America stands on the cusp of the largest increase in electricity demand in a generation, propelled by international competition in artificial intelligence and manufacturing. Meeting this moment requires abundant, cheap, next-generation energy — and we believe that energy abundance is made possible by both cutting red tape on energy generation and transmission and making high-return public investments in them, especially in next-generation technology as it descends the cost curve toward commercial maturity.
Inclusive Abundance Action is concerned that certain provisions of the House-passed budget reconciliation bill (HR1) may undermine American energy abundance and jeopardize the United States’ economic competitiveness and national security by limiting our ability to rapidly grow our energy supply in the near-term.
Industry groups recently released an open letter with the Foundation for American Innovation (FAI) and other conservative groups raising many similar concerns about the implications of this bill for next-generation “baseload” power from advanced nuclear and geothermal projects. (FAI is a an Institutional Partner of Inclusive Abundance.)
After careful study and discussion with many of our partners, Inclusive Abundance has distilled a list of priorities that we hope the finalized reconciliation bill includes:
- Preserve Loan Programs Office funding
Sec. 41001(b)
The Department of Energy’s Loan Programs Office advances energy technology through critical scaling investments that crowd in further, private investment, while delivering a positive fiscal return for the public, leading to Energy Secretary Wright calling it “the most efficient tool we have to support emergent energy technologies.” The bill claws back all of the office’s unallocated loan funds, which “could leave the office unable to pay staff or originate most new deals.” - Revert to "commence construction" criterion and extend timelines for 45Y / 48E, especially for “clean firm” or “baseload” power
Sec. 112008 (a)(h)(1)(a-b)
The 45Y and 48E tax credits offer technology-neutral subsidy for investment in and production of clean energy. When claimed by low-carbon technologies at maturity, these subsidies amount to a costly carbon tax with limited efficacy in reducing energy prices or lowering carbon emissions. But as written, the broad-based curtailment of subsidies will raise taxes on many next-generation technologies well before they have reached commercial maturity.
The House-passed bill includes two compliance criteria for any (non-nuclear) 45Y/ 48E project —
a. that it commence construction in the 60 days following bill passage, and
b. that it be in-service by the end of 2028
Together, these restrictions will cause significant disruption and inefficiency for projects that are already underway and prove “near impossible” for non-nuclear projects, crushing investment in “clean firm” power like advanced geothermal.
We urge Congress to continue to allow projects to proceed purely on a “commence construction” standard, extend the proposed deadline, and consider a graduated phase-out. - Clarify and improve effectiveness of FEOC restrictions
Secs. 111111(d)(8)-112014(b)(1)
Targeted application of Foreign Entities of Concern (FEOC) restrictions to reduce Chinese involvement may help support more resilient supply chains. As written, however, the bill appears to drastically expand compliance burden — for example, firms receiving key credits must be familiar with their second-degree suppliers’ Board member’s family relationships. The ambiguity and extensiveness of these restrictions are more likely to shrink our energy sector and minerals industry or entrench their dependence on Chinese suppliers than to reshore them.
Bringing FEOC requirements in line with the Bipartisan Policy Center principles will help meet the intent. We also urge Congress to direct regulators to draft clear rules and to establish a tight timeline for final guidance from the Treasury Department. - Preserve robustness of battery and critical minerals industries amid loss of EV subsidy
Sec. 112002(a)(2)
The need to build out geostrategic, energy-enhancing industries like batteries is a point of national agreement. But the robustness of the battery industry is in particular danger under this bill; electric vehicle markets subsidized by the repealed 30D credit were expected to be the definitive driver of domestic demand for batteries, and the repeal of these credits will put between 65% and 85% of planned and existing battery manufacturing capacity at risk of closure. One high-value option for Congress is to appropriate funds for a sizable Strategic Resource Reserve under the Defense Department’s Title I and Title III powers to help stabilize minerals and battery markets.
- Preserve transmission facility financing
Sec. 41001(f-g)
Our national grid, which connects new power to households and firms, is in desperate need of investment — for repair and upgrades on the one hand, and new interregional construction on the other. Over time, investments of either kind will help meet surging demand and yield significantly cheaper energy for ratepayers. But $2B in financing for grid upgrades, appropriated under the Inflation Reduction Act, would be a particular boon for Americans; upgrades deliver especially quick returns and present minimal burden to landowners relative to new construction.
By December 2024, the Biden Administration had preliminarily designated three of the regions (NIETCs) in which this financing would be made available. The Trump Administration is refining and finalizing NIETCs in designation, and this financing must be available to deploy at that time (likely in coming months). To best facilitate energy abundance, Congress should also preserve grant funding for siting new interstate transmission lines, a notoriously challenging undertaking with high value to energy markets if done correctly.
