[Congressional Record Volume 163, Number 105 (Tuesday, June 20, 2017)]
[House]
[Pages H4958-H4963]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MODIFICATIONS OF CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR POWER
FACILITIES
Mr. RICE of South Carolina. Mr. Speaker, I move to suspend the rules
and pass the bill (H.R. 1551) to amend the Internal Revenue Code of
1986 to modify the credit for production from advanced nuclear power
facilities, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 1551
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. MODIFICATIONS OF CREDIT FOR PRODUCTION FROM
ADVANCED NUCLEAR POWER FACILITIES.
(a) Treatment of Unutilized Limitation Amounts.--Section
45J(b) of the Internal Revenue Code of 1986 is amended--
(1) in paragraph (4), by inserting ``or any amendment to''
after ``enactment of'', and
(2) by adding at the end the following new paragraph:
``(5) Allocation of unutilized limitation.--
``(A) In general.--Any unutilized national megawatt
capacity limitation shall be allocated by the Secretary under
paragraph (3) as rapidly as is practicable after December 31,
2020--
``(i) first to facilities placed in service on or before
such date to the extent that such facilities did not receive
an allocation equal to their full nameplate capacity, and
``(ii) then to facilities placed in service after such date
in the order in which such facilities are placed in service.
``(B) Unutilized national megawatt capacity limitation.--
The term `unutilized national megawatt capacity limitation'
means the excess (if any) of--
``(i) 6,000 megawatts, over
``(ii) the aggregate amount of national megawatt capacity
limitation allocated by the Secretary before January 1, 2021,
reduced by any amount of such limitation which was allocated
to a facility which was not placed in service before such
date.
``(C) Coordination with other provisions.--In the case of
any unutilized national megawatt capacity limitation
allocated by the Secretary pursuant to this paragraph--
``(i) such allocation shall be treated for purposes of this
section in the same manner as an allocation of national
megawatt capacity limitation, and
``(ii) subsection (d)(1)(B) shall not apply to any facility
which receives such allocation.''.
(b) Transfer of Credit by Certain Public Entities.--
(1) In general.--Section 45J of such Code is amended--
(A) by redesignating subsection (e) as subsection (f), and
(B) by inserting after subsection (d) the following new
subsection:
``(e) Transfer of Credit by Certain Public Entities.--
``(1) In general.--If, with respect to a credit under
subsection (a) for any taxable year--
``(A) the taxpayer would be a qualified public entity, and
``(B) such entity elects the application of this paragraph
for such taxable year with respect to all (or any portion
specified in such election) of such credit,
the eligible project partner specified in such election (and
not the qualified public entity) shall be treated as the
taxpayer for purposes of this title with respect to such
credit (or such portion thereof).
``(2) Definitions.--For purposes of this subsection--
``(A) Qualified public entity.--The term `qualified public
entity' means--
``(i) a Federal, State, or local government entity, or any
political subdivision, agency, or instrumentality thereof,
``(ii) a mutual or cooperative electric company described
in section 501(c)(12) or section 1381(a)(2), or
``(iii) a not-for-profit electric utility which has or had
received a loan or loan guarantee under the Rural
Electrification Act of 1936.
``(B) Eligible project partner.--The term `eligible project
partner' means--
``(i) any person responsible for, or participating in, the
design or construction of the advanced nuclear power facility
to which the credit under subsection (a) relates,
``(ii) any person who participates in the provision of the
nuclear steam supply system to the advanced nuclear power
facility to which the credit under subsection (a) relates,
``(iii) any person who participates in the provision of
nuclear fuel to the advanced nuclear power facility to which
the credit under subsection (a) relates, or
``(iv) any person who has an ownership interest in such
facility.
``(3) Special rules.--
``(A) Application to partnerships.--In the case of a credit
under subsection (a) which is determined at the partnership
level--
``(i) for purposes of paragraph (1)(A), a qualified public
entity shall be treated as the taxpayer with respect to such
entity's distributive share of such credit, and
``(ii) the term `eligible project partner' shall include
any partner of the partnership.
``(B) Taxable year in which credit taken into account.--In
the case of any credit (or portion thereof) with respect to
which an election is made under paragraph (1), such credit
shall be taken into account in the first taxable year of the
eligible project partner ending with, or after, the qualified
public entity's taxable year with respect to which the credit
was determined.
``(C) Treatment of transfer under private use rules.--For
purposes of section 141(b)(1), any benefit derived by an
eligible project partner in connection with an election under
this subsection shall not be taken into account as a private
business use.''.
