Company: EAI
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000065984-25-000132
Chunk: 265

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 7
Chunk 265
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 preserved the tax credits for carbon capture and sequestration facilities that meet the requirements of Internal Revenue Code section 45Q.  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.

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.

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 specified foreign entities or that make payments to specified 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.

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.  On August 15, 2025, in response to the executive order, the U.S. Treasury released Notice 2025-42, which provides updated guidance regarding the beginning of construction requirements and termination of the wind and solar energy tax credits under sections 45Y and 48E.  Notice 2025-42  provides additional guidance on these safe harbor provisions, clarifying the criteria for beginning construction and offering examples of equipment and contractual terms that will qualify a project for safe harbor treatment under the OBBBA.  Notice 2025-42 states that the U.S. Treasury and the IRS are currently drafting additional guidance to address the FEOC rules.

Entergy Wholesale Commodities Exit from the Merchant Power Business

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Entergy Wholesale Commodities Exit from the Merchant Power Business” in the Form 10-K for discussion of the exit from the merchant power business