It isn’t much use now to debate how and why we ended up with the grotesque act of national self-harm known as HR1, aka “the Big Beautiful Bill.” The bill passed early this month with approval of Rep. Nick Begich III, Sen. Dan Sullivan, and a decisive yes vote from Sen. Lisa Murkowski. Here are some of the ways the bill will affect Inletkeeper’s mission of building clean energy and protecting clean water.
Energy
The bill cuts off Investment Tax Credits that would have lowered the cost of wind and solar projects by 30-50%, and Production Tax Credits that could have provided substantial reimbursement for generating clean energy.
The electric utility co-ops that power the Cook Inlet watershed (and almost all of Alaska) only just got access to these credits with 2022’s Inflation Reduction Act. Now, to qualify for the credits, they will need to have wind and solar projects under construction by July 2026 and operating by 2027, and meet rules on foreign materials that put high obstacles in the way of timely deployment. Previous versions of the bill would have added a prohibitive new tax on Chinese components, which appeared in the legislation without anyone knowing who drafted it. The bill we got is an improvement over what we could have gotten — in the way that being beaten with a two-by-four is an improvement over being beaten with a two-by-six.
The Railbelt stands to lose about $450 million from repeal of the Investment Tax Credit. For HEA, this credit could cover 40% of the cost of its landfill gas collaboration with the borough, as well as significantly stretching the dollars of a $100 million federal loan that the co-op plans to use to build solar capacity.
Nuclear, geothermal, and hydropower still qualify for the full credit until 2033, as they did under the Inflation Reduction Act. These power sources may help the Inlet region in the longer term, but as we struggle to conserve diminishing supplies of affordable Cook Inlet gas and avoid energy price spikes in the near term, wind and solar are the quickest and lowest-cost alternatives that we could deploy.
Inletkeeper will be pushing the utilities to get whatever projects they can built and running before the deadline. But looking to the future, increasing the cost of renewable energy development will make the already-difficult task of attracting needed investment for local renewables much harder. Even before the credits were actually cut, the New York-based Clean Capital pulled its investment from the planned Puppy Dog Lake solar farm in Nikiski, leading to the project’s collapse. The loss of energy tax credits “directly threatens Clean Capital’s ability to invest in new projects in Alaska,” the group’s president told New Energy Alaska.
The consequences of hobbling Cook Inlet’s renewable energy development are likely to be twofold:
– Burning more expensive Inlet gas. With the alternatives becoming more expensive, we will climb higher up the Cook Inlet gas price curve as our utilities struggle to meet their needs in the years before LNG imports arrive. Conserving gas is the only way to keep energy prices in check in the near term.
– Longer-term dependence on imported LNG. Imported LNG will cost more than today’s local gas. It will not lower our electric bills, only spare us from the absolutely prohibitive cost of drilling the hardest-to-reach Cook Inlet gas. Again, building local renewable alternatives to conserve gas is the only way to contain costs. With renewable costs higher and investment harder to attain, our dependence on the global gas market is going to be deeper, more prolonged, and more costly. Ironically for a bill signed on Independence Day, its practical effect will be making our energy independence harder to achieve.
As our energy system fights to stay above water, Alaska’s congressional delegates pulled away a life preserver and tossed us a cinderblock.
Water
HR1 stripped agencies of critical funding for pollution clean-up and climate disaster preparedness. This will force communities to table long-needed projects like flood mitigation infrastructure and port and harbor clean-ups. One of the most disturbing actions lawmakers took in HR1 was to streamline permitting for big polluters and weaken regulations protecting habitat and public health. They accomplished this by setting up “pay to play” regulations—a harmless-sounding but damaging choice for the public, and a resounding win for large corporations.
The “pay to play” regulations HRI sets up are new rules allowing corporations or government entities to pay a fee to expedite National Environmental Policy Act (NEPA) protocols – a key process for evaluating a project’s impacts on waterways or wetlands. Before a federal agency issues a permit, NEPA requires agencies to publicly assess these potential environmental impacts, and to make recommendations for lessening those impacts.
Under HR1, paying applicants can cut this process in half, guaranteeing a completed Environmental Assessment (EA) within 180 days or a more stringent final Environmental Impact Statement within one year. These significantly reduced timelines will water down all the components of the NEPA process that give opportunities to understand and prevent the potential environmental damage that a project could cause. Fast tracking public comment periods, tribal consultation, baseline data collection and analysis, and compliance with the National Historic Preservation Act and the Endangered Species Act cuts access, transparency and accountability off at the knees.
Now of all times, we can’t back down. It’s more important than ever to stay vigilant and submit public comments when the short opportunities to do so open. While we can hope to rely on the judicial system as a stop gap for bad permitting decisions, strong legal cases are built on a strong public record of concern, and when public comment periods are shrunk, so is the public record. Without your voices, we cannot win.
We will have our work cut out for us to mobilize our communities in short order, but we stay committed to defending Tikahtnu | Cook Inlet and the life it sustains. Our lawmakers may have turned their backs on safeguarding our clean water, healthy habitat and clean air, but Inletkeeper never will.