House panel advances bill to let Vineyard district energy project claim high-cost infrastructure credit

The House Revenue and Taxation Committee on Feb. 21 advanced House Bill 350, District Energy Amendments, a bill that would allow a consolidated heating, ventilation and air‑conditioning (HVAC) district in the North End of Vineyard to qualify for an existing high‑cost infrastructure tax credit if the energy services district contributes at least $10 million.

Supporters said the project—planned as a centralized utility to provide heating, cooling and domestic hot water across a roughly 650‑acre Vineyard development—would capture waste heat and produce economy‑of‑scale savings for buildings across the district.

"It centralizes heating and cooling equipment, allowing for much more efficient and resilient energy distribution," said Jason Owen of Corex, which is working on the district energy project. "It allows for waste heat recovery and opens the door to recovery of waste heat from industrial sources such as the nearby Rocky Mountain Power natural‑gas station."

The bill’s sponsor, Representative Peterson, said the measure adds cooling services to the code, creates an energy services district and makes the district eligible for the tax credit if it meets the $10 million contribution threshold. He turned over technical and operational questions to Corex and developer representatives during the hearing.

Committee members raised questions about the project’s structure, who would pay rates and how customers would be billed. Representatives asked whether the district utility would be a regulated entity and whether any tax credit benefits would be passed to ratepayers. Corex representatives and a developer representative said the utility would be regulated by the Utah Public Service Commission and that incentives would be reflected in reduced rates under commission oversight. "As a regulated utility, any incentive provided does need to be passed on directly to the customer," a Corex representative said.

Developers’ representatives said the district would serve a mix of uses—residential, retail, medical, and university property—and estimated the larger development would include more than 10,000 housing units over time, including owner‑occupied and rental housing as well as affordable units. Rob Jolley, representing the project developers, said if the tax credit is not approved the developers would still connect buildings to conventional electric and gas utilities but that the district system is expected to be more efficient and to make use of otherwise wasted thermal energy from a nearby generation plant.

Public testimony included an energy industry lobbyist who said the credit is post‑performance and intended to reduce capital costs for large infrastructure investments. Committee members who oppose targeted incentives warned about special‑interest carve‑outs and said they prefer broader tax policy changes or clearer public benefits. Other members expressed support for the technology and for using state incentives to encourage large, shared infrastructure that could be replicated.

Committee member Representative Covert moved to recommend the bill favorably. The committee passed the bill out of committee with a favorable recommendation in a recorded vote (7 yes, 3 no). The record of votes was taken during roll call.