Key House committees are marking up “One Big, Beautiful Bill” for the fiscal 2025 budget that includes much of President Donald Trump’s legislative goals, including clawing back funds and phasing out tax credits for clean energy. 

The House Ways and Means Committee on May 12 released proposed language that would axe the tax credits for energy-efficient and plug-in vehicles while winding down credits for renewable and nuclear energy earlier than current law. 

The production tax credit (PTC) and investment tax credit (ITC) for wind and solar already are in place until the later of 2033 or when CO2 emissions fall below 25% of 2022 levels. Under the bill, both would start to be rolled back in 2029. Projects put into service by Dec. 31, 2028, will be eligible for the full rates, but that will be cut back to 80% in 2029, 60% in 2030, 40% in 2031 and then expire entirely for 2032. 

American Clean Power Association CEO Jason Grumet criticized the early phaseout as causing disruption when the industry needs to meet surging demand. He promised to work with Congress to improve the language as the bill moves forward. 

“The Ways and Means bill is at odds with American energy dominance,” Grumet said in a statement. “If adopted, the proposed language will raise energy costs for American consumers, force American factories to shut their doors and threaten American jobs. While our industry is ready to engage constructively and find a workable path forward, the committee’s approach simply goes too far too fast.” 

Even without subsidies, some wind and solar would have been built, but the tax credits have expanded their capacity on the grid well beyond that hypothetical, American Enterprise Institute’s James Coleman said at a panel on Capitol Hill on May 6 hosted by the Electric Power Supply Association. The tax credits do not need to go to zero tomorrow, which would upset business plans, he said. 

“But I do think it’s a problem that needs to be phased out, addressed, lowered — something needs to be done there,” Coleman said. 

The 45U PTC for existing nuclear also would be wound down earlier, following the same schedule as the other tax credits. 

Provisions in the bill also would end the transferability for tax credits, which allows energy producers to sell them to third parties.

Speaking to analysts on an earnings call May 6, Duke Energy CEO Harry Sideris said the nuclear tax credits were most important to the utility. (See Duke Earnings Report Highlights Huge Investments to Meet Load Growth.) 

“Our well-run, low-cost nuclear plants earn over $500 billion in tax credits that go directly to reducing our customers’ bills,” Sideris said. “Nuclear has broad support in Washington, and we were pleased to see last week [that] 26 representatives signed a letter stressing the importance of these nuclear tax credits and transferability to the president’s objective of affordable and reliable energy.” 

The Natural Resources Defense Council criticized the bill after the text was made public. 

“This measure would hike energy bills, not lower them; cut domestic energy production, not increase it; and put workers out of jobs, not spur American manufacturing,” said Jackie Wong, NRDC senior vice president for climate and energy. 

The bill would immediately end energy efficiency tax credits, including the Energy Efficient Home Improvement (25C) credit and the New Energy Efficient Home (45L) credit. It also would end credits for individual consumers to buy new (30D) and used (25E) electric vehicles and the Commercial Clean Vehicle credit (45W). 

“Canceling these tax credits would raise monthly costs for American families and businesses,” American Council for an Energy Efficient Economy Executive Director Steven Nadel said in a statement. “This proposal would make it harder for homeowners to make energy improvements that lower their utility bills and improve their comfort. It would reduce builders’ incentive to construct efficient homes with low monthly energy bills. It would make it harder for individuals to use electric cars and businesses to use electric trucks, which can both lower monthly costs.” 

House Energy and Commerce’s Markup

The Energy and Commerce Committee also released language that includes clawing back some unspent funds from the Inflation Reduction Act and provisions meant to speed up permitting of natural gas infrastructure and electric transmission. 

“This bill would claw back money headed for green boondoggles through ‘environmental and climate justice block grants’ and other spending mechanisms through the Environmental Protection Agency and Energy Department,” committee Chair Brett Guthrie (R-Ky.) wrote in an op-ed published by The Wall Street Journal. “The legislation would reverse the most reckless parts of the engorged climate spending in the misnamed Inflation Reduction Act, returning $6.5 billion in unspent funds.” 

Those clawbacks would include funding for transmission, facilitation of the siting of interstate lines, and interregional and offshore wind electricity transmission planning. 

Language from Rep. Julie Fedorchak (R-N.D.) is meant to speed up cross-border pipelines and transmission. It would remove the process from the State Department and the White House and give FERC authority over siting pipelines and DOE over transmission, limiting the president’s power to overturn their decisions. 

“We need a cross-border permitting process that supports investment and infrastructure — one that can’t be undone by the stroke of a pen,” Fedorchak said. “North Dakota has long worked with Canada to develop and transport reliable energy, and this bill strengthens that partnership while ensuring the U.S. remains a leader in energy production. This legislation gives energy producers the green light to move forward with certainty and will help us deliver reliable, affordable energy to American families, farmers and businesses who depend on it every day.”  

The bill would allow pipeline developers to speed up their review process before all federal agencies by notifying FERC in their application and paying the U.S. Treasury the lesser of $10 million or 1% of the total project cost. The approvals would have to be completed within a year, with agencies able to ask FERC for an additional six months “if the commission receives consent from the relevant applicant.” 

Developers of LNG export and import facilities would have to pay $1 million in a fee collected by the Secretary of Energy, who then would be required to find the application in the public intertest. 

Other language in the bill would clear up a longstanding issue, giving FERC jurisdiction over interstate pipelines meant to carry carbon dioxide and hydrogen. 

The bill also would limit who can sue for judicial review of natural gas permits, the NRDC said in a statement. 

“While it slashes much-needed support for clean energy and climate resilience, it would allow fossil fuel companies to pay to get their project approved,” NRDC Chief Policy Advocacy Officer Alexandra Adams said in a statement. “That’s not just wrong; it’s un-American. Congress should reject this radical bill that would harm the health and welfare of the American people.”