Hoeven Pressing FERC to Fairly Value Coal as Baseload Power, Urges Treasury Secretary for Timely Implementation of 45Q Tax Credit
Senator Helps Advance James Danly’s Nomination to FERC, Working to Ensure 45Q Supports CCUS Efforts like Project Tundra
WASHINGTON – Senator John Hoeven, a member of the Senate Energy and Natural Resources (ENR) Committee, this week continued his efforts to support coal’s contributions to the reliability of the nation’s electrical grid. To this end, the senator:
- Helped advance the nomination of James Danly to serve as a member of the Federal Energy Regulatory Commission (FERC).
- Hoeven has been pressing FERC to ensure coal is valued fairly as a reliable source of baseload power. Last November, during Danly’s confirmation hearing, Hoeven emphasized the importance of valuing coal as an “always-on” power source.
- Spoke with Treasury Secretary Steven Mnuchin, urging him to issue the final regulations for the 45Q tax credit in a timely manner and ensure they can be properly utilized by carbon capture, utilization and storage (CCUS) project developers, including for Project Tundra.
- This includes pressing the Treasury Department to put in place Hoeven’s CO2 Regulatory Certainty Act on an administrative basis.
- The senator also urged for expanding the definition of Carbon Capture Equipment to prevent inadvertently limiting eligibility for the tax credit.
“We continue to drive home the importance of coal as an ‘always-on’ power source for our nation’s grid and to press FERC on the importance of a better capacity value for this fuel,” said Hoeven. “As we move James Danly’s nomination to be a FERC Commissioner through the full Senate, we also continue working to advance other priorities to support coal’s future. The 45Q tax credit will be an important tool for developing CCUS technology and making these projects commercially-viable. Considering the need to move forward on projects and the significant technical and economic differences between CCUS projects, our conversation with Secretary Mnuchin was focused on ensuring the 45Q tax credit is in place as soon as possible and that it works for Project Tundra and other efforts.”
FAIR VALUE FOR COAL-GENERATED ELECTRICITY
Hoeven’s efforts with FERC come as part of his ongoing work to ensure the benefits of coal-generated electricity are properly valued, given its reliability as a baseload source of power that is available 24 hours a day, seven days a week. The senator raised this priority with FERC Chairman Neil Chatterjee last week, stressing that the grid is being forced away from baseload resources like coal and outlining the need to maintain diverse sources of electricity.
On top of this, Hoeven has worked to provide much-needed regulatory relief for the nation’s energy producers, including repealing burdensome rules on coal and lignite producers. Among other things, the senator has supported the implementation of the Affordable Clean Energy (ACE) rule, which replaced the costly one-size-fits-all emissions regulations for coal power plants issued by the previous administration. Hoeven also voted to uphold the ACE rule when a resolution to overturn it was brought up for consideration by the Senate in October.
IMPLEMENTING THE 45Q TAX CREDIT
Last month, the Treasury Department issued two pieces of key guidance on the implementation of the 45Q tax credit. Hoeven worked with the administration to advance this important step, which provides greater clarity to developers of CCUS projects and will enable them to begin moving forward with financial arrangements and construction plans. The senator’s conversation with Mnuchin builds on his work to secure the third and final piece of the 45Q rules as soon as possible.
Further, Hoeven is pressing for the rules to provide the certainty needed to make CCUS commercially-viable for both long-term storage and enhanced oil and gas recovery, similar to his CO2 Regulatory Certainty Act. Specifically, the senator’s legislation would align Internal Revenue Service (IRS) guidelines with current Environmental Protection Agency (EPA) regulations to reflect the operational and legal differences between using captured CO2 for enhanced oil recovery and geological storage, also known as Class II wells and Class VI wells, respectively, under the Clean Air Act and the Safe Drinking Water Act. The final regulations are expected to be released later this spring.
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