Dive Brief:

• More than 180 House Democrats called on House leadership to include tax credits for clean energy, residential electrification and commercial and residential energy efficiency improvements as part of an infrastructure package moving through Congress.
• The Senate on Tuesday passed a $1 trillion infrastructure bill that includes $73 billion in grid modernization and $7.5 billion to build electric vehicle chargers. The bill passed in a 69-30 vote with the support of 19 Republicans and now must pass the House. 
• Democrats have also teed up a $3.5 trillion budget reconciliation package that will include a clean electricity payment program, a clean energy technology accelerator, consumer rebates for electrification and clean energy tax credits, according to a summary released by Senate Democrats. The Senate passed the resolution 50-49 on Wednesday morning before the chamber adjourned for summer recess.

Dive Insight:

The $1 trillion bill passed by the Senate Tuesday, titled the INVEST in America Act, was the result of months of negotiations between Republicans and Democrats and represented a step back from the ambitious agenda first introduced by the Biden administration. The final version of the bill did include funding for electric transmission improvements, including the creation of a Grid Deployment Authority to oversee electricity grid upgrades, plus additional siting authority for the Federal Energy Regulatory Commission. The bill would also spend more on nuclear power and carbon capture technology.

However, the bill included less money that the administration had originally proposed for clean energy, climate resilience and removed some energy tax credits, including a production tax credit for energy storage that the Biden administration had proposed. That left some environmentalists cool, with critics saying the bill does not reflect the scale of investment needed to tackle climate change. 

"We welcome the bipartisan package because it will result in critical contributions toward building the clean economy of the future, setting the stage for the bold initiatives and additional policies that are necessary to prevent the catastrophic human and economic impacts of the climate crisis," Anne Kelly, vice president of government relations at Ceres, said in a statement. "But Congress must take further action soon to confront the crisis directly and build a stronger, more just, and more competitive U.S. economy."

House Democrats must still pass the INVEST in America Act and could make changes to the bill. Progressives, for example, have said they’d like to see more funding for climate programs and clean transportation, either in that bill or in the larger reconciliation package. 

In their letter to House leadership, the Democrats — led by Reps. Earl Blumenauer, D-Ore., Nanette Diaz Barragán, D-Calif., Jason Crow, D-Colo., Mike Levin, D-Calif., and Donald McEachin, D-Va. — called for the inclusion of a suite of clean energy tax incentives in a final infrastructure bill. Specifically, the letter calls for long-term extensions and expansions to the production tax credit and investment tax credit to fund renewable energy projects, extensions to incentives for energy efficiency and expanded tax incentives for clean transportation and alternative fuels. The Democrats also say the bill should support domestic clean energy and transportation manufacturing. 

"The importance of clean energy tax policy is made even more apparent and urgent with record-high temperatures in the Pacific Northwest, unprecedented drought across the West, and the impacts of tropical storms felt up and down the East Coast," they wrote.

The $3.5 trillion budget reconciliation package, which the Senate began voting on Tuesday, includes more ambitious climate and clean energy provisions. An outline released by Senate Majority Leader Chuck Schumer, D-N.Y., includes clean energy tax credits. In a statement, Senate Finance Committee chairman Ron Wyden, D-Ore., said the Clean Energy for America Act would be the "linchpin" of the efforts. That bill would overhaul energy taxes to create a clean energy production tax credit worth 2.5 cents per kWh electricity produced and creates a 30% investment tax credit for grid improvements, among other provisions.

As part of the budget reconciliation package, the Senate also adopted a non-binding amendment 90-9 that would block renewable energy projects from purchasing materials produced in China, if they receive federal funds or subsidies. In another non-binding vote, the Senate unanimously rejected enacting the Green New Deal.

The budget package gives the Energy and Natural Resources Committee $198 billion. That committee’s section includes a Clean Energy Payment Program, a form of a clean energy standard that would use fines and payments to incentivize utilities to adopt renewable energy. The Energy Committee language also includes additional weatherization rebates for consumers, financing for domestic manufacturing of clean energy materials and federal procurement of energy efficient materials. 

In addition, the reconciliation package includes $67 billion for the Environment and Public Works Committee, including a Clean Energy Technology Accelerator to fund solar energy for low-income communities and other new technology. The committee’s section also includes environmental justice initiatives, federal investments in energy efficient buildings and materials and spending on clean vehicles. 

The funding offsets include a fee for producers of methane emissions and a carbon polluter import fee, which would raise tariffs on imports from countries that do not have aggressive climate plans. 

In a statement, Edison Electric Institute (EEI) president Tom Kuhn praised the passage of the Senate infrastructure bill, saying it would "make significant investments in the critical energy infrastructure and new carbon-free technologies we need to deliver a 100% clean energy future to the customers and communities we serve."

"Achieving this will require new, affordable, 24/7, carbon-free technologies, and this legislation significantly would boost research, development, demonstration, and deployment funding for these new clean energy technologies," Kuhn said.