(2) Special rule for proceeds of transfers for mutual or
cooperative electric companies.--Section 501(c)(12) of such
Code is amended by adding at the end the following new
subparagraph:
``(I) In the case of a mutual or cooperative electric
company described in this paragraph or an organization
described in section 1381(a)(2), income received or accrued
in connection with an election under section 45J(e)(1) shall
be treated as an amount collected from members for the sole
purpose of meeting losses and expenses.''.
(c) Effective Dates.--
(1) Treatment of unutilized limitation amounts.--The
amendment made by subsection (a) shall take effect on the
date of the enactment of this Act.
(2) Transfer of credit by certain public entities.--The
amendments made by subsection (b) shall apply to taxable
years beginning after the date of the enactment of this Act.
The SPEAKER pro tempore (Mr. Kelly of Pennsylvania). Pursuant to the
rule, the gentleman from South Carolina (Mr. Rice) and the gentleman
from Massachusetts (Mr. Neal) each will control 20 minutes.
The Chair recognizes the gentleman from South Carolina.
General Leave
Mr. RICE of South Carolina. Mr. Speaker, I ask unanimous consent that
all Members may have 5 legislative days within which to revise and
extend their remarks and include extraneous material on H.R. 1551,
currently under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from South Carolina?
There was no objection.
Mr. RICE of South Carolina. Mr. Speaker, I yield myself such time as
I may consume.
Mr. Speaker, I stand in strong support of H.R. 1551, a bill I have
sponsored that modifies the advanced nuclear production tax credit.
The nuclear production tax credit has been a vital incentive to jump-
start a nuclear industry that has been dormant for almost 40 years.
Unfortunately, due to overregulation, ambiguities in the law, and other
unanticipated events, the first-in-a-generation nuclear plants that
began construction because of this tax credit are in danger of being
shut down midconstruction.
Without certainty that these facilities will have full access to the
allocation of their tax credits, it may be another 30 or 40 years
before this country builds another cutting-edge nuclear facility.
Thankfully, the legislation we are considering today provides these
facilities the certainty they so desperately need to move forward.
{time} 1630
Almost 12 years ago, Congress established the nuclear production tax
credit as part of a broader package designed to ensure our energy
independence. Not wanting to oversubsidize the nuclear industry,
Congress set out to limit the credit in a number of ways, including a
national production capacity that effectively capped the amount of this
credit available.
South Carolina and Georgia responded to this incentive, making large
investments in nuclear facilities that represented the pinnacle of
safety and innovation in the industry. After years of applications,
planning, and rigorous oversight by multiple regulatory authorities,
these plants began construction in 2013, receiving sizable allocations
of the nuclear production tax credit's national capacity.
Yet, it quickly became clear changes to the underlying provision were
necessary in order for these plants to fulfill the capacity allocation
as Congress originally intended. For example, right now, not-for-profit
entities like public utilities are unable to utilize or transfer their
share of the credits, leaving the majority of the tax credits allocated
to these two plants unusable.
[[Page H4959]]
Additionally, strict placed-in-service date rules would force these
plants to make decisions between finishing before a deadline or making
sure they are constructed in the safest way possible.
Recently, to make matters worse, a third-party contractor for both
plants unexpectedly filed for bankruptcy, putting the projects in
jeopardy of finishing before the placed-in-service date, if at all.
In the coming weeks, both plants must go before State regulators and
provide a plan for how they will continue construction. The full
availability of the $2 billion in tax credits will be a key factor in
the regulators' assessment of whether to approve the plans to continue
with the facilities or shut down the construction completely.
Taking a step back for a second, I think it is important to note that
one of my top priorities in Congress is to help restore our country's
competitiveness through a comprehensive overhaul of our Tax Code. An
ideal tax system promotes parity between different energy sources and
gets the government out of the business of picking winners and losers.
Before we get to that ideal tax system, we must create a smooth
transition from our current system to the new system. This legislation
is an important part of that transition. As Ways and Means Committee
Chairman Brady said at our markup last week: ``Nuclear power is a
critical component of an all-of-the-above strategy for energy
independence and national security.''
Without this legislation, the nuclear power industry may cease to
exist as we know it today in this country, which is exactly why passing
this legislation today is more important now than ever. Nuclear power
is crucial to our energy independence.
Additionally, if these facilities shut down tomorrow, it will
immediately cost 12,000 jobs in South Carolina and Georgia. It will
cost the ratepayers hundreds, if not thousands, of dollars in increases
in their annual utility bills. And most alarming, our national security
will be jeopardized, as countries like China and Russia continue to
make massive investments in nuclear power production.
We need to give these plants the certainty of the tax credits as
Congress originally intended, not just for South Carolina and Georgia,
but for the continued innovation of nuclear energy and the security of
our Nation.
Mr. Speaker, I reserve the balance of my time.
Mr. NEAL. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 1551, a bipartisan bill to
modify the section 45J production tax credit for advanced power.
