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A conversation with Bob Moczulewski, tax director for Baker Tilly’s federal credits and incentives practice

Given the Trump administration’s new pause on grants under the Inflation Reduction Act, this week’s conversation is with Bob Moczulewski, tax director for Baker Tilly’s federal credits and incentives practice. We asked him to explain this 90-day pause via executive order, because if anyone’s going to cut the nonsense and tell you what actually matters here, it’ll be a tax expert.
The following chat was lightly edited for clarity.
Does Trump’s executive order actually impact the IRA’s tax credits?
The IRA had several components to it, most of which – the biggest things – are tax credits. Those are written into tax law. They are a legally binding ability for developers and users, creators of renewable energy that are allowed within the law – wind, solar, geothermal, battery storage, biogas – those are laws.
[The order] has a stop on those items that were more discretionary that had the control of the administration to delegate out: its grants, loans, and contracts. That has no impact on the tax credits, where the bulk of the IRA sits right now. A lot of that stuff was in anticipation of being heavily pushed through and sent out before January 20. There’s actual impact there. But tax credits are not appropriated funds.
This is not holding back the tax credits that are there.
You’ve said it is unclear if this covers all prospective funding, like direct pay?
If you’re a municipality and you put up a solar project that is eligible for tax credits and direct pay, that is the part with this potential slow play that could be done here. We really don’t know what the executive branch can do to hold back the payment of those direct payments. If you’re a business, you put up a solar, it’s a $10,000 tax credit, you can use it to reduce your taxable income. None of these orders impact that.
Now if you’re a municipality and you’re requesting a direct payment for those tax credits that are legally binding in tax law, I could see the possibility that an executive branch could have pressure on the Treasury Department, which has pressure on the IRS, to slow play those payments. But that’s only speculation. The law is stated, this is supposed to be paid out. This is in a realm of, y’know, almost a conspiracy theory-type of thing that could be done.
With respect to how a pause like this can impact the bankability of IRA, are you seeing it affect executives’ views on the durability of the law?
I would say there’s just a lot of caution as to [the] next steps around it. These are laws. Until the laws are repealed, if they are repealed, that would be the only way you’d know for certain.
As I’ve explained many times over, the history of tax credit laws is once they’re repealed or altered, those changes are prospective as to the time the law is changed. If I have a half a billion dollar solar project underway, I’ve met or begun a construction criteria. There has been no prior passing of tax laws that would revoke the ability to claim credits on that.
What are you watching for next for clarity?
There’s two things I’m looking for in the future. Where pundits around this really feel this is truly going. And the other part is to see if there’s any actual traction to repeal the tax credits that exist right now.
There’s a whole new realm of credits that begin in 2025 and continue through 2032. Will there be incentive to repeal those credits?
I have clients that are engaging in multi billions of dollars of projects that are in the heart of the southern tier of the United States of America, that would impact thousands of jobs. Those groups have strong ties to a lot of senators and congresspeople along the way. Just enough of a push and turn on this and all it takes is a few senators to not go along with it.
Editor’s note: A previous version of this article misidentified Moczulewski’s profession. He is a CPA, not an attorney. The article has been corrected. We regret the error.
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Exploratory projects are making a splash in Maine and Alaska.
A legal brawl is brewing over what could be the nation’s first underwater data centers.
Two subsidiaries of a new LLC named DeepGreen have applied for “preliminary” permits from the Federal Energy Regulatory Commission that would give four years of permission for studies and analysis towards constructing underwater data centers off remote coastlines in Maine and Alaska. The data centers as proposed would be powered entirely by tidal energy, as in, the power of waves themselves – a technological innovation from hydropower still being piloted around the world. Project descriptions submitted to FERC lay out what these data centers would look like in broad strokes: hundreds of hydrokinetic turbines, dozens of underwater “data center pods,” and miles of subsea cable. The permits would not authorize construction, which would need its own lengthy review process. But these early green lights would tee both areas up for years of potential conflict over hypotheticals that feel real to those on the ground.
There are upsides from purely a carbon emissions perspective. Relying on tidal energy suggests they’d be greenhouse gas-free, powered by the energy of the ocean. It would also eliminate the land use problem that upends so many AI data center projects. There are also clear environmental risks, as they’re also being suggested in ocean areas often coveted for protection, off coastlines where it’s unclear if the neighboring communities will accept them.
