Delaware HB 186: AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO BUSINESS TAX CREDITS AND DEDUCTIONS FOR ELECTRICITY PRODUCTION.

Bill Text

Legislation Document 

 SPONSOR: 

 Rep. Hensley & Rep. Osienski & Sen. Pettyjohn & Sen. Walsh 

 Reps. Collins, Dukes, Gray, Hilovsky, Jones Giltner, Morris, Postles, D. Short, Shupe, Michael Smith, Spiegelman, Vanderwende, Yearick; Sens. Buckson, Hocker, Lawson, Richardson, Wilson 

 HOUSE OF REPRESENTATIVES 

 153rd GENERAL ASSEMBLY 

 HOUSE BILL NO. 186 

 AN ACT TO AMEND TITLE 30 OF THE DELAWARE CODE RELATING TO BUSINESS TAX CREDITS AND DEDUCTIONS FOR ELECTRICITY PRODUCTION. 

 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE: 

 Section 1. Amend Chapter 20, Title 30 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows: 

 Subchapter XI. Electricity Production Tax Credit 

 § 2100. Definitions 

 As used in this subchapter: 

 (1) “ 

 Combined-Cycle Gas Turbine” (CCGT) means a generation facility 
 that incorporates gas turbines and steam turbines operating in a combined unit, using waste heat from the gas turbines to drive one or more steam turbines to produce electricity. 

 (2) “Electricity Production Tax Credit” (EPTC) means a per megawatt-hour (MWh) refundable and transferable state tax credit based on the production of electricity to be used against state corporate tax liability. 

 (3) “Microgrid” is a small-scale power network that can operate independently or in conjunction with the main electrical grid. 

 (4) “Qualifying CCGT generation facility” means a facility that is powered through the combustion of natural gas, hydrogen, or landfill gas and which meets the eligibility criteria set forth in § 2101 of this subchapter. 

 § 2101 
 . Qualifications for Eligibility. 

 Eligibility for the Corporate Tax Credit established under this subchapter shall meet all of the following criteria: 

 (1) The credit applies to up to three Combined-Cycle Gas Turbine (CCGT) generation facilities, as defined in this subchapter, operating within the State of Delaware. 

 (2) Must be powered by natural gas, hydrogen, or landfill gas. 

 (3) Must be complete and fully operational. 

 (4) Must enter service between January 1, 2027, and January 1, 2038. 

 (5) Must have a total generation capacity of between 100 Megawatts (MW) and 500 Megawatts (MW). 

 (6) Must have all relevant licenses and permits and meet all regulatory and statutory requirements for the operation of an electrical generation facility of the type described in this subchapter within the State of Delaware. 

 (7) The generation facility must deliver electricity to Delaware consumers through the regional power grid or a microgrid. 

 (8) Utilizes combined-cycle technology with a minimum efficiency rating of 50% or higher. 

 § 2102. 

 Electricity 

 Production Tax Credit 
 (EPTC), Structure & Corporate Tax Offset 

 (a) A base 

 Electricity 
 Production Tax Credit of $4 per megawatt-hour (MWh) shall be credited against state corporate tax liability. 

 (b) A bonus Electricity Production Tax Credit of $1 per MWh shall apply for facilities located on an industrial brownfield site or on the site of an existing power plant or the site of a previous power plant that has ceased operations within 10 years of the start of construction of the new CCGT facility. 

 (c) A bonus Electricity Production Tax Credit of $1 per MWh shall apply for facilities achieving an efficiency rating of 55% or higher. 

 (d) A bonus Electricity Production Tax Credit of $1 per MWh 
 shall apply to CCGT facilities integrating carbon capture technology. 

 (e) The tax credit and bonus credits authorized under this subchapter shall be fully deductible against corporate tax liabilities. If a company’s credit exceeds tax liability, it may: 

 (1) Carry forward unused credits for up to 10 years. 

 (2) Sell or transfer credits to other entities for a period of 10 years. 

 (f) The tax credits and bonus credits authorized under this subchapter shall apply for 10 years from the date of commencing commercial operation. 

 (g) The total value of the Production Tax Credit and bonus credits realized by the operator of a CCGT generation facility, including the sale and transfer of such credits, shall not exceed $15 million in any given tax year. 

 § 2102. Administration & Reporting Requirements 

 (a) Eligible entities must submit annual production and efficiency reports to the Public Service Commission to verify continued qualification. 

 (b) The Public Service Commission, the Delaware Division of Revenue, and the Department of Natural Resources and Environmental Control shall cooperate in overseeing program implementation and compliance. 

 SYNOPSIS 

 The purpose of this bill is to incentivize the construction and operation of a limited number of high-efficiency Combined-Cycle Gas Turbine (CCGT) electrical generation facilities, with an output of between 100 MW and 500 MW, by creating an Electricity Production Tax Credit (EPTC) and bonus credits. These credits would offset state corporate tax liability whi