Sacramento sewer district: Biogeneration facility meets IRA construction milestone; tax-credit payout range estimated

The Sacramento Area Sewer District on Sept. 24 received an update on the Biogeneration Facility project, which staff said has begun construction and met the milestone required to qualify for direct-payment tax credits created by the Inflation Reduction Act of 2022.

The project — referred to in staff materials as "Biogen" — is a renewable-energy combined-heat-and-power system that staff told the board will include about 13.4 megawatts of installed capacity delivered by four 2.6-megawatt internal-combustion engines and one 2.8-megawatt fuel cell, with future hydrogen-production capability. Construction is being delivered under a design‑build contract with Ameresco, and most major systems and many components are on site or in local storage, staff said.

Steve Nabozick, the district project lead who presented the update, told the board the district’s tax adviser has provided a favorable position on project eligibility under Internal Revenue Code section 48 and the Inflation Reduction Act (IRA). "We've met the beginning of construction milestone," Nabozick said, adding that meeting prevailing‑wage and apprenticeship requirements and documenting domestic content will be critical to maximizing the credit payout.

Why it matters: staff estimated total capital expenditures at about $150,000,000 and said the eligible cost base for…