By Katherine Hamilton

Shares of Constellation Energy and other nuclear-power-focused companies rose after the Biden administration eased tax-credit rules for hydrogen production.

The Treasury Department and Internal Revenue Service on Friday released final rules for sections of the Inflation Reduction Act that make a tax credit to encourage renewable energy more widely available than previously drafted. The final rule for clean-hydrogen production would allow some nuclear power plants that are at risk of retirement to produce the gas, which is used in fuel cells.

"The extensive revisions we've made in this final rule provide the certainty that hydrogen producers need to keep their projects moving forward and make the United States a global leader in truly green hydrogen," said John Podesta, senior climate advisor to President Biden.

Nuclear power already has enjoyed a boost in fortunes as technology companies seek electricity needed to power artificial-intelligence development.

Constellation shares advanced 3.8%, to $251.74; Vistra stock rose 7%, to $160.33; NextEra Energy was up 1.2%; and its publicly traded renewable energy unit NextEra Energy Partners rose 3%, to $18.73. Shares of Plug Power were up 2.6%, at $2.39.

The Inflation Reduction Act previously expanded tax credits for wind, solar and hydrogen projects, but didn't immediately finalize some criteria, like specifying which energy sources companies can use to make clean hydrogen and still be eligible for credits.

"We are pleased to see that the U.S. Treasury Department has changed course and that the final rule allows a significant portion of the existing merchant nuclear fleet to earn credits for hydrogen production," Constellation Chief Executive Joe Dominguez said.

The new rules are likely to facilitate investment in clean hydrogen, much of which has been put on pause during the period of uncertainty, Evercore ISI analysts said in a note. This should help Constellation, Public Service Enterprise Group and Vistra in the long term, they said.

Friday's gains follow an 8% gain on Thursday for Constellation after it said it secured a roughly $840 million contract to supply 13 government agencies with nuclear energy.

Write to Katherine Hamilton at katherine.hamilton@wsj.com

(END) Dow Jones Newswires

January 03, 2025 11:45 ET (16:45 GMT)

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