U.S. Senator Bob Casey, a representative from Pennsylvania affiliated with the Democratic party, has introduced a new initiative aimed at designating certain Pennsylvania communities as “energy communities.” This classification is based on his provision within the Inflation Reduction Act. The primary goal of Senator Casey’s effort is to encourage the development of fresh energy projects within these communities. The strategy involves offering tax credits to companies willing to establish and operate energy-related ventures in areas that have historically been associated with powering the nation.
Highlighting the historical significance of coal communities in powering the nation since the Industrial Revolution, Senator Casey underlined the suitability of these areas for new energy-related employment opportunities. He emphasized the potential for clean energy projects to thrive in these communities, bolstering local economies through job creation and attracting fresh investments.
The implementation of Senator Casey’s tax credits has been actively pursued by the Biden Administration. To assess the impact and effectiveness of these credits, the Senate Finance Committee organized a hearing in May 2023. As part of the proceedings, Senator Casey invited Patty Horvatich, Senior Vice President of Business Investment at the Pittsburgh Regional Alliance, an affiliate of the Allegheny Conference on Community Development, to provide insights. Ms. Horvatich presented compelling testimony on how Southwestern Pennsylvania is well-positioned to compete for energy and manufacturing investments. She indicated that the newly introduced incentives were already prompting increased interest from businesses considering investment in the region.
Outlined within the Inflation Reduction Act, the bonus tax credit entails a value equivalent to 10 percent of the expenses associated with implementing a clean energy project within an energy community. These energy communities are defined as locations that include brownfield sites, areas with notable fossil fuel employment, or specific census tracts, including those adjacent, that have recently seen coal mine or coal plant retirements. The tax credits themselves are overseen by the Treasury Department and the Internal Revenue Service, with collaborative involvement from the Department of Energy. Interested parties can find further information on eligibility and the bonus credit application process through the Treasury Department’s official announcement.
For a visual representation of the potential areas in Pennsylvania that might qualify for the Energy Communities Bonus Credit, please refer to the accompanying map.