Congressman Bill Pascrell today applauded the Biden Administration for expanding eligibility for an Inflation Reduction Act tax incentive that will support and stimulate more offshore wind projects. This decision follows the urging of Congressman Pascrell, as well as Reps. Joe Courtney (D-CT-02), Seth Magaziner (D-RI-02), Jim Himes (D-CT-04), and 48 other Members of the U.S. House of Representatives.

“The historic Inflation Reduction Act enshrined the largest investment to fight climate change in U.S. history,” said Congressman Pascrell. “Part and parcel of that investment is an expansion of offshore wind energy and this announcement today signals an urgency to meet the moment. President Biden and Congressional Democrats together are committed to America’s world-leading clean energy future.”

“This is game-changing news for southeastern Connecticut that follows my direct calls to the Department of Treasury and Deputy Secretary Wally Adeyemo. Expanding eligibility for the Energy Communities Bonus Credit rewards offshore wind companies who have chosen to locate their projects in Energy Communities and will incentivize future offshore wind projects to select locations like the State Pier in New London to conduct business,” said Rep. Courtney. “Today’s announcement, coupled with the offshore wind projects already taking place in the Long Island Sound, will further cement our region’s leading role in clean energy production which is good for the economy, homeowners, and our climate.”

“Offshore wind has tremendous potential to create jobs, drive the transition to clean energy, and lower energy costs for working people,” said Rep. Magaziner. “The Treasury Department’s guidance will drive investment in frontline communities directly affected by fossil fuels, while also helping protect ratepayers in new offshore wind solicitations, like Rhode Island’s upcoming procurement.” 

The Inflation Reduction Act provides an extra tax incentive (the Energy Communities Bonus Credit) for projects that boost clean energy in communities (“Energy Communities”) that have experienced job loss, economic distress, and serious health ramifications because of proximity to brownfields or the construction and/or closure of coal and gas-fired power plants. Until today, the Treasury Department provided a limited path for credit eligibility for offshore wind projects based on where the offshore wind turbines connect to the existing onshore power grid, also known as the primary Point of Interconnection. Offshore wind projects that select ports or secondary Points of Interconnection located in Energy Communities previously were not eligible for the Energy Communities Bonus Credit, despite bringing economic investment and new job opportunities to economically distressed areas.

Today’s guidance now permits offshore wind facilities to attribute their nameplate capacity to additional property—namely, to supervisory control and data acquisition system (SCADA) equipment that are owned by the owner of the offshore wind project and are located in eligible ports. This change reflects the fact that onshore SCADA equipment at ports is critical to offshore wind projects and that offshore wind projects make significant investments and create jobs at these ports over the duration of the projects, which is the goal of the energy communities bonus. In addition, the guidance clarifies that where a project has multiple points of interconnection, under this guidance, those projects may now look to any land-based power conditioning equipment up to those points of interconnection for purposes of determining energy community status