The 2-year budget bill passed last night extends the Nuclear Production Tax Credit.
The 2005 Energy Policy Act provided a tax credit of 1.8 cents per kilowatt-hour for electricity produced from new reactors, but set a deadline of 2020 for the plants to be in service. The new bill removes that deadline, which would ensure that the two Westinghouse AP1000 reactors being built at Southern Nuclear Operating Company's Vogtle site in Georgia could benefit from the credit.
[Note: The Center worked diligently for the passage of the Energy Policy Act of 2005, and particularly for the inclusion of the Nuclear Production Tax Crecit, and was invited to attend the signing of the legislation as a Special Guest of The White House in Albuquerque, New Mexico].
Unforeseen events—the Chapter 11 filing by Westinghouse, regulatory delays associated with first-of-a-kind engineering projects, and Fukushima—will result in the units coming online after 2020, therefore missing the opportunity to receive the PTC.
The tax credit is applicable to the first 6,000 megawatts of new nuclear capacity that come online. The completion of Vogtle 3 and 4 will leave a significant amount of remaining capacity that future small modular or advanced reactor projects will be able to access.
The small modular reactor design closest to construction is from NuScale Power LLC, which in January became the first to submit a design certification application to the U.S. Nuclear Regulatory Commission. NuScale plans to build a first commercial power plant at the U.S. Department of Energy’s Idaho National Laboratory, owned by Utah Associated Municipal Power Systems and operated by Washington state-based utility Energy Northwest. It is expected to begin commercial operations by 2026. (NEI, 11/2/2017, Background/NEI, Greentech Media, 2/9/2018)