Duke Energy to pass first $56 million wave of Inflation Reduction Act tax credits to customers

Dive Brief:

Duke Energy has filed to offer customers in Florida a refund on their electric bill to reflect tax credits the company will receive retroactively under the Inflation Reduction Act.
Five Duke Energy solar sites in Florida will qualify for tax credits under a provision of the IRA that allows refunds on certain renewable energy projects placed into service after Dec. 31, 2021.
Duke Energy expects to receive an initial tax credit of $56 million that will reduce residential customer’s rates by about 1%, according to a company spokesperson. The company plans to pass any additional tax credits received under the IRA on to customers.

Dive Insight:

Duke Energy hopes to offer customers in Florida — and possibly elsewhere — an unexpected Christmas gift, courtesy retroactive provisions of the IRA.

The company announced Monday that it will qualify for a $56 million tax credit that it hopes to pass on to customers in the form of a cut to residential rates worth $1.90 per 1,000 kWh, beginning in January.

Ana Gibbs, a spokesperson for Duke Energy Florida, said the company aims to pass all savings it receives under the IRA on to customers, though filings will need to be made with state utility regulators on a case-by-case basis as the company determines which of its renewable energy projects are eligible for tax credits under the law.

“Here in Florida, our customers have faced a variety of financial hardships,” Gibbs said. “Most recently it’s been Hurricane Ian, and I think everyone is familiar with Covid. So Duke Energy looks at creative ways to help our customers and this is one of the ways. We think every little bit helps.”

Gibbs said the $56 million comes from nine solar units, all currently under construction or already operational, that will qualify for the new tax credits the IRA creates for renewable energy projects that offer apprenticeships and meet prevailing wage requirements. This credit can apply retroactively to some projects, and Duke Energy has placed five solar units into service in 2022 that will meet the criteria, Gibbs said.

“Customers will receive every dollar from the Inflation Reduction Act,” Gibbs said.