The document discusses how cities can leverage opportunities from the Inflation Reduction Act (IRA) as clean energy customers, conveners, and catalysts. It provides an overview of elective pay provisions under the IRA that allow tax credits to be received as direct payments. Several cities, like Columbus and Philadelphia, are exploring how to utilize elective pay for renewable energy and efficiency projects to meet climate and equity goals.

1. IMAGE: FLICKR/MICHAEL MULLER
How Cities Can Maximize Inflation
Reduction Act (IRA) Opportunities As
Clean Energy Customers,
Conveners, and Catalysts
July 25, 2023

2. AGENDA
• Welcome remarks
• WRI Project Overview: IRA Roadmap for Local Governments
• Audience Poll: Where are you now?
• Summary: IRA elective pay and clean energy tax credit provisions
• Audience Poll: Your plans for elective pay
• Panelist Presentations
– Janean Weber, City of Columbus
– Katie Bartolotta, Philadelphia Energy Authority
– Sujata Rajpurohit,WRI, IRAEligibility Mapping Tool
• Q&A

3. TODAY’S SPEAKERS
Alex Dane
Senior Manager,
Clean Energy
Innovation &
Partnerships,
World Resources
Institute
Katie Bartolotta
Vice President of
Policy and
Strategic
Partnerships,
Philadelphia
Energy Authority
Nate Hausman
Manager, Clean
Energy Markets,
World
Resources Institute
Sujata Rajpurohit
Associate,
World Resources
Institute
Janean Weber
Assistant
Director, Regulatory
Compliance &
Sustainability,
Department of
Public Utilities,
City of Columbus

4. PROJECT OVERVIEW
• WRI is developing an IRA Roadmap for local governments, a handbook to help local governments
capitalize on IRAclean energy tax credit provisions, including elective pay, as well as other loan and
grant opportunities.
• The IRA Roadmap will outline strategies for local governments to leverage IRA opportunities for
clean energy deployment that advance decarbonization and equity goals.
• WRI expects to publish the IRA Roadmap in September.
• If you have questions or input to inform the development of this knowledge product, please reach out
to nate.hausman@wri.org.
The project team would like to thank Bloomberg Philanthropies and the Local Infrastrcutrure Hub for their
generous support to make the IRA Roadmap possible.

5. IMAGE: FLICKR/MICHAEL MULLER
Audience Poll:
Where are you now?

6. UNCAPPED TAX CREDITS MAKE UP 70% OF IRA
IRA’s projected climate spend is $369B, but that could be far higher since its tax credits are uncapped
CleanElectricity Tax Credits
42%
Individual CleanEnergy
Incentives
9%
CleanManufacturing Tax
Credits
10%
Clean Fuel and Vehicle
Tax Credits
9%
Other Energy and
Climate Spending
4%
Conservation, Rural
Development, Forestry
9%
Building Efficiency, Electrification, Transmission,
Industrial, DOEGrants and Loans
7%
Air Pollution, Hazardous Materials,
TransportationandInfrastructure
10%
Green = Tax Credits
Blue = Grant/Loan/Rebate

7. IRA INCLUDES TRANSFORMATIVE CLEAN
ENERGY TAX CREDIT MEASURES
Suite of clean energy tax credits, including extension and modification of the investment
tax credit (ITC) and production tax credit (PTC)
• Offers long-term predictability of credits
• Expands technology eligibility
• New credit monetization options through transferability and elective payment
ITC and PTC use base and bonus credit structure
• 5x bonus credit for meeting prevailing wage and apprenticeship requirements; if met, 30%
ITC; 2.75cents/kWh PTC inflation adjusted for 10 years
• 10% bonus credit for placement in energy communities
• 10% bonus credit for meeting domestic content requirements
• +10% or 20% bonus credit under ITC for low-income communities
Expands technology eligibility and will be tech-neutral beginning in 2025

8. OVERVIEW: ELECTIVE PAY IN PROPOSED GUIDANCE
IR-2023-116, IRS releases guidance on elective payments and transfers of certain credits under the Inflation
Reduction Act (June 14, 2023)
• Elective pay is a means of delivering 12 IRA tax credits to eligible
entities. It makes the tax credits available as direct payments for
tax-exempt entities.
• Eligibility includes public and nonprofit organizations and
extends to any "agency or instrumentality” of state or local
government. This includes public utility districts, public housing
authorities, school districts, special purpose districts established by
governments (such as joint action agencies, economic
development corporations, and joint powers authorities), and public
universities.

