Utility giants planning to spend billions of dollars to move away from fossil fuels see the Inflation Reduction Act helping to reduce the cost of that transition as its customers grapple with high energy bills.
Executives with Duke Energy Corp. and American Electric Power Co. said they are still evaluating the totality of the potential savings. They foresee customers getting a break on their bills thanks to the clean energy tax credits and incentives provided under the law. Both utility owners plan to deploy massive amounts of new wind and solar energy to replace their aging coal power plants.
“This will buy down the cost of that transition with our customers,” Duke Energy Chief Financial Officer Brian Savoy said during an interview at the Edison Electric Institute Financial Conference in Hollywood, Florida.
While the act will shift those costs to US tax bills, the majority of the increases will fall to the top 1% of taxpayers, according to the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution.
Duke, one of the largest utilities in the nation, will provide a $56 million refund to its customers in Florida next year for solar production tax credits it will earn under the new federal legislation, Savoy said. Along with the renewable incentives, Duke can reap hundreds of millions of dollars of tax credits for its nuclear power plants in North Carolina and South Carolina, Savoy said.
American Electric Power Chief Executive Officer Nick Akins said the Inflation Act makes renewable power look “more attractive” to its regulators and customers because of the tax savings. “The act was really positive for the industry to move to a clean energy economy,” Akins said during an interview at the EEI event.
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