Lowering Energy Costs through Grid Modernization Act

(a) In general. Section 48E(a)(1) of the Internal Revenue Code of 1986 is amended—

(1) in subparagraph (A), by striking and at the end,

(2) in subparagraph (B), by striking the period at the end and inserting , and, and

(3) by adding at the end the following new subparagraph:

(C) any high-performance transmission property.

(b) Applicable percentage. Section 48E(a)(2) of such Code is amended by adding at the end the following new subparagraph:

(C) High-performance transmission property. Subject to paragraph (3)—

(i) Base rate. In the case of any high-performance transmission property which is not described in clause (ii)(I) and does not satisfy the requirements described in clause (ii)(II), the applicable percentage shall be 6 percent.

(ii) Alternative rate. In the case of any high-performance transmission property—

(I) with a capacity of less than 1 megawatt, or

(II) which— the applicable percentage shall be 30 percent.

(aa) satisfies the requirements of subsection (e)(3), and

(bb) with respect to the construction of such property, satisfies the requirements of subsection (e)(4),

(c) Increase in credit rate in certain cases

(1) Energy communities. Section 48E(a)(3)(A) of such Code is amended—

(A) in clause (i), by striking or with respect to energy storage technology and inserting , energy storage technology, or high-performance transmission property, and

(B) in clause (ii)—

(i) in subclause (I), by striking or with respect to energy storage technology described in paragraph (2)(B)(i) and inserting , energy storage technology described in paragraph (2)(B)(i), or high-performance transmission property described in paragraph (2)(C)(i), and

(ii) in subclause (II), by striking or with respect to energy storage technology described in paragraph (2)(B)(ii) and inserting , energy storage technology described in paragraph (2)(B)(ii), or high-performance transmission property described in paragraph (2)(C)(ii).

(2) Domestic content. Section 48E(a)(3)(B) of such Code is amended by striking or energy storage technology each place it appears and inserting , energy storage technology, or high-performance transmission property in each such place.

(d) Qualified investment with respect to high-Performance transmission property defined. Section 48E of such Code is amended—

(1) by redesignating subsections (d) through (k) as subsections (e) through (l), respectively, and

(2) by inserting after subsection (c) the following new subsection:

(d) Qualified investment with respect to high-Performance transmission property

(1) Qualified investment. For purposes of subsection (a), the qualified investment with respect to high-performance transmission property for any taxable year is the basis of any high-performance transmission property placed in service by the taxpayer during such taxable year.

(2) High-performance transmission property

(A) In general. For purposes of this section, the term high-performance transmission property means property used in a right-of-way optimization project or a reconductoring project.

(B) Installation expenses included. For purposes of determining the credit under subsection (a), the term high-performance transmission property shall include amounts paid or incurred by the taxpayer for installation of such property.

(C) Right-of-way optimization project and reconductoring project defined. For purposes of subparagraph (A), the terms right-of-way optimization project and reconductoring project have the meaning given such terms, respectively, in section 2 of the Lowering Energy Costs through Grid Modernization Act.

(3) Material assistance from prohibited foreign entities. The term high-performance transmission property shall not include any property the construction of which begins after December 31, 2025, if the construction of such property includes any material assistance from a prohibited foreign entity (as defined in section 7701(a)(52)).

(e) Restrictions relating to prohibited foreign entities. Section 48E(e)(6)(B) of such Code, as redesignated by subsection (d), is amended by striking or energy storage technology described in subsection (c)(2) and inserting , energy storage technology described in subsection (c)(2), or high-performance transmission property described in subsection (d)(2).

(f) Credit phase-Out. Section 48E(f) of such Code, as redesignated by subsection (d), is amended—

(1) by striking or energy storage technology each place it appears and inserting , energy storage technology, or high-performance transmission property in each such place, and

(2) by inserting or any high-performance transmission property after any energy storage technology.

(g) Conforming amendments

(1) Section 48E(a)(2) of such Code, as amended by the preceding provisions of this section, is amended—

(A) by striking subsection (d) both places it appears and inserting subsection (e) in each such place,

(B) by striking subsection (d)(3) both places it appears and inserting subsection (e)(3) in each such place, and

(C) by striking subsection (d)(4) both places it appears and inserting subsection (e)(4) in each such place.

(2) Section 48E(k) of such Code, as redesignated by subsection (d), is amended by striking subsection (g) and inserting subsection (h).

(3) Section 48(e)(4)(D) of such Code is amended by striking section 48E(h)(4)(D)(ii) and inserting section 48E(i)(4)(D)(ii).

(4) Section 49(a)(1)(C) of such Code is amended—

(A) in clause (vii), by striking and at the end,

(B) in clause (viii), by striking the period at the end and inserting , and, and

(C) by adding at the end the following new clause:

(ix) the basis of any high-performance transmission property under section 48E.

(5) Section 168(e)(3)(B)(viii) of such Code is amended by striking or any energy storage technology (as defined in subsection (c)(2) of such section) and inserting , any energy storage technology (as defined in subsection (c)(2) of such section), or any high-performance transmission property (as defined in subsection (d)(2) of such section).

(6) Section 7701(a)(51) of such Code is amended—

(A) in subparagraph (D)—

(i) in clause (i)(II)(aa), by striking or energy storage technology and inserting , energy storage technology, or high-performance transmission property, and

(ii) in clause (ii)—

(I) in subclause (I)(aa), by striking or energy storage and inserting energy storage technology, or high-performance transmission property,

(II) in subclause (II)—

(aa) in item (aa), by inserting or any high-performance transmission property produced by the taxpayer before the comma at the end, and

(bb) in item (ee), by striking or energy storage technology and inserting , energy storage technology, or high-performance transmission property, and

(III) in subclause (III)—

(aa) by striking , energy storage technology, each place it appears and inserting , energy storage technology, high-performance transmission property, in each such place,

(bb) by striking any energy storage technology, and inserting any energy storage technology, any high-performance transmission property,, and

(cc) by striking or energy storage technology and inserting , energy storage technology, or high-performance transmission property, and

(B) in subparagraph (I), by adding at the end the following new clause:

(vii) High-performance transmission property. The term high-performance transmission property has the same meaning given such term under section 48E(d)(2).

(7) Section 7701(a)(52) of such Code is amended—

(A) in subparagraph (A), by striking or energy storage technology and inserting , energy storage technology, or high-performance transmission property,

(B) in subparagraph (B)—

(i) in clause (ii), by inserting or high-performance transmission property after energy storage technology, and

(ii) in the subparagraph heading, by striking and energy storage technology and inserting , energy storage technology, and high-performance transmission property,

(C) in subparagraph (D)—

(i) in clause (i)—

(I) by striking or energy storage technology each place it appears and inserting , energy storage technology, or high-performance transmission property in each such place, and

(II) in the clause heading, by striking and energy storage technology and inserting , energy storage technology, and high-performance transmission property,

(ii) in clause (iii)(II), by striking or energy storage technology and inserting , energy storage technology, or high-performance transmission property, and

(iii) in clause (v)(II), by striking or energy storage technology and inserting , energy storage technology, or high-performance transmission property, and

(D) in subparagraph (E), by adding at the end the following new clause:

(v) High-performance transmission property. The term high-performance transmission property has the same meaning given such term under section 48E(d)(2).

(h) Effective date. The amendments made by this section shall apply to property placed in service in taxable years beginning after the date of the enactment of this Act.

(i) Regulations. Not later than 18 months after the date of the enactment of this Act, the Secretary of the Treasury shall issue such regulations or other guidance, or amend existing guidance, as may be necessary or appropriate to carry out this section and the amendments made by this section.