DeepGreen’s Alaska project is proposed within a more than 1,000-acre channel of the Cook Inlet, an estuary coveted by fishermen and wildlife conservation advocates, where fights over resource development already occur often. The upstart company’s Maine project is planned for the northernmost tip of the state, in the Bay of Fundy, which shares a transnational border with Canada. Canadian tidal power generation for the general populace marginally exists today in the Bay of Fundy – with major stipulations for marine life protection because it affects the general nature of water currents.
It’s crucial to note neither project has much information available online, sans brief text file project descriptions available through FERC’s online filing database. There is no public-facing website to date for the project, or for DeepGreen itself. When I contacted Louis Wolfson, a vice president at the company who is listed on company filings, he declined to talk about the developments over the phone and suggested I contact him at an email address listed in FERC application documents. That email address uses a website – “DeepGreenCoastal.com” – that does not seem to exist.
Still, we already know enough to say both development areas are likely to require substantial federal review. Not only does their presence in these waters almost necessitate it but both development areas receive considerable whale traffic. DeepGreen has already acknowledged a need to coordinate passive acoustic monitoring and “non-invasive study methodologies” with the National Marine Fisheries Service, the federal marine protection agency run out of NOAA. The Bay of Fundy is a prominent summer home for the endangered North Atlantic Right Whale and the National Marine Fisheries Service has already intervened in the FERC case for the Maine project, signalling in its filing that Endangered Species Act and fish habitat consultations “may be necessary for the project.”
The Center for Biological Diversity has also filed motions to intervene in both FERC cases, which they tell me is a prelude to potential litigation. “Putting one of these in the ocean just seems like a dystopian nightmare but it was especially alarming because of the areas they want to put these in,” Kristen Monsell, CBD Oceans Program Litigation Director, told me in an interview. “[The motions] are a step required in order for us to participate in the permitting process at FERC and then preserve our ability to challenge the decision in court if we think that’s necessary.”
In Maine, the coastline neighbors are the city of Eastport, which is vociferously opposed to this data center being built. The city passed a moratorium on data center development in response to the project and filed a request to intervene in its FERC case this week. “The City's concerns include potential effects on fisheries, marine habitat, water quality, currents, sediment, underwater noise, electromagnetic fields, equipment heat, existing uses of the waterway, and access to marine resources,” the city stated. “Questions also remain about equipment failure, storm damage, emergency response, equipment recovery, site restoration, and eventual decommissioning. These concerns are specific to the proposed placement and extended operation of computing and energy infrastructure on and beneath the seabed.”
In Alaska, DeepGreen doesn’t face a situation like Eastport with a bustling tourist destination-turned-nemesis, but there’s still quite a bit of local confusion and consternation.
The Kenai Peninsula Borough, which is the equivalent of a county-level government, is currently neutral on the development. But the Alaska Commercial Fisheries Conservation Alliance, a newly-formed nonprofit that includes fishing permit holders in the Cook Inlet, submitted a filing to FERC claiming the project site doesn’t properly take into account existing fishing permit holders and that “a preliminary permit proceeding that advances a project of this scale without any commercial fishing impact assessment” would fail the agency’s public interest obligations.
I asked DeepGreen if it had any comment on the litigation risk around their projects. This is what Louis Wolfson provided: “Preliminary permits under the Federal Power Act do not authorize construction or physical disturbance. Their sole purpose is to establish priority while environmental, bathymetric, and technical feasibility studies are conducted. Stakeholder participation is an expected and healthy part of the FERC regulatory process. DeepGreen welcomes the engagement of conservation organizations, local communities, and regulatory resource agencies as we evaluate whether these sites can deliver low impact, zero carbon infrastructure in full compliance with federal environmental laws."
And more of the week’s biggest fights around project development
1. Ottawa County, Michigan – A congressional district House Democrats are targeting for control of the Lower Chamber is now a battleground over solar development on farmland, and I’m waiting to see if President Trump gets involved.
2. Texas – The Lone Star State sure is action-packed right now, huh? Let’s break down a few of the most important fights.
