After the first round of budget discussions in the House of Representatives ended in failure, US energy lobbying organizations are regrouping in the hopes that the Senate would better understand their message about the financial advantages of clean energy tax credits.
However, a deeper change that has occurred over the previous several years is concealed by their setback this month: Compared to US President Donald Trump‘s first term, lobbyists are better funded now that renewable energy is a multibillion-dollar industry and conventional oil and gas and utility businesses are investing heavily in low-carbon technology. These groups’ ability to persuade will be tested during the budget negotiations.
Before the reconciliation package is put to a vote in the entire House, which is probably going to happen this weekend, it still has to clear a few hurdles. However, it lays out a somewhat bleak future for Inflation Reduction Act tax credits in their current form, with the majority of them being phased out early and subject to far tougher domestic sourcing restrictions. This is after weeks of berating Republicans about the credits’ job-creation and energy security benefits by a potpourri of K Street and advocacy groups that represent everyone from Big Oil to Big Solar.
Groups like the American Petroleum Institute are still not advocating for solar and wind credits, and the IRA’s general message of keeping as many tax credits as possible may be diluted if it expands to encompass the entire spectrum of energy subsectors.
Insiders anticipate that Sen. John Curtis (R-Utah) and Lisa Murkowski (R-Alaska) would carry out a large portion of the tough lifting in support of the IRA among their colleagues when the budget negotiations proceed to the Senate next month.
“Keeping stories about the benefits as local as possible is the most effective strategy to win over any colleagues who are still on the fence,”
said Lisa Jacobson, head of the Business Council for Sustainable Energy, a collection of trade groups and businesses. She said that because the credits are already being used extensively, it is simpler to implement that method now than it was before the IRA.
It is obvious to all parties involved in these discussions that the House will choose the most conservative version of the budget in order to start out strong against the Senate’s moderating influence. Furthermore, even though more moderate Republicans are starting to voice their support for the credits, none of the top House Republican leadership is prepared to use all of their political resources to support them at a time when every available dollar is needed to win more significant and, in the context of budget negotiations, more revenue-impacting battles over topics like Medicaid and the SALT local tax deductions.
