Manchin U-Turn May Mean More US Nuclear Subsidies

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Joe Manchin

Washington's influential centrist Democrat Sen. Joe Manchin of West Virginia this week surprised his fellow party members with a compromise on energy and climate legislation labeled the "Inflation Reduction Act" — revised from the previous "Build Back Better Act.” Unveiled late on Jul. 27, the new bill includes a $15 per megawatt hour production tax credit for existing nuclear plants, with offsets for higher realized revenue from electricity prices and government subsidies and bonuses for meeting prevailing wage standards. The tax credit takes effect as of December 2023. But unlike prior iterations of the nuclear production tax credit provision that only extended the credit to 2026 and 2027, the new legislation would extend the credit to December 2032. The bill would also allow advanced nuclear reactors to qualify for an investment tax credit beginning in 2025, and allocate $700 million to the Energy Department's effort to procure high-assay low-enriched uranium for advanced reactors.

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