Twenty-one House Republican Conference members, led by Rep. Andrew Garbarino (R-NY), submitted a letter to House Ways & Means Committee Chairman Jason Smith this week stressing the importance of prioritizing affordable energy for American families in any efforts to modify the existing energy tax credits.
As the U.S. Congress works through a budget resolution under the President’s promise to unleash American energy dominance, energy tax credits have found themselves in the hot seat. While supportive of the “America First” energy dominance initiative, the signatories of the letter argue that continued energy expansion, facilitated in part by these energy tax credits, not only supports national security but also creates good-paying jobs and ensures our energy security.
As we recently argued in a piece for Real Clear Energy, Republicans should be applying long-standing conservative principles such as business certainty and a reliance on market-based mechanisms as they evaluate the merit of these credits. They should also recognize how the country’s energy situation has changed. And they should understand how the elimination of certain provisions will impact consumers, businesses, and the country’s energy security, and in turn, their constituencies.
We recently released a comprehensive report, as prepared by economic consulting firm the Brattle Group, explaining that over the next decade – due to new data centers for AI, onshoring of manufacturing, and electrification of industrial processes and vehicles – U.S. peak electricity demand is expected to increase by 30%. Recognizing supply chain challenges, and the needed timeline for project planning, Brattle found that electricity generation system costs would rise by 14% is the tax credits were rescinded. These costs would be passed on to all Americans, causing the average household’s electricity bill to increase by $83 per year.
We commend the House Republicans who see the big picture of energy dominance, and an “all of the above” strategy. They note that any modifications to the energy tax provisions should be made in a targeted and pragmatic fashion and should be in line with the Republican conference priorities. They also recognize that it is essential to make it easier to do business with regulatory and permitting reform. We thank Rep. Garbarino for his leadership on this issue, and remain confident that Republicans will do what is right for the American people.