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Transmission Deployment

Today’s network of transmission and distribution equipment still includes components from over 100 years ago. Varying age, condition, and capacities make it difficult to provide reliable power, and unreliable equipment, severe weather, and overloading can all cause power disruptions and damages to electric equipment. Unfortunately, as climate change gets worse, so does the problem. More than half of major power outages between 2000 and 2016 were caused by natural hazards such as hurricanes, heat waves, and wildfires. 

Building on the $2.5 billion included in the BIL for transmission build out, the Inflation Reduction Act provides an additional $2 billion for new construction of high-capacity transmission lines. The Inflation Reduction Act also includes $760 million in grants to facilitate the siting of interstate transmission lines, and $100 million for offshore wind transmission planning. Investing in transmission and electric infrastructure is an excellent opportunity to put people to work in the clean economy. Most of the jobs associated with transmission construction and operations and maintenance are already union jobs. New federal investment going towards the upgrading or construction of new lines should continue to reinforce these high-road, family-sustaining jobs. This can be done by strategically targeting funding for projects utilizing high-road labor standards, such as PLAs. Additionally, investments passed in the Inflation Reduction Act can support good jobs across the supply chain through utilization of domestically sourced materials for the construction of high-powered transmission lines. 

Prioritization should be given to  projects that upgrade or construct new interregional transmission lines as well as transmission projects that increase connectivity of renewable generation. According to the Americans for a Clean Energy Grid, the interconnection of our nation’s transmission system must be increased drastically in order to supply a resilient, nation-wide grid. Further priority should be given to  projects that reduce the renewable generation queue, which currently has 930 gigawatts of clean energy waiting to be connected to the grid. This also includes preparing and building infrastructure to support the vast amounts of future offshore wind deployment. The additional $100 million of funding for offshore wind planning will support the analysis needed to ensure new offshore funding projects. 

Further, the Inflation Reduction Act invests $9.7 billion for rural electric co-ops to transfer their generation to renewable energy sources. This will allow for rural communities across the country to finance and transition to renewable energy, fortify electric infrastructure, and ensure reliability for rural ratepayers. This provision is also subject to prevailing wages and will create good-paying jobs across the country.

Buildings

The buildings sector sits squarely at the intersection of climate change, income inequality, and racial inequity. 

The building sector’s impact on climate change is undeniable. In 2019, 13% of U.S. greenhouse gas emissions came from direct emissions of the buildings sector, primarily from heating and cooking. When electricity consumed by the end user—indirect emissions—is factored in, buildings account for 31% of total U.S. greenhouse gas emissions. 

The buildings sector is also one of the most visible examples of racial inequity in the nation. In the United States, people of color are disproportionately impacted by unsafe, hazardous, and energy inefficient housing and schools. People of color are more likely than their white counterparts to live in low-income households and live in high-poverty communities. In addition, they are likely to spend up to half of their income on rent and often spend three times as much on energy as their white counterparts. This energy burden is in part because they are more likely to live in older, less efficient housing resulting in higher energy bills.

Investments in constructing or retrofitting healthy, energy efficient, and climate resilient buildings will drive down the emissions causing climate change and take steps to address the systemic racism pervasive in the public buildings and housing sector while creating good-paying union jobs and fighting income inequality.

The Inflation Reduction Act includes a number of provisions that will improve the energy efficiency of our nation’s buildings, including multi-family housing, schools, and commercial buildings. Tax incentives for residential and commercial use were extended ten years as well as expanded to increase eligibility and value to taxpayers. This includes a commercial tax deduction for energy efficiency from which tax-exempt institutions, such as schools, are now able to benefit. Schools can take advantage of this new eligibility by partnering with energy savings performance contractors that can take the tax credit and pass on the savings to school districts. The tax credits pertaining to commercial buildings and multifamily housing also come with the same strong labor standards described in the clean energy section of this site, including prevailing wage and apprenticeship requirements. Knowing these tax incentives will reliably be in place for the next ten years will further incentivize the manufacturing and installation of energy efficient products. 

Schools can also benefit from the clean energy tax credits discussed above. Schools are eligible to receive direct payment—effectively grants—for clean energy projects. Because energy use is one of  the highest budget items for schools—second only to staff salaries—there is a huge opportunity to significantly reduce energy expenses through clean energy projects and direct those savings to other needs within the school. This could include employing Energy Savings Performance Contracts to fund school retrofits which would, in turn, save schools even more money.  

In addition to the new eligibility criteria for schools receiving energy efficient tax deductions, schools are eligible for two additional funding streams. The EPA was allocated $50 million to address indoor air pollution in schools. This could include the removal of airborne legacy toxics—such as Polychlorinated biphenyls (PCBs) and asbestos—that are often in older school buildings often located in disadvantaged communities. There is also opportunity to address energy efficiency, health, and climate resilience in schools with the $3 billion that is allocated for Climate and Environmental Justice Block Grants. 

The law also includes grant funding to improve energy efficiency, safety, health, and affordability of homes. For example, it includes $4.3 billion for whole home retrofits, such as improved insulation, and $200 million for contractor training for energy efficiency improvements. It also includes $1 billion for energy efficiency, water efficiency, and climate resilience in affordable housing. These investments in residential energy efficiency complement the historic investment made in the Weatherization Assistance Program and the Low-Income Home Energy Assistance Program in the BIL. The sum of these programs will translate into lower energy bills for households, quality jobs in the community, and reduced emissions that significantly move us towards our national climate action goals.

In addition to its focus on residential buildings, the Inflation Reduction Act also includes $250 million to retrofit federal buildings and $1 billion in investments to upgrade building codes. In conjunction with BIL funding for federal buildings and building codes—and $250 million to EPA to enhance environmental reporting criteria for building products—these investments will send strong market signals for the jobs and manufacturing that accompany the installation and use of these energy-efficient products.