Updated: Dec 27, 2021
In February of 2020, the International Brotherhood of Electrical Workers unanimously endorsed then Vice President Joe Biden to be the next President of the United States.
This week President Biden unveils what he is calling a 'Once-In-A-Generation' Infrastructure Proposal.
So how will this effect lineman across the United States? A White House document released this week states it will put hundreds of thousands of people to work laying thousands of miles of transmission lines.
Independent analysis predicts it will increase taxes for both individuals and businesses across the country. Additionally, for lineman it will likely increase demand for the trade but may not increase wages proportionally.
The demand for the trade will be spurred by new tax credit incentives for grid modernization and electrification.
How much is being spent to upgrade the power grid?
The estimated price tag of the entire plan is north of $2 trillion dollars. The proposed initiative is suppose to be paid through tax increases over a 15 years.
The largest portion of the plan is efforts to calling on Congress to put $400 billion toward expanding access to quality, affordable home- or community-based care for aging relatives and people with disabilities. Other efforts include subsidizing elderly care workers and expand access to long-term care services under Medicaid.
Other segment include a increased government spending on railways and roads as well as increased access for rural broadband. The two pieces of the pie that will catch the eye of those in the overhead distribution industry are the modernization of the power grid and to a lesser extend increased electric vehicle charging stations.
According to the fact sheet, Biden’s “plan will create a more resilient grid and create good jobs, with a choice to join a union, on the path to achieving 100 percent carbon-free electricity by 2035.”
What is this new Grid Deployment Authority?
One of the new government programs proposed to be created is a new Grid Deployment Authority at the Department of Energy.
Advocates for the grid modernization argue those efforts would create good-paying jobs for union laborers, line workers, and electricians, in addition to creating demand for American-made building materials and parts. While opponents state it will weaken the momentum that the private sector currently has in executing on large scale transmissions projects, particularly those in the Southeast.
The Grid Deployment Authority would supposedly work to decrease the obstacles to receive the permits for new transmission. There is fair skeptical of a new tax-funded government authority being created to reduce the red-tape of current state and federal authorities in grid management.
Will this create even more demand for line work?
Short answer: Yes.
The package would provide an investment tax credit to encourage at least 20 gigawatts of transmission to support the integration of renewable generation. In many energy companies financial projections this tax credit could reduce the hurdle rate and begin new transmission projects in the coming years.
The plan would likely also increase state and municipal funding for power line repair and maintenance in urban areas.
A Department of Energy study found that power outages cost the U.S. economy up to $70 billion annually. The President’s plan will create a more resilient grid, lower energy bills for middle class Americans, improve air quality and public health outcomes, and create good jobs, with a choice to join a union, on the path to achieving 100 percent carbon-free electricity by 2035.
There is strong concern about the federal governments ability to be able to act at the needed speed to modernize today’s balkanized and antiquated grid infrastructure with an advanced macro grid and reliable clean energy.”
How will this effect my taxes?
The main narrative from the White House regarding the payment plan for this infrastructure plan is an increase in the corporate tax rate to 28%. Most financial analyst assume that in the energy sector (and most corporations broadly) that this would be passed down to the consumers.
With specific regards to this plan, lineman would not see a huge increase in their taxes but would likely see significant increases in their personal expenses paying their electric bill as well as at the grocery story and consumer goods.
An interesting narrative throughout the plan is its consistent message to fair chances to join a union. President Biden is clearly calling on Congress to ensure all workers have a free and fair choice to join a union by passing the Protecting the Right to Organize (PRO) Act, and guarantee union and bargaining rights for public service workers.