This bill is sponsored by two of my colleagues on the Ways and Means
Committee, Mr. Blumenauer from Oregon and Mr. Rice from South Carolina.
It enjoys bipartisan support of members of the committee as well.
Passage of this bill is critical to thousands of jobs in South
Carolina and Georgia. As you know, I am committed to passing good,
bipartisan legislation that puts and keeps Americans to work in good-
paying jobs.
However, I must highlight my disappointment that the committee at
this moment has not acted on other important priorities in the energy
tax space. For example, there is bipartisan interest in this Congress
for extending section 48 investment tax credit for non-solar, section
48-eligible technologies. H.R. 1090, the Technology for Energy Security
Act, introduced by our colleagues, Mr. Reed from New York and Mr.
Thompson from California, is supported by a bipartisan group of 93
Members of Congress.
The committee is overdue in considering this important piece of
legislation, as well as other provisions vital to renewable energy,
renewable fuels, and energy efficiency and alternative fuel vehicles
that expired at the end of 2016. As the gentleman from South Carolina
noted, all of the above.
I hope we can act before the eleventh hour to extend these
provisions.
Mr. Speaker, I conclude by reminding my colleagues that the United
States Government invests a tremendous amount of money on energy policy
through our Tax Code. These investments have helped to grow our economy
and create good-paying jobs nationwide. Therefore, as we continue the
discussions on tax reform, I hope and anticipate Chairman Brady will
consider focusing on comprehensive, fully integrated energy strategy
reform as well.
Mr. Speaker, I reserve the balance of my time.
Mr. RICE of South Carolina. Mr. Speaker, I yield 2 minutes to the
gentleman from South Carolina (Mr. Duncan).
Mr. DUNCAN of South Carolina. Mr. Speaker, I thank the gentleman from
South Carolina (Mr. Rice) for his work on this.
I rise today to keep the lights on for American nuclear energy.
America is being left behind in the nuclear energy race. Nuclear
energy in the United States is lagging behind our competition. The four
new generation reactors being built in South Carolina and Georgia are
the first new reactor construction since the 1970s. The Watts Bar 2
reactor in Tennessee, which was first permitted in the 1970s, only
recently came online in 2016.
Mr. Speaker, America needs to gets serious about nuclear energy.
These new reactors not only keep our economy pumping with 24/7 base-
load electricity, they are also the foundation for America's national
security. A successful civilian nuclear energy sector is key to
supporting America's military needs.
Nuclear needs to be approached holistically. From new production at
plants like V.C. Summer in South Carolina, to treatment and disposal
facilities at the Savannah River Site, it is in America's national
security interest that policies keep all aspects of the nuclear life
cycle competitive with the rest of the world.
Passing this legislation now will send a clear signal to the
regulatory authorities at home and nations abroad that America is
serious about national security. Without such a signal, the chances
that the regulatory authorities disregard the tax credits for the
purposes of evaluating the project are much higher, likely leading to
the authorities not approving the continued construction of the plants.
The United States must not turn over leadership in nuclear technology
to Russia and China. China's recent nuclear deals are with Sudan, South
Africa, Kenya, Egypt, Argentina, and Great Britain.
Rosatom, which administers the former Soviet weapons complex, says it
has received orders for 34 nuclear power reactors in 13 countries,
including Iran. Together, Russia and China are constructing almost 30
new advanced nuclear units, whereas the four units at the V.C. Summer
and Vogtle plants would be our first nuclear units in almost 40 years.
Nuclear energy is the cornerstone of American economic and national
security. I urge my colleagues to not turn the lights out on nuclear
energy, and to vote in favor of H.R. 1551.
Mr. NEAL. Mr. Speaker, I yield 5 minutes to the gentleman from South
Carolina (Mr. Clyburn), the assistant Democratic leader and my friend.
Mr. CLYBURN. I thank my friend, Mr. Neal, for yielding and for his
support of this bill. It is very important to the States of South
Carolina and Georgia.
Mr. Speaker, H.R. 1551 will make two critical modifications to the
nuclear production tax credit program. This bill will allow government-
owned electric utilities and nonprofit electric cooperatives to utilize
the credit, which current law restricts to for-profit utilities only.
It will also remove the placed-in-service deadline for facilities to be
completed.
Since the tax credit's original passage in the Energy Policy Act of
2005, four new advanced nuclear plants, the V.C. Summer site in South
Carolina, and the Vogtle site in Georgia, have been licensed by the
Nuclear Regulatory Commission and are under construction.
Both projects are partly owned by State or municipal-owned utilities
or nonprofit electric cooperatives. These public power entities, which
have taken the first steps in constructing new advanced nuclear
facilities, should not be penalized, but should, instead, be treated
similarly to the for-profit utilities for the purpose of these tax
incentives.