9. KEY THINGS TO KNOW ABOUT ELECTIVE PAY
IR-2023-116, IRS releases guidance on elective payments and transfers of certain credits under the Inflation
Reduction Act (June 14, 2023)
Funds received as tax-exempt
grants do not reduce the basis
for any investment tax
credit eligible for elective pay.
Elective pay requires a pre-filing
registration process. Entities
must pre-file for all projects they
intend to claim through an online
registration process. Timing
process is based on relevant
entities' fiscal year.
Elective pay entities may not use
transferability.
Open comment period through
August 14, 2023.

10. POSSIBLE
ROLES FOR
LOCAL
GOVERNMENT
Procurement
Lead: Advance
municipal clean
energy goals
Project Host:
Leverage public
assets for the
community-wide
benefit
Deal Facilitator:
Accelerate
community deals
and remove
barriers
Strategist: Plan
for community-
wide IRA
implementation
Place-Based
Expert: Conduct
data analysis
and community
engagement
Educator: Help
community
understand and
access IRA
funding
Connector:
Foster new
partnerships to
expand impact
Communicator:
Track and share
community
benefits and
positive impacts

11. IMAGE: FLICKR/MICHAEL MULLER
Audience Poll:
Your plans for elective pay

12. SPEAKERS
Katie Bartolotta
Vice President of
Policy and
Strategic
Partnerships,
Philadelphia
Energy Authority
Janean Weber
Assistant
Director, Regulatory
Compliance &
Sustainability,
Department of
Public Utilities,
City of Columbus
Sujata Rajpurohit
Associate,
World Resources
Institute

13. A tale of two projects:
How we’re thinking
about elective pay
under the IRA
July 25, 2023

14. Janean Weber
Assistant Director
Regulatory Compliance & Sustainability
Department of Public Utilities
City of Columbus

15. About Columbus DPU
• City of Columbus, Department of Public Utilities
• Division of Sewers & Drains
• Division of Water
• Division of Power
Also houses Sustainable Columbus

16. City of Columbus
CAP Strategies

17. Solar PPA Projects in Construction
• 45 MW of new clean energy coming for
Columbus
• Parsons Solar (27 MW) and Jackson
Pike Solar (18 MW) will support Division
of Power customers
• Supports Climate Action Plan actions
7.2 and 7.3, requiring (by 2030):
• 200 MW of municipal solar deployed
• 100% municipal clean energy procurement
Picturedare DPU staff includingDirectorKristen Atha,MayorAndrew J.
Ginther,NextEra Staff and OEC Chiefof Staff Pete Bucher

18. Why consider elective pay? Because we
can!
• For solar:
• Ownership potential from day one,
instead of utilizing PPAs
• Potential to leverage full amount of
credit vs. reduced discount on PPA price
• For biogas:
• Substantially reduces capital required
• Moves up timeline to help meet CAP
goals
Source:WikimediaCommons
Exploring Elective Pay for Southerly
Bioenergy and Southerly Solar

19. Exploring Elective Pay for Southerly
Bioenergy and Southerly Solar
Southerly Bioenergy Project
• Bio-waste to energy (electric) digesters
• Previously under a much longer planning horizon; moved up to start
construction in 2024 when IRA direct pay provisions announced
• RFP reflects desire of Columbus DPU to maximize IRA credits
Southerly Solar
• 27 MWac fixed array on site of biosolids composting facility servicing
Southerly and Jackson Pike wastewater treatment plants
• Proposed battery system (not yet sized) to provide ~3 hrs backup power for
Southerly wastewater treatment plant
• RFP for Solar PPA released prior to IRA guidance

20. Exploring Elective Pay for Southerly
Bioenergy and Southerly Solar
Base Section 48 ITC credit available
• 6% to 30% base credit
• Prevailing wage / apprenticeship requirements to receive full 30%
• Projects must begin construction by end of 2024 when Section 48 sunsets
ITC adders available under Section 48
• 10% for domestic content usage
• 10% for siting in “energy communities”
• Up to 10% for projects smaller than 5 MW located in low-income communities
or tribal lands
• Up to 20% for projects smaller than 5 MW that qualify as low-income
residential building or economic benefit systems

