), Seth Magaziner (D-RI), Rob Menendez (D-NJ), Jerrold Nadler (D-NY), Donald Norcross (D-NJ), Frank Pallone, Jr. (D-NJ), Jimmy Panetta (D-CA), Donald Payne, Jr. (D-NJ), Scott Peter (D-CA), Deborah Ross (D-NC), Andrea Salinas (D-OR), Mikie Sherrill (D-NJ), Rashida Tlaib (D-MI), Paul Tonko (D-NY), and Bonnie Watson Coleman (D-NJ).
Pascrell has consistently championed offshore wind development to create jobs, meet our nation’s clean energy goals, and combat climate change. Pascrell was the longtime lead sponsor of the Incentivizing Offshore Wind Power Act (H.R. 4887; 116th Congress) to extend the investment tax credit for offshore wind development, which was enacted into law in the Consolidated Appropriations Act of 2021. The Inflation Reduction Act of 2022 included a new Advanced Manufacturing Production Tax Credit for certain offshore wind components modeled off of Pascrell’s Offshore Wind American Manufacturing Act (H.R. 7388; 117th Congress).
On February 12, 2021, Pascrell co-led a bipartisan letter requesting the Bureau of Ocean Energy Management (BOEM) designate a new priority Wind Energy Area in the New York Bight to clear the way for offshore wind development off the coasts of New Jersey and New York. On March 29, 2021, Pascrell praised action by the Biden administration making the requested wind development area designations for New Jersey and New York. On January 14, 2022, Pascrell led all Democratic members of the New Jersey congressional delegation in a letter to BOEM in support of constructing two offshore wind energy generation projects off the Garden State coast.
The text of the members’ letter in support of growing clean offshore wind energy is below.
April 20, 2023
Dear Secretary Yellen:
We write to ask that the Department provide necessary guidance, as soon as practicable, to clarify that offshore wind developers can treat assets leading up to, and including, the onshore transformer and project substation as qualifying for purposes of claiming the investment tax credit (“ITC”). Guidance on this definition is critically important for clarity as near-term offshore wind projects advance.
Realizing the importance of offshore wind as a domestic energy source, Congress identified offshore wind as separately eligible for the ITC as part of the Consolidated Appropriations Act of 2021 (“Act”). The law enacted a new 30% ITC to incentivize our domestic offshore wind industry but did not define the assets that were eligible for this new credit. Instead, Congress relied on existing regulations and guidance that pre-dated the specific identification of offshore wind in the Act to assist taxpayers in determining qualifying assets.
Since then, there has been a consistent demand for guidance clarifying that the entirety of an offshore project is eligible for the ITC. This definition is consistent with the intent of Congress, and the Bluebook released by the Joint Committee on Taxation, JCS-1-22, contained language identifying that subsea cables and voltage transformers are necessary properties to condition electricity for the grid.[1] On January 24, 2023, a report on offshore wind transmission issued in collaboration with clean energy advocates, academic experts, state regulatory officials, and industry stakeholders recommended that the Internal Revenue Service provide guidance within the next 90 days to confirm the applicability of the ITC to offshore wind-related interconnection facilities.[2]
If we are to meet the Administration’s goal to have 30 gigawatts of offshore wind projects in operation off the United States’ coasts by 2030, we need to ensure that current offshore wind projects move forward without delay. The ITC for offshore wind is one of the most important tools the Administration has to accomplish this crucial objective. The ITC, coupled with other powerful new incentives in the Inflation Reduction Act of 2022 (“IRA”) such as the domestic content bonus credit and advanced manufacturing tax credit, has the potential to create millions of new jobs in our domestic manufacturing and energy sectors.
We appreciate that issuing the extensive guidance necessary to implement the IRA is a priority for the Department. However, there has been a need for ITC guidance since well before its passage. We urge you to prioritize the issuance of ITC guidance expeditiously.
Sincerely,
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[1] The Joint Committee on Taxation, General Explanation Of Tax Legislation Enacted In The 116th Congress (March 8, 2022), https://www.jct.gov/publications/2022/jcs-1-22/
[2] The Brattle Group, The Benefit and Urgency of Planned Offshore Transmission (January 24, 2023), https://www.brattle.com/wp-content/uploads/2023/01/Brattle-OSW-Transmission-Report_Jan-24-2023.pdf