The construction that is currently underway in South Carolina and
Georgia employ over 12,000 skilled workers
[[Page H4960]]
and represent billions of dollars of investment. When complete, they
will be the largest addition of carbon-free energy in either State and
will replace older fossil fuel-emitting plants.
Recently, the contractor building both the South Carolina and Georgia
facilities has entered into bankruptcy proceedings, raising the
possibility of further delays in the completion of these projects. It
is critical that the placed-in-service deadline be extended so that
these projects, the first new advanced nuclear construction projects in
this country in over 30 years, may be completed.
While Russia, China, and other countries around the world are
investing in nuclear energy, we cannot afford to walk away from these
important sources of clean energy for future generations.
The modifications in this bill do not expand the tax credit and, as
such, have little additional cost to the taxpayer.
I want to thank my colleagues, Tom Rice and Earl Blumenauer, for
sponsoring this legislation; and Chairman Kevin Brady and Ranking
Member Richard Neal for the support they have given to it.
Mr. RICE of South Carolina. Mr. Speaker, I yield 2 minutes to the
gentleman from Georgia (Mr. Jody B. Hice).
Mr. JODY B. HICE of Georgia. Mr. Speaker, I thank all of my
colleagues for the comments that have been made regarding this very
important piece of legislation.
We all know that securing American energy independence is absolutely
critical to the future prosperity of this Nation, and nuclear power
plays a major role in that mission.
At the Vogtle plant in Georgia, thousands of engineers and craftsmen,
many of whom live in my district, are hard at work putting the United
States at the forefront of advanced nuclear technology. The Vogtle
plant and its sister plant in South Carolina, V.C. Summer, have four
new, state-of-the-art reactors under construction. The clean, low-cost,
safe energy that is produced from both Vogtle and V.C. Summer will pave
the way for future reactors and mark a new era for nuclear power in the
United States.
H.R. 1551 makes relatively small changes to already established tax
credits, but this legislation will have an enormous impact on ensuring
nuclear power remains a viable source of energy.
So I, again, just want to thank my good friend, Mr. Rice, for
introducing this sincerely important piece of legislation, and I urge
all of my colleagues here to support H.R. 1551.
Mr. Speaker, I am honored to support this bill.
Mr. NEAL. Mr. Speaker, I yield 5 minutes to the gentleman from Texas
(Mr. Doggett), my friend.
Mr. DOGGETT. Mr. Speaker, how very appropriate it is today that this
Congress is interrupting consideration of child welfare and foster care
bills in order to address a gift for the nuclear industry. An
indifferent Congress that refuses to put an extra dime in addressing
the deficiencies of our foster care system doesn't hesitate for a
moment in giving a few more million dollars to the nuclear industry.
Isn't it amazing to hear what we will accomplish with a mere $16
million additional tax subsidy?
Our national security will be protected. This is the first concern I
have heard here on the floor in months from a Republican about giving
things to Russia and China. Maybe the better place to look than this
bill is down the street at the White House, if the real concern is what
we are giving to the Russia.
To hear supporters of this bill talk about the dangers to Georgia and
South Carolina, you would think that Sherman's March on Atlanta,
Georgia, and South Carolina was nothing compared to the harm this
Congress would do if it failed to enact this bill.
Well, the devastation that faces consumers in these States has
nothing to do with what Congress has or has not done, but it has to do
with the nuclear industry seeking special treatment, much as it is
seeking taxpayer subsidies here today.
{time} 1645
It is an industry that has disregarded longstanding utility law to
compel Georgians to pay higher electric bills for utility investments
before they ever deliver one kilowatt of power. And it may, in fact,
never get around to providing any power for all the money that is
wasted on them.
This is a bill that is masquerading as an incentive for the future. A
glorious new day for nuclear power. And yet it makes this tax credit
available to 20-year-old nuclear technology and for last-century
uranium mining.
This bill hardly matches its cover. It is true that $16 million of
additional help to the nuclear industry is a mere footnote compared to
the billions of taxpayer dollars, taxpayer resources, that have been
lavished on this industry in the past.
In Georgia, the nuclear power industry literally turned decades of
utility law upside down in demanding that electric ratepayers pay for
what stockholders traditionally have paid for. Even after doing that,
Westinghouse, a once distinguished American company, a blue ribbon
company, went belly up. It has been nuked, and so have those local
utility ratepayers.
As The New York Times reported recently:
``Many of the company's injuries are self-inflicted. . . . ''
``Bankruptcy will make it harder for Westinghouse's business partners
to collect money they are owed by the nuclear-plant maker.''
