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San Diego Community Power hears federal tariff and tax-credit risks; staff say core portfolio largely shielded
Summary
Staff presented a special update on federal developments—House legislation, tariffs and executive orders—that could reduce clean-energy tax credits and raise equipment costs. Presenters said many SDCP contracts are already mitigated but earlier-stage projects and some battery storage remain at risk.
San Diego Community Power staff told the Community Advisory Committee on June 12, 2025 that federal policy proposals and recent tariff actions could reduce or end some clean-energy tax credits and raise equipment costs for renewable projects, potentially slowing future procurement and raising prices for projects not yet under construction.
Patrick Welch, SDCP associate director of legislative affairs, and Andrea (Andrea Torres), director of origination, briefed the committee on three areas: pending House legislation (referred to in the presentation as H.R. 1), alternative bills in the House (referred to as H.R. 3120/3191 in the presentation), and an evolving set of tariffs that have rapidly changed since January. Welch prefaced the briefing by saying, "This is a snapshot in time. Everything is very uncertain," and urged the committee that the information represented directional rather than definitive outcomes.
Presenters described how H.R. 1, as passed by the U.S. House, would shorten and tighten the time window for utility-scale projects to claim investment tax credits by changing the standard from "start of construction" to "placed in service," and imposing a hard deadline of Dec. 31, 2028, in the bill as presented to the Senate. The bill also contains a complex "foreign entity of concern" provision that would disqualify projects receiving certain component parts or material assistance from specified countries. Welch warned this could materially affect projects whose supply chains include parts sourced from China or other affected nations.
Torres described recent tariff volatility and legal developments: federal tariff rates on some goods briefly reached very high levels in April, then paused and were temporarily restrained by court activity. She noted, "China remains a dominant supplier of raw materials utilized in solar equipment," but also that module supply has shifted to Southeast Asia and the U.S. to some extent. She added the battery supply chain remains more China-dependent, particularly for materials such as graphite and cobalt and for battery cells, which raises concern for energy-storage projects.
Staff said SDCP has already contracted a substantial portion of its renewable resources and that about two-thirds of renewable megawatt-hours under development have either commenced construction or have safe-harbored equipment, which reduces exposure to both tariff and tax-credit changes. Projects that are contracted but not under construction and those still in the pipeline are more exposed to changes in tax-credit eligibility and tariffs, according to staff.
Staff also noted an executive-branch permitting pause on Bureau of Land Management (BLM) land that affected at least one SDCP solar-plus-storage project in Nevada; that pause was later lifted and BLM resumed processing environmental reviews, but the delay required a contract amendment to extend a commercial operation date. Welch and Torres told the committee SDCP is continuing to monitor congressional activity, court rulings, tariff actions and permitting developments and is engaged with federal consultants and congressional staff.
No committee action was required; the item was presented for the committee's information and discussion.
