The Lignite Energy Council has been working for the past 18 months to join the Midwest Independent System Operator (MISO) and participate as a formal stakeholder in a MISO Advisory Committee sector to provide a strong voice for additional value for coal-based electricity. Today, MISO’s Advisory Council voted in favor of a proposal to create a new “affiliate” sector, which would provide the organization with unique market perspectives regarding reliability, cost allocation, resource availability and long-term planning. This is an important step forward for the Lignite Energy Council and other companies and associations – such as chambers of commerce, mining companies and trade associations – to having a “seat at the table” during this time of energy transition.
In other news, the Internal Revenue Service has released long-awaited guidance on 45-Q, a long-awaited guidance on carbon sequestration tax credits. In Notice 2020-12, the IRS provides guidance to help determine when construction has begun on a qualified facility or on carbon capture equipment that may be eligible for the carbon capture credit. In Revenue Procedure 2020-12, the IRS creates a safe harbor for the allocation rules for carbon capture partnerships similar to the safe harbors developed for partnerships receiving other types of tax credits. The IRS anticipates issuing further guidance in the near future on such issues as utilization of secure geological storage and recapture of credits.
Steps taken today by MISO and the IRS are important developments toward the long-term viability of the lignite industry. Improving the value of reliable generation sources in the marketplace will help maintain the resilience of the electric grid. And the IRS guidance will help companies engaged in carbon sequestration projects with important tax credits.