21. Is Southerly Wastewater Treatment Plant in an “Energy Community”?
1. A brownfield site;
2. A metropolitan or non-metropolitan statistical area with an
unemployment rate at or above the national average in the previous
year and at least 0.17% of employment or 25% of local tax revenues
related to the extraction, processing, transport, or storage of coal, oil,
or natural gas at any time beginning in 2010; or
3. A census tract, or adjacent census tract, where a coal mine closed
after 1999 or a coal-fired generating unit was retired after 2009.
Exploring Elective Pay for Southerly
Bioenergy and Southerly Solar

22. • Used tool SEIA | IRA Energy
Communities Map Layers v2b,
which identifies Census Tract 95.90
as “adjacent” to a Census Tract
with a retired coal fired power plant.
• Confirmed bonus credit amount
when IRS issued publication Notice
2023-29, Appendix C:
https://www.irs.gov/pub/irs-drop/n-
23-29.pdf
Exploring Elective Pay for Southerly
Bioenergy and Southerly Solar

23. Exploring Elective Pay for Southerly
Bioenergy and Southerly Solar
“To help the City of Columbus
achieve these goals, this
project will create a holistic
organics receiving and
bioenergy utilization program
which will include an
appropriately sized
cogeneration system, biogas
cleaning equipment, additional
digestion capacity, and a high
strength organic waste, fats,
oils, and grease receiving
station sized for the Columbus
market.”

24. Some considerations for elective pay eligibility (and maximizing credit):
• Can I begin construction of my project by the end of 2024?
• Can I demonstrate continuous construction (or complete project in 4
years)?
• Do I have the right team in place to meet—and do I understand—pre-
filing registration requirements and reporting documentation?
• How will I fund the remainder of the project not subject to elective pay?
• What portion of project costs will be eligible for elective pay?
• How can I meet my domestic content requirements?
• How will I make sure the most current IRA guidance is followed?
Exploring Elective Pay for Southerly
Bioenergy and Southerly Solar

25. Considerations to explore:
• Can I begin construction of my project by the end of 2024?
Exploring Elective Pay for Southerly
Bioenergy and Southerly Solar
Southerly Biogas
Project
“Consultant will prepare a schedule that will be
updated and submitted no less than twice per
month throughout the project. The schedule will
begin with notice-to-proceed for the Consultant
and should show design completion and
bidding to provide for the establishment of
beginning of construction by December 31,
2024 (as defined by the most recent Inflation
Reduction Act Guidance).”

26. Considerations to explore:
• How will I fund the remainder of the project not subject to elective pay?
Exploring Elective Pay for Southerly
Bioenergy and Southerly Solar
Southerly Biogas
Project
“The City of Columbus may apply for Ohio
Water Development Authority funding
assistance and utilize Water Pollution Control
Loan Fund for design and construction planned
through these projects. Interested parties shall
abide by the requirements of the funding
program if funding is secured through this or
any other outside funding program.”

27. Considerations to explore:
• How can I meet my project’s domestic content requirements?
Exploring Elective Pay for Southerly
Bioenergy and Southerly Solar
Southerly Biogas
Project
“Due to the anticipated federal funding, the
design and construction of this project will
be required to adhere to the Build America,
Buy America Act (BABAA) requirements. All
manufactured products, iron and steel (AIS
requirements), and construction materials must
be produced in the United States. Refer to the
provided BABAA guidance document for more
information.”

28. Considerations to explore:
• How will I make sure the most current IRA guidance is followed?
Exploring Elective Pay for Southerly
Bioenergy and Southerly Solar
Southerly Biogas
Project
“Monitor guidance and updates to the Inflation
and Reduction Act and incorporate the
changes into the design, specifications,
schedule, and/or any other impacts to the
project. The guidance document from
November 30, 2022 is provided as a reference
to this RFP, but the most up to date guidance
shall be applied.”