3. Lincoln County, Oklahoma – A massive wind project in rural Oklahoma is now on hold amidst continued local opposition, according to a Republican member of the state legislature.
4. Clinton County, Indiana – Well hey, at least some places are still approving some things. Like in rural Indiana, where a community actually voted for considering a data center.
A conversation with Josh Freed of Third Way
This week’s conversation is about the big energy policy story of the week – month? year? – which is the new bipartisan permitting deal in the U.S. Senate. As my colleagues and I were feverishly working on our mega-explainer about the bill, I rang up Josh Freed, founder of Third Way’s energy and climate program, who graciously picked up the phone despite traveling in London. Freed, a fellow energy wonk-slash-musician, was gracious to jam out with me on all the things I felt you needed to know about this bill – including whether there really is only one shot to get what he believes would be landmark legislation into law.
The following chat was lightly abridged for clarity. Let’s dive in.
Let’s start with descriptions. Thomas Hochman, a friend of Heatmap News, published a lengthy blog about the new bipartisan Senate permitting bill in which he describes it as a “grand bargain.”
Do you agree with that description?
No. See, it’s so funny, I saw that description as well and I think over the years I’ve soured on the concept of ‘grand bargains.’ But it’s hugely significant.
Okay. If it’s not a ‘grand bargain,’ how would you describe it?
Well the problem with a ‘grand bargain’ is it assumes there’s all these trade-offs and everyone gets a little bit of something. But the reason I think it’s just significant, and not that, is it took the transmission architecture that Manchin-Barrasso had that was close to passing and built it out for current load growth. That’s a big deal given how much the transmission side has been a blockage in the system. And how much they dealt with the permitting of infrastructure, generally.
When we did our survey of over 200 project developers a little over a year ago, we were surprised at how much that was what they were concerned about – transmission and permitting of utility-scale solar. They’ve added those two things into the bill. So we’ve got consequential transmission permitting provisions and steps to add a lot of certainty, while shortening the window where objections based on those laws can pop up. This means a lot more is likely to be built and it’s very likely that’ll be clean.
There’s infrastructure with fossil fuels that’ll be built. We get that. But when costs are so high, that’s also sort of inevitable. The overall proposal is more of a win to build than a bargain.
Does the language in this bill adequately address Trump’s freeze on federal permits for renewable energy projects?
I think it is a really important step in the right direction with permitting certainty for solar and wind but this question with national security, and making sure this gives the certainty that these projects will ultimately be delivered… I just genuinely don’t know. But we need to make sure it's sufficiently airtight. Is this the best, most reasonable attempt to do this? That’s the question that needs to be answered.
The combination of permitting certainty and anti-discrimination language barring the executive branch from category wide attacks on offshore wind or solar are steps that need to be taken. At some point we’re all going to have to take the step off the cliff together and see what happens next because we’re getting as good as we’re going to get, presuming the administration will follow the law. If they don’t follow the law, there’ll be actions to be taken to get them back on track.
But this is what you have to do, because otherwise, everything’s still broken. At least it gives us additional mechanisms to keep them in line.
Do you think this has to happen before the next Congress convenes?
The most likely time for action is the lame duck period in Congress. I think there’s a slim chance you could see something happen next year but it’s impossible to predict how likely that chance is or what it would look like until we see the election results. I wouldn’t want to gamble on everything lining up to get another bite at the apple next year. And lame duck’s always been the most likely time for this to happen.
Okay. So let’s say this bill becomes law. What do folks like you do next on energy in D.C.?
I think we get this done and then we’ve got to make sure the law works. Assuming this passes, we’ve got to make sure the obstacles we thought were obstacles really were the obstacles, and this still doesn’t address additional issues data centers have raised. We need an enforceable framework so as data centers come onto the system, the additional generation and transmission is built in a way that’s in the best interest of communities and paid for by the data centers.
There are questions of whether the market structures created more than a hundred years ago are still the correct structures for 2026. If they’re not, then what’s the path to getting stuff built and maintained effectively? That alone is enough. And I think the next biggest thing: what parts of the supply chain should be developed and where? Transformers, batteries, the future of the auto industry… all those fun things are up in the air.