WHAT'S ON YOUR MIND
By Scott Hennen
Host of “What’s On Your Mind?” Radio Show
heard on the Flag Family Network including KTGO 1090AM
in Watford City, Williston and Tioga, North Dakota
No region does more to fuel the U.S. economy than the Midwest, yet rural communities are so often shortchanged and unrecognized.
However, with the July 4 passage of the One Big Beautiful Bill, Congress and President Trump established a market-based solution. It’s called “45Z” - a tax credit for American fuel production that could bring billions of dollars in private capital to farmers and the rural power grid.
When I say “the grid,” I of course mean more money for new Midwest power plants. But I also mean more money for the linemen - the unsung heroes of the American energy industry.
You might wonder how a tax credit for fuel would be related to linemen or power plants. Fuel production requires electricity. When fuel producers show that they are using clean American energy, such as nuclear, hydro, or solar, they earn a larger 45Z tax credit. The larger the 45Z credit for fuel producers, the more private capital flows into the Midwest grid.
President Trump and Congress created a framework that allows private markets to invest in rural grid infrastructure at a moment when more investment is sorely needed. The 45Z grid capital structure is based on two things: raw electrical power and energy data.
To make a 45Z filing, fuel producers document their production inputs, such as crops and electricity. For electricity, fuel producers enter into special contracts with American power plants. These contracts, called energy attribute certificates, or EACs, contain granular energy data to support a 45Z claim. This data is tracked on a public ledger, similar to how transactions are tracked on blockchain systems.
Because Midwest power plants can generate additional revenue by selling data-backed electricity contracts, and fuel producers want to buy those contracts to increase their tax credit value, these arrangements could result in billions of dollars in new private investment flowing into the rural power grid.
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