``Now, it is unclear whether the company will be able to complete any
of its projects, which in the United States are about 3 years late and
billions over budget.''
``The cost estimates are already running $1 billion to $1.3 billion
higher than originally expected, according to a recent report from
Morgan Stanley, and could eventually exceed $8 billion . . . '' right
onto the shoulders of those ratepayers in Georgia and South Carolina.
Of course, you would have thought, after the disaster at Fukushima
and the many questions raised about nuclear power in Japan, that
Congress would be rethinking nuclear power as a panacea. But even if
you overlook this human disaster and the dangers to health and safety,
a recognition that when the nuclear industry makes a mistake it is a
mistake that lasts forever, if you just look at the economics alone,
this kind of tax subsidy is unjustified.
With an ample amount of natural gas coming on the market, with so
much renewable energy, nuclear simply has not made economic sense, and
the history of this particular legislation demonstrates that.
When this tax break was originally set up back in 2005, there were
some 32 nuclear plants that were going to take advantage of it, and it
hasn't been because of the failure of Congress that they didn't. Out of
that 32, exactly four have even begun to be built, and not one of them,
not a single one of them, has been completed in over a decade and a
half.
After this record of miserable failures, there is good reason to ask
why taxpayers should be called on to give even more.
Mr. Speaker, I include in the Record a letter from 13 environmental
groups expressing opposition to the legislation.
June 20, 2017.
Re Opposition to H.R. 1551--amending tax credit provisions
for ``advanced'' nuclear power.
Dear Speaker Ryan and Minority Leader Pelosi: On behalf of
our millions of members we are writing to register our strong
opposition to H.R. 1551 that would eliminate the placed-in-
service date for the nuclear production tax credit, which is
currently January 1, 2021. It would also allow public power
companies to receive the benefit of the federal production
tax credit even though they pay no taxes.
Despite H.R. 1551's misleading title, the production tax
credit it extends is not designated solely for new, supposed
``advanced'' nuclear technologies. Rather, reactor designs
that were approved over twenty years ago are eligible as
described in the bill analysis by the Joint Committee on
Taxation, ``An advanced nuclear facility is any nuclear
facility for the production of electricity, the reactor
design for which was approved after 1993 by the Nuclear
Regulatory Commission.''
The nuclear industry is once again demonstrating that it is
not only dirty and dangerous but that it is also not cost
competitive. Despite promises that this time would be
different, the four Toshiba-Westinghouse AP1000 nuclear
reactors under construction in the U.S., two at Southern
Company's
[[Page H4961]]
Plant Vogtle in Georgia and two at SCANA's V.C. Summer plant
in South Carolina, have yet again shown that the nuclear
industry is incapable of building new reactors within budget
or on time even with significant federal and state financial
incentives and new, streamlined federal licensing processes.
Reports issued in recent weeks show that the costs of these
projects are out of control, and falling further and further
behind schedule. Both are approximately 40% complete in terms
of construction, yet have already more than doubled in cost
and projected construction time. When construction started in
2009, Vogtle 3 and 4 were projected to cost a total of $14
billion and to begin generating electricity in 2016 and 2017,
respectively. Eight years later, the reactors may not be
completed until 2022 and 2023, if ever, and at an estimated
total project cost of $29 billion. Summer 2 and 3 were
projected to cost $11 billion, but overruns have pushed the
total to at least $22.9 billion. Consequently, utility
customers in both states are suffering as they are paying in
advance for the financing costs associated with the projects
far longer than initially predicted and will ultimately face
increasing bills because of the projects' costs overruns.
H.R. 1551 would unfairly reward Southern Company and SCANA
Corp. for not being able to complete these projects on time,
providing them each with more than $1 billion in taxpayer-
provided handouts to shield their shareholders from the
financial responsibility of pursuing inherently risky,
uneconomical projects. Perhaps even worse, eliminating the
placed-in-service date will provide an incentive for yet
other utilities to make the same mistakes.
The purpose of tax incentives, whether for nuclear,
renewable energy, or other technologies, is to support
innovation and technological leadership in the energy sector
and to drive the commercialization of promising new
technologies. When the nuclear production tax credit was
created in 2005, Congress hoped to support a revival of
nuclear reactor construction. Only four out of thirty-two
reactors proposed since 2005 ever began construction, and the
vast majority of the rest have been cancelled or indefinitely
shelved.
The failures to bring any of the four reactors online
within the fifteen-year period of the tax credit program
demonstrates that the technology is an even greater failure
than the first generation of reactors, and it will never be
widely commercialized. It is simply not a justified or worthy
investment of taxpayers' money to grant the owners of these
reactors the extraordinary relief of billions of dollars in
subsidies for projects that hold no promise for the U.S.
energy sector. It should not be forgotten that Southern
Company's expansion of Plant Vogtle has already received
substantial taxpayer support through the $8.3 billion in
federal nuclear loan guarantees and the public/private cost-
sharing support during the permitting and licensing process.
