H.R. 2160: Maintaining and Enhancing Hydroelectricity and River Restoration Act

This bill, named the Maintaining and Enhancing Hydroelectricity and River Restoration Act, aims to support the improvement and maintenance of existing hydroelectric dams in the United States. Its main goals include increasing clean energy production, enhancing the resilience of the electric grid, and improving river health along with wildlife habitats. Here are the key elements of the bill:

Tax Credits for Hydroelectric Improvements

The bill introduces a tax credit equal to 30% of the costs associated with enhancements made to hydroelectric facilities. This applies for improvements made after December 31, 2022. The types of improvements eligible for this tax credit include:

• Enhancements that add or improve fish passage at qualified dams.
• Improvements that maintain or enhance water quality from the dam.
• Upgrades that promote natural sediment transport to maintain river habitats.
• Repairs or modifications to ensure that dams meet federal safety and security standards.
• Improvements to public access and uses of waterways affected by the dam.
• Removal of obsolete river obstructions.
• Service activation of approved remote dams.

Definitions

• Hydropower Improvement Property: This refers to any property associated with the eligible improvements mentioned above.
• Qualified Dam: A hydroelectric dam that is licensed by the Federal Energy Regulatory Commission or legally operating without such a license prior to the enactment of the bill.
• Approved Remote Dam: A hydroelectric dam servicing non-connected communities, licensed before December 31, 2020, that does not cause air pollution, and has a maximum output of 20 megawatts.
• Fish Passage: Any new or upgraded technology aiding in fish migration and survival.

Elective Payment and Credit Transfer

The bill proposes a mechanism for taxpayers to receive payments in lieu of tax credits, allowing them to transfer tax credits related to the maintenance and enhancement of hydroelectric facilities. This means taxpayers have the option to elect to treat the credit as a payment.

Conforming Amendments

Several amendments to existing tax code provisions will be made to incorporate the new section on hydropower improvements into the Internal Revenue Code. This includes updating the definitions and relevant sections to ensure consistency with the newly established credits for hydroelectric facility improvements.

Effective Date

The provisions of the bill will be effective for properties placed in service after December 31, 2022, allowing hydroelectric facilities to initiate upgrades and improvements under this new framework.

Relevant Companies

• NEE (NextEra Energy) - As a major player in renewable energy, NextEra Energy could be impacted by opportunities to enhance their existing hydroelectric facilities, benefiting from tax credits.
• PCG (Pacific Gas and Electric) - This company may find opportunities to upgrade its hydroelectric dams, taking advantage of the tax incentives provided by the bill.
• DUK (Duke Energy) - Similar to other utilities, Duke Energy could leverage the provisions for enhancing their hydropower plants and improving reliability while gaining financial benefits from the tax credits.