Company: EAI
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0000065984-25-000087
Chunk: 225

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-08-01
Form: 10-Q
Item: Item 7
Chunk 225
---
 sections 45Y (clean electricity production credit) or Internal Revenue Code section 48E (clean electricity investment credit).  In addition, the OBBBA preserved the tax credits for carbon capture and sequestration facilities that meet the requirements of Internal Revenue Code section 45Q.  In contrast, the OBBBA significantly shortened the time period for solar and wind facilities to claim clean energy tax incentives.  In general, solar and wind facilities must be placed in service by December 31, 2027 to qualify for the tax credits, unless construction begins by July 3, 2026, and certain safe harbor requirements are met.  

9

Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis

On July 7, 2025, an executive order was issued directing the U.S. Treasury to issue, among other things, new safe harbor guidance, particularly with respect to wind and solar facilities.  Any new guidance could impact Entergy’s capital planning and expectations with respect to its planned solar and battery facilities.

In addition, the OBBBA adopted new foreign entity of concern (FEOC) rules designed to deny clean energy tax incentives to all clean energy projects beginning construction after December 31, 2025 that use equipment beyond statutory guidelines from prohibited foreign entities (entities with ties to China, Russia, Iran, or North Korea).  The FEOC rules also deny these incentives to taxpayers that rely beyond certain thresholds on equity or debt from prohibited foreign entities or that make payments to prohibited foreign entity counterparties under contracts or licensing agreements that give such counterparties “effective control” over an eligible project.  These taxpayer FEOC rules will apply to taxpayers in their first taxable year following enactment of the OBBBA.  The July 7, 2025, executive order also instructed the U.S. Treasury to issue guidance on these new FEOC requirements.

The OBBBA also retained full transferability of all credits and preserved five-year Modified Accelerated Cost Recovery System treatment for eligible Internal Revenue Code section 45Y and 48E assets.

The changes in law and federal energy policy reflected in the OBBBA could have a material effect on Entergy’s current and future resource planning, including particularly solar and wind resources, and on its results of operations, cash flows, or financial condition.  Entergy may not be able to realize the anticipated benefits of federal tax credits for certain of its planned solar and battery facilities to the extent that these projects do not meet the