Finally, we oppose H.R. 1551 because the legislation
establishes an expensive precedent by creating brand-new tax
credit value for any not-for-profit project partners that can
only be transferred to all for-profit project partners. Both
the Vogtle and Summer projects feature a combination of both
for-profit and not-for-profit utilities. Not-for-profit
utilities, such as rural cooperatives, municipal or state-
owned utilities, have no federal tax liability and therefore
are not entitled to tax credits. But under H.R. 1551, the tax
credit is made available for not-for-profit entities that can
only be transferred to the project's for-profit partners.
Furthermore, H.R. 1551 specifies that rural cooperatives may
treat tax credit transfers as funds collected for ``the sole
purpose of meeting losses and expenses''--that is, as a form
of debt relief, for which production tax credits were not
intended. These measures amount to a brand-new, taxpayer-
shouldered giveaway for both Southern Company and SCANA Corp.
Furthermore, the definition of ``eligible partners'' that
can receive the tax credits from the not-for-profit
partner(s) is troubling as it ``includes any person who
designed or constructed the nuclear power plant, participates
in the provision of nuclear steam or nuclear fuel to the
power plant, or has an ownership interest in the facility.''
Providing tax credits to reactor suppliers or the uranium
mining industry is objectionable and goes beyond the original
intent of the law to provide incentives to actual nuclear
utilities that were among the first to pursue new nuclear
generation.
The rationales provided for eliminating the placed-in-
service date for the nuclear production tax credit are
irrelevant and have no merit:
``The cost of H.R. 1551 is minimal.'' The cost of the
nuclear production tax credits is at least $5.2 billion. Due
to both eliminating the placed-in-service date and by
permitting qualified public entities to transfer credits to
an eligible project partner, the latter provision would
actually increase the cost of the tax credits by allowing
non-profit, tax-exempt owners of reactors to take a large
federal tax credit. State and municipal utilities and rural
cooperatives are major owners of both the Vogtle and Summer
projects: rural cooperatives own 54.3% of the Vogtle 3 and 4
reactors; and Santee Cooper owns 45% of the Summer 2 and 3
reactors. By permitting these tax-exempt entities to transfer
tax credits to private sector partners, H.R. 1551 would
double the anticipated amount of the tax credits for the
Summer and Vogtle projects. The credits are valued at $18 per
megawatt-hour of electricity generated for the first eight
years. This would amount to about $160 million per year for
each reactor--$1.3 billion each, or $5.2 billion for all four
reactors. Taxpayers stand to avoid a $5.2 billion expense if
none of the reactors come online before the tax credits
expire at the end of 2020. By eliminating the placed-in-
service date, H.R. 1551 could cost taxpayers billions of
dollars for a failed technology.
``The tax credits are essential to the completion of the
Vogtle and Summer projects.'' It is not clear that the tax
credits will have any effect on the outcome of the Vogtle and
Summer projects at this point. Each of the reactors under
construction is now $5 billion to $7 billion over budget.
Even $1.3 billion in tax credits is not enough offset such
massive cost overruns; and, in/ any case, the benefits of the
production tax credit were assumed when the utilities began
building the reactors. If the utilities determine to complete
the reactors despite the cost overruns, the value of the tax
credits will not be a decisive factor.
``The tax credits are essential to maintaining U.S.
leadership in the global nuclear industry.'' Extending the
nuclear production tax credit will do nothing to promote U.S.
leadership in nuclear technology or reactor exports. The tax
credits themselves will derive to the domestic utilities that
will own and operate the Vogtle and Summer reactors, not the
manufacturers that design, export, and build reactors. The
nuclear divisions of Westinghouse and General Electric are
the only two U.S.-based companies actively involved in the
global reactor market, but both are now owned by Japanese
corporations (Toshiba and Hitachi). As a result of
Westinghouse's bankruptcy, Toshiba has determined not to
build any more new reactors, and not to continue supporting
the AP1000 reactor design. GE-Hitachi's prospects are no
better. The company has only two reactors in construction
globally (both in Japan and long-delayed).
``A viable commercial nuclear power industry is necessary
to support the nation's defense nuclear complex.'' This would
be a hypocritical reason to provide a subsidy to reactors,
and could prove dangerous to peace and security domestically
and globally. The U.S. is under international treaty
obligations to maintain a strict separation of civilian and
military applications of nuclear technology. Historically,
the U.S. government's purpose in promoting commercial nuclear
power was to encourage the peaceful application of atomic
energy, not to advance nuclear weapons. If the U.S. is
perceived as promoting civilian nuclear power as a means of
bolstering our nuclear weapons program, then it will
undermine our credibility in the nonproliferation arena. It
could also encourage enemies to view nuclear power plants as
extensions of our military establishment, and hence as
legitimate targets in armed conflict.