29. Where we are at right now with Southerly Solar + BESS elective pay
determination:
• Working with NextERA to understand pricing differential for build-transfer
+ maintenance (elective pay) vs. PPA with ITC discount
• Enlisting the help of NREL for Clean Energy to Communities Program
Expert Match (40-60 hours of technical assistance)
• Determining whether any portion of the project might be eligible for SRF
funding administered by Ohio EPA
Exploring Elective Pay for Southerly
Bioenergy and Southerly Solar

30. Challenges moving forward:
• Lack of complete and unbiased apples-to-apples economics analysis.
• Never owned/operated solar. Maintenance contract would be required.
• Never owned/operated a BESS. Lack internal capacity to understand
usage for any other purpose than backup power.
• Likely only partial loan funding available for remainder of project; Division
of Power did not budget for capital investment of this scale when
considering PPA option.
• Still developing understanding of IRS requirements for accessing the ITC
funding.
• Slow moving decision-making in a fast moving world.
• FEAR of the unknown!
Exploring Elective Pay for Southerly
Bioenergy and Southerly Solar

31. Lessons learned:
• MUCH easier to plan for elective pay through RFP requirements than
scramble later in time
• There are tools available to aid in the decision-making process: WRI,
NREL, solar developers
• Timing for accessing the credits is very important, especially if you’re
considering a specific technology identified in Section 48 that may not
qualify under Section 48E
• We’re all learning together!
Exploring Elective Pay for Southerly
Bioenergy and Southerly Solar

32. The Inflation Reduction Act
in Philadelphia

33. • Philadelphia is the poorest of the 10 largestUS cities and has a very
old housing stock,with 38% of all homes needing repair
• Federal Reserveestimatesthat the home repair need in Philadelphia
MSA is $3.7 billion.
• 4th highest rate of asthma in US
• Heat differentialbetween poorest and wealthiest neighborhoods is
22°F
• Residentsbelow 30% AMI pay 18% of their income to utilities(energy
burden), making Philly one of the mostenergy-burdened cities in the
US.
• >50% of African-American householdsat any income level and 30% of
all rentersface energy insecurity at least once a year, which has
gotten worse during COVID.
• Unemploymentrate among African American men is typically twice
the citywide average.
Philadelphia’s Energy Issues

34. The Philly model is a nationalleader – equity first, project+ workforce.
1. Creating demand for skilled labor throughproject development, and then
ensuring equitable, diverse supply via well-trained workforce
2. Correcting market inequities, bringing additional resources to bear locally,
creating systems that allow for innovation and collaboration,ensure all
communities have access to capital
Philadelphia Energy Authority: Building a
Robust, Equitable Clean Energy Economy

35. Philadelphia Energy Campaign:
A 10-year, $1B investment to create 10,000 jobs
Total So Far:
$380MM invested
3,275 jobs created
Investment in
Pipeline for 2023:
$400MM+

36. Philadelphia is
extremely well-positioned to receive funds
as a leader in building an equitable clean energy economy.

37. Energy Campaign Projects & Programs
• $91.2MM, Philly Streetlight Improvement Project to replace 130,000+ fixtures citywide with long-
lasting, high-performing LEDs. 51% energy savings.
• 70MW solar PPA to procure 25% of City’s electricity in Adams County
• $250MM of school energy makeovers, incl. lighting, boilers, windows, air conditioning across 24
schools
• $34MM invested, 1800+ residential solar rooftops contracted through Solarize Philly, including
500+ LMI homes
• 90,000+ households enrolled in water and sewer protection program, $45MM+ in savings
• $157MM of C-PACE projects financed to date (C&I)
• Completed Built to Last low-income housing restoration 50-home pilot, Phase 2 underway
• Pairing programs and projects with workforce development - Green Retrofit Immersive Training
(GRIT) for residential construction and Bright Solar Futures for solar
• Launched the Philadelphia Green Capital Corp. (PGCC) PEA’s green bank affiliate in 2021

38. Sec. Granholm & Sen. Casey IRA Visit (3/17/23)
TourStops:
• FrankfordHighSchoolSolar TrainingLab
• Built to Last participant home
• YardsBrewery

