Bennet Welcomes Treasury Guidance Indicating Colorado Energy Communities Eligible for Inflation Reduction Act Tax Credit Bonus

Clean Energy Projects Located in Colorado Coal Communities like Craig, Hayden, and Pueblo Will Receive Additional Tax Benefits

Denver — Today, Colorado U.S. Senator Michael Bennet welcomed new guidance from the U.S. Department of the Treasury on the clean energy tax credit bonus for energy communities included in the Inflation Reduction Act (IRA). This bonus allows developers of clean energy projects and facilities to take advantage of an additional 10% value on top of the investment and production tax credits through the IRA for locating projects in a designated energy community. The guidance indicates that Colorado energy communities, including Craig and Hayden in Northwest Colorado, as well as key areas of Pueblo and other regions across the state, which have been home to critical energy extraction and production industries, are eligible for the tax credit bonus. 

Bennet also welcomed the U.S. Department of Energy’s (DOE) announcement making $450 million available through the Bipartisan Infrastructure Law to advance clean energy demonstration projects on current and former mine land, providing additional economic opportunities for historic coal and mining communities.

“Colorado communities like Craig, Hayden, and Pueblo have helped power our state for decades,” said Bennet. “When I’ve visited these communities over the years, I’ve heard concerns about what coal mine and power plant closures will do to our main streets, schools, hospitals, and way of life. Supporting them must be central to America’s energy transition, and we cannot wait until they face economic disaster to act. These tax credits are a key opportunity to create new jobs and spur economic development and diversification in these communities to help ensure they can achieve a prosperous future.” 

This announcement was made in partnership with the Interagency Working Group (IWG) on Energy Communities, which provided a searchable mapping tool that helps identify areas that may be eligible for the energy community bonus. The working group focuses on spurring economic revitalization, supporting workers, and creating new jobs in communities affected by the energy transition. Thus far, the IWG has focused particularly on regions grappling with the challenges from the closure of coal-fired power plants and coal mines and the lost local revenue for core public services.

Bennet recently led a letter with his Senate colleagues to the Appropriations Energy and Water subcommittee urging the inclusion of $8 million in its fiscal year 2024 appropriations bill to fund activities across federal agencies participating in the IWG, including $5 million under the DOE’s State and Community Energy Program.

Bennet has long championed investing in Colorado’s energy communities. Over the last few years, he has met with Northwest Colorado leadership including at a roundtable discussion in 2021 to discuss the challenges they face as a result of the announced closures of the coal-fired power plants in Craig and Hayden. These closures will result in a significant loss of revenue as part of their tax base, which supports core services such as hospitals and schools. In 2022, based on these discussions and ongoing input from local leaders, he introduced the National Energy Community Transition Act which aims to address these challenges by supporting economic development and diversification in communities across Colorado that have historically relied on fossil fuel-related power generation, production, or extraction.