We strongly oppose this bill and urge you to vote against
this undeserved industry bailout. We urge Congress to oppose
this provision and instead focus on low- or no-carbon energy
choices that can be deployed affordably in the near-term, at
low risk, that will lead us to a clean and sustainable
future.
Sincerely,
Beyond Nuclear, Center for Biological Diversity, Clean
Water Action, Environment America, Friends of the
Earth, Greenpeace, League of Conservation Voters,
Natural Resources Defense Council, Nuclear Information
And Resource Service, Public Citizens, Sierra Club,
Southern Alliance for Clean Energy, Southern Oregon
Climate Action Now.
Mr. DOGGETT. Mr. Speaker, I believe that there is an important
additional concern raised by our colleague Mr. Neal already.
The SPEAKER pro tempore (Mr. Mitchell). The time of the gentleman has
expired.
Mr. NEAL. I yield the gentleman an additional 1 minute, Mr. Speaker.
Mr. DOGGETT. And that is the fact that there are so many other
additional measures that our colleagues' bipartisan efforts that are
pending in our committee on energy-efficient residential property, on
fuel cells, on small wind energy, on geothermal heat pumps, to mention
only a few. These represent forms of energy and energy conservation
that will help us address climate change while achieving our energy
objectives.
Mr. Speaker, instead of today's measure, our focus should be on safe,
healthy forms of energy instead of an industry that costs too much and
poses too much danger to humans.
Mr. RICE of South Carolina. Mr. Speaker, I yield 2 minutes to the
gentleman from Texas (Mr. Brady), the chairman of the Ways and Means
Committee.
Mr. BRADY of Texas. Mr. Speaker, I rise today in strong support of
H.R. 1551, legislation supported by Republicans and Democrats, focused
on strengthening America's energy security.
This bill is sponsored and led by Congressman Tom Rice, and it
clarifies an
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existing law dealing with tax credits for nuclear energy production and
making sure these credits work effectively for America. It addresses an
urgent problem that now poses a threat to America's energy security
and, by extension, our national security.
As a result of an uncertainty with respect to the nuclear production
tax credit, there is a risk of construction grinding to a halt on
several cutting-edge nuclear power plants in our country. Meanwhile,
our global competitors like Russia and China are pushing forward
nuclear power to bolster their own energy sectors.
Nuclear power is critical to an all-of-the-above strategy for
American energy independence and our national security. It is urgent
that we take action now to solve this issue in our Tax Code and provide
the certainty that our energy innovators need to continue moving
forward with construction. That is exactly what Congressman Rice's bill
will do.
To be clear, I would rather be standing here today to announce that
this important bill is part of overall tax reform. But the fact is that
our focus on that important goal doesn't prevent us from acting to
solve urgent problems in existing law like this.
The fact is this bill is not what Washington calls a tax extender.
That circus isn't coming back to town. This bill is a solution to a
serious and immediate problem in our Tax Code that threatens our energy
security. That is why we are moving it forward right now.
Mr. Speaker, I want to thank Congressman Rice for his leadership on
H.R. 1551 and the strong support from the South Carolina and Georgia
delegations, all who have weighed in on this. And as we continue
working with President Trump in the Senate to deliver comprehensive tax
reform this year, we should pass this bill now, provide greater
certainty for our nuclear energy innovators.
Mr. NEAL. Mr. Speaker, I reserve the balance of my time.
Mr. RICE of South Carolina. Mr. Speaker, I yield 2 minutes to the
gentleman from Georgia (Mr. Allen).
Mr. ALLEN. Mr. Speaker, I want to thank Congressman Rice for his
introduction of this important legislation.
Mr. Speaker, President Trump and I agree on many issues facing our
Nation today. We share our number one priority: national security.
Energy independence is critical to our mutual mission to safeguard the
United States. That is why I stand before my colleagues in the Nation
today in support of H.R. 1551 to modify the nuclear production tax
credit.
Enacted in 2005, the Energy Policy Act provided production tax
credits for reactors with a deadline of 2020. When the law was enacted,
Congress did not anticipate the sunset date would place a hardship on
energy producers. As every businessowner knows, the unexpected happens
in the real world.
My district is leading the way in the expansion of our Nation's
nuclear energy resources, constructing two of the first nuclear
reactors in the United States in more than 30 years. In fact, the 12th
District of Georgia will have more than 75 percent of the nuclear
generating capacity of the Southern Company.