39. Built to Last and the IRA
Exampleof the complexcross-sector,strategicbraidingof funding and
collaborationneededto maximizeand equitablydistributethebenefitsof the IRA
• Buildingpartner capacity to scale reach of program
• Layeringresidentialrebatesandtax incentivesto deepenimpact
• Raisingflexiblefundingto address what other programs cannot(e.g.
software, constructionmanagement)
• PEA and PGCC servingas backboneorganizationsto reducecost, time and
administrative burden topartners
• Supportingcommunity-basedorganizations and BTLpartnersin identifying
and applying to grants
• Exportingthis model to the rest of Pennsylvania
■ Includinglow- and moderate-incomesolarand workforcecomponents

40. • Capacity building for community-
based organizations
• Technical assistance
• Project scoping
• Outreach and community
engagement >>
• Workforce development
• Construction management
• Software integration
Focus on gap-filling and capacity building
IRA event for nonprofits and houses of worship during Earth Week

41. Contact
Katie Bartolotta
VP Policy and Strategic Partnerships
kbartolotta@philaenergy.org
215-686-4483
philaenergy.org
solarizephilly.org
philadelphiaCPACE.org
awrusa.com/Philadelphia
phillygreencapital.org
41

42. JULY 25, 2023
Mapping Eligibility for IRA Enhancements

43. WHAT ARE IRA ENHANCEMENTS?
• Bonus funding or preferential treatment for projects that
benefit communities that meet specific criteria
• Each enhancement has a different aim:
– Ensure equitable access to EV charging equipment
– Support residents of low-income communities, particularly
those facing poor air quality or high energy burdens
– Diversify economies historically dependent on the fossil fuel
industry
– Ensure an equitable distribution of the benefits of climate
and clean energy investments

44. HOW CAN I USE THIS?
• Cities, tribes, businesses, non-profits, households and more
can use this to identify areas that offer these bonuses
• Examples:
– An office renovation looking to install EV charging infrastructure
– State, tribal, or city officials seeking to identify areas to highlight for
clean energy investments
– Rooftop solar developer looking for sites that would enable them to
stack IRA credits for maximum value
– City official seeking to identify Justice40 communities and funding
to meet their needs

45. WHICH ONES ARE SHOWN HERE?
• Justice 40
• Alternative Fuel Infrastructure Tax Credit (valued at up to $100,000)
– Low-income non-urban areas shown
– Residential NOT shown
• ITC and PTC
– Energy Communities (+10%)
• Coal closure and fossil fuel communities shown
• Brownfields NOT shown
– Low-Income Communities (ITC only, +10 or +20 percentage points)
• Low-income communities and Tribal Lands shown
• Low-Income Residential Buildings and Low-Income Economic Benefit criteria NOT
shown

46. NEXT STEPS AND QUESTIONS
• Tool currently in beta
• Additional features and information may be added
For more information or to offer feedback on the tool contact:
sujata.rajpurohit@wri.org

47. IMAGE: FLICKR/MICHAEL MULLER
Q&A

48. RESOURCES
• IRA Roadmap for Local Governments (to be published in fall, 2023): This forthcoming resource will explore
how local governments can capitalize on clean energy tax provisions, elective pay, and emerging
financing approaches enabled by the IRA.
• IRA Eligibility Map: A WRI open-access mapping tool that local governments can use to check eligibility for
geographically bound IRA tax credit opportunities as well as Justice 40 programs.
• Exploring New Guidance on IRA Tax Incentives for Clean Energy Webinar Recording: On July 6, 2023, WRI
hosted a webinar featuring experts in finance, law and project development that explored proposed federal
guidance on elective pay and transferability, as well as IRA bonus tax credit incentives.
• WRI's U.S. Climate Policy Implementation Resource Center: An online resource that provides an overview of
sector-specific policies in BIL and IRA.
• Federal Funding Opportunities for Local Decarbonization (FFOLD) Tool: An American Cities Climate
Challenge Renewables Accelerator tool developed by RMI and WRI to enable local governments to prioritize
and leverage federal funding to advance system-wide energy transition goals—from block grants and
technical assistance to competitive grants and loans.
• Local Infrastructure Hub: A national program designed to connect cities and towns with the resources and
expert advice they need to access federal infrastructure funding in order to drive local progress, improve
communities, and deliver results for residents.

49. IMAGE: FLICKR/MICHAEL MULLER
THANK YOU