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Utilities Request that the CPUC Incorporate the Inflation Discount Act Tax Credit score Adjustments into the Internet Power Metering Continuing | Buchalter


On August 19, 2022, the California investor-owned utilities filed a joint movement for official discover on the California Public Utilities Fee (CPUC), saying that the lately adopted Inflation Discount Act of 2022 (HR 5376) is “immediately related” to the CPUC’s open web power metering (NEM) continuing.

The CPUC is presently considering a revision to its NEM tariff (known as NEM 2.0), which is a billing mechanism that enables utility clients to generate their very own electrical energy—e.g., from photo voltaic panels—to serve their very own power wants onsite. Clients additionally obtain a monetary credit score on their electrical payments for any surplus power that’s fed again to the utility. On December 13, 2021, the CPUC issued a proposed choice revising the NEM 2.Zero tariff, discovering that it presently “negatively impacts non-participating clients; shouldn’t be cost-effective; and disproportionately harms low-income ratepayers.” The proposed choice’s adjustments to charges and export compensation was controversial, and led to an outcry by the photo voltaic business. The CPUC is anticipated to situation an alternate proposed choice within the close to time period.

The joint utilities (Pacific Fuel and Electrical Firm, San Diego Fuel & Electrical Firm, and Southern California Edison Firm) submitted its submitting within the open continuing, asserting that the Inflation Discount Act reinstates and extends the next clear power credit that have been scheduled to be scaled again:

  • Sections 13102 and 13702 (extending and modifying the power credit score) amend Sections 48 and 48E, respectively, of the Inner Income Code, offering a 30 p.c credit score for sure renewable power initiatives (together with photo voltaic and power storage expertise) that (a) are sized lower than one megawatt; or (b) meet sure wage and apprenticeship necessities.
  • The Residential Clear Power Credit score (Part 13302) amends Part 25D of the Inner Income Code (26 U.S.C. § 25D) to (a) prolong via December 31, 2034 the tax credit score accessible to people for qualifying photo voltaic electrical property expenditures (amongst different sorts of clear power property expenditures); (b) reinstate the accessible credit score at 30 p.c of the qualifying expenditure (which, previous to modification, had dropped to 26 p.c and was scheduled to drop to 22 p.c as of January 1, 2023); (c) prolong availability of the 30 p.c credit score to January 1, 2033, and section out the credit score thereafter; and (d) broaden the credit score to use to certified battery storage expertise expenditures.

The joint utilities clarify that “the extension of the 30 p.c tax credit score for each non-residential and residential photo voltaic initiatives, is immediately related to the modeling of a successor web power metering tariff on this continuing.” The CPUC has not issued a ruling or response to the joint utilities’ movement for official discover, and it stays to be seen the extent to which the alternate choice will incorporate the Inflation Discount Act.

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