Also, because Georgia has been ranked as the number one place to
locate your business for the last 4 years is because we enjoy extremely
low power rates.
In an unfortunate turn of events, Westinghouse filed for bankruptcy,
which could result in the nuclear units coming online at Plant Vogtle a
little later than 2020. H.R. 1551 will assist our Nation's energy
producers to complete Plant Vogtle's units 3 and 4. Mr. Speaker, this
is absolutely critical. This change will not cost the taxpayer an
additional dime.
You may ask: Why is this a national security issue? As it has been
mentioned, China and Russia continue to make heavy investments in
nuclear energy. We cannot send a signal to the rest of the world that
nondemocratic countries are leading the way in nuclear production and
that America is not investing in our own energy independence.
Mr. Speaker, Plant Vogtle is critical to provide clean low-cost
energy to Georgians. I urge my colleagues to join me in supporting this
critical important legislation.
Mr. NEAL. Mr. Speaker, I continue to reserve the balance of my time.
Mr. RICE of South Carolina. Mr. Speaker, I yield 2 minutes to the
distinguished gentleman from South Carolina (Mr. Sanford).
Mr. SANFORD. Mr. Speaker, I, too, rise in support of H.R. 1551, and I
want to thank Mr. Rice for his hard work on this bill and the way he
shepherded it through the legislative process. I think it is awfully
important for a number of different reasons. I think it is important
for the reason of the environment.
I come from the low country of South Carolina, and we are seeing
firsthand sea level rise and its effect. We can have a huge debate on
what is causing that, what is not causing that. But in the meantime,
there is a clear scientific consensus on the idea of increased
CO2 emissions being tied to this notion of global warming,
which very much impacts my congressional district. It impacts a lot of
places around the world.
So I think that there is no perfect energy source out there, in
fairness to my colleague. But of the available choices out there, I
think that something that does address the CO2 emission
question is awfully important, and nuclear does.
I think it is also important from the standpoint of base load in
terms of energy in this country and its importance in terms of
competitiveness around the world.
Gordon Sullivan wrote a book entitled ``Hope is not a Method,'' and
he talked about we may hope for a whole host of different breakthroughs
in terms of alternatives, and I do hope that they come through, whether
that is solar or tidal or who knows what. I think that there are
emerging technologies there, but, in the meantime, we have to handle
this issue of base load from the standpoint of our ability to compete
with the rest of the world in terms of baseline energy as it relates to
business and it relates to, frankly, the ability to cool one's house in
the warm air of South Carolina, or I guess the southwest these days.
I think it is also important from the standpoint of energy
independence. This idea of domestic production becomes incredibly
important given the way in which we are dealing with a whole host of
different places around the globe that at times don't want what is best
for America but want what is best for their region to the exclusion, at
times, of what is best for America.
Mr. Speaker, this idea of energy independence, I think, is also an
important consideration into H.R. 1551. It is for that reason that I
come by for a second to thank Tom Rice for his hard work in shepherding
this bill forward.
Mr. NEAL. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, in reference to the previous gentleman's comments, it is
helpful for the acknowledgment that there is broad agreement among
scientists as to how global warming is occurring. There is a suggestion
that it is because of problems that have been generated by man- and
womankind. I think that President Obama said clearly all of the above
as part of the solution.
So the suggestion that we have had on this side as this legislation
advances is also to use the pulpit of the Ways and Means Committee to
move forward with advancing meaningful job creation in terms of
alternative and renewable energy as well, and creating greater energy
efficiencies.
I would think that there should be an opportunity in this House to
find some common agreements on legislation, similar to what we are
witnessing today, on the renewable front as well. Greater energy
efficiency for all of us should be of paramount concern.
Mr. Speaker, I yield back the balance of my time.
Mr. RICE of South Carolina. Mr. Speaker, I yield myself such time as
I may consume.
Mr. Speaker, in closing, I cannot overstate the importance this
legislation represents to the future of nuclear energy production in
the United States.
As the Ways and Means Committee noted when it approved this same
measure last year, while the committee continues to work on
comprehensive tax reform as a critical means of promoting economic
growth and job creation, it is important to provide immediate clarity
and certainty on tax issues affecting American businesses, and this
legislation will provide just that.
[[Page H4963]]
I would also like to thank Chairman Brady for his continued support
of H.R. 1551, as well as the bipartisan support we received when this
bill was voted out of committee by voice vote last week.
Mr. Speaker, I ask for continued bipartisan support from my
colleagues here in the House in passing this legislation, not just
because it makes commonsense changes to the credit but because of the
extreme sense of urgency to provide certainty for our nuclear industry.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from South Carolina (Mr. Rice) that the House suspend the
rules and pass the bill, H.R. 1551, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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