In the Inflation Reduction Act of 2022 (IRA), Congress created the legal concept of “energy communities,” part of an effort to steer investment toward places where the coal, oil, and gas sectors play an outsized role in the local economy. If developers located certain clean energy projects in these communities, they would be eligible for an additional 10 percent tax credit. The rationale here was pretty clear: steer investment in clean energy development toward places that historically have been reliant on coal, oil, and gas.
But as I and others have written, the way that Congress defined “energy communities” was extremely broad and poorly targeted. Although roughly 50 percent of US land mass qualified as an energy community in 2024 (including Cape Cod, Chicago, Las Vegas, San Diego, San Francisco, Connecticut’s New York City suburbs, and even Disneyland), the definition excludes all of the Permian Basin in West Texas (the epicenter of US oil production), along with oil- and gas-dependent regions in Oklahoma, Colorado, and North Dakota. (To understand how the “energy community” definition came to be, see this article.)
So, while looking to amend the IRA in the One Big Beautiful Bill Act (OBBBA), Congress had an opportunity to redefine “energy communities” to more precisely target the places that face the most acute economic risks from declining fossil fuel production. As it happens, Congress did seize the moment, but not by narrowing the geographic targeting. Instead, the OBBBA broadens the definition to include “nuclear energy communities.” Specifically, the designation includes any metropolitan statistical area (an MSA, which is an important detail I’ll get into later) that:
“has (or, at any time during the period beginning after December 31, 2009, had) 0.17 percent or greater direct employment related to the advancement of nuclear power, including employment related to—
(I) an advanced nuclear facility,
(II) advanced nuclear power research and development,
(III) nuclear fuel cycle research, development, or production, including mining, enrichment, manufacture, storage, disposal, or recycling of nuclear fuel, and
(IV) the manufacturing or assembly of components used in an advanced nuclear facility.”
Why Add Nuclear Communities?
At first blush, this idea seems pretty reasonable. Nuclear closures can have major impacts on local economies, as nuclear plants often are a key employer, offering high-paying jobs and significant tax revenues for local schools and other public services. Maybe Congress wanted to give those communities a boost? Perhaps this provision will help restart some of those closed reactors, as developers are trying to do in Michigan and Pennsylvania?

But giving a boost to nuclear communities is not what the new law will do. Instead, Congress—just like it did for the original “energy communities” definition—has included a surprisingly broad set of places while also excluding some of the places that would make the most intuitive sense. Instead of focusing on places where reactors have closed (or may close in the future), the OBBBA makes the bonus credit available for places where new nuclear reactors are built. In all likelihood, this broad availability of the credit will provide a top-up to the existing tax credits (i.e., 45Y and 48E) that already are available for new nuclear plants (and other technologies such as advanced geothermal), which were put in place under the IRA and mostly retained in the OBBBA.
But the expansive definition goes much further than that. The OBBBA includes most other parts of the nuclear energy industry and allows places to qualify if they hosted these sectors as long as 15 years ago. For example, places can qualify if they have had, in any year going back to 2010, at least 0.17 percent of their employment tied to uranium mining or enrichment (which mostly occurs in Wyoming, Utah, and New Mexico); hosted research and development for new reactor technologies (which mostly happens at federal labs, private labs, universities, and corporate headquarters far from the reactors themselves); stored spent fuel (which happens at existing nuclear sites and a couple off-site repositories); or hosted parts of the advanced nuclear supply chain.
Clearly, the intention is not primarily to support communities that face economic hardship from nuclear plants that have closed or are at risk of closure. Instead, the revision appears to boost the tax credits that are available to advanced nuclear projects (and other energy projects), while also steering investment toward places that have been, or will become, homes to the nuclear energy value chain. This approach is consistent with the Trump administration’s stated goals of boosting the broader nuclear industry within the United States and making the nation less reliant on imported fuel and technologies (particularly from Russia and China). But, as always, the devil is in the details.
How Will the IRS Determine Eligible Communities?
To qualify for the credit, an MSA needs to have 0.17 percent or more of its employment (the same threshold used in the IRA) in the broad range of sectors described above (e.g., advanced nuclear power generation, its supply chains, research and development). But here’s the rub: we don’t have detailed data on how many people work in each of these industries.
This ambiguity has popped up before. Under the IRA, places can qualify as energy communities if 25 percent or more of their tax revenues come from fossil fuels. The only problem: Comprehensive data isn’t available for local tax revenues from fossil fuels, and the IRS has never been able to enforce this provision of the law. (I’ve done research with colleagues that starts to put some of this data together, but our efforts are far from comprehensive.)
A similar problem arises with nuclear energy communities. Although federal data sets include employment for a variety of subcomponents of the nuclear industry, the data doesn’t cover all of the activities enumerated in the OBBBA. For example, employment data from the US Census includes statistics for employment at nuclear power plants (North American Industrial Classification, or NAICS, code 221113), construction of nuclear plants (NAICS 237130), waste reprocessing (NAICS 325180), and more. Similarly, data from the Bureau of Labor Statistics includes employment statistics for nuclear engineers (Occupational Employment and Wage Statistics, or OEWS, code 17-2161), nuclear power reactor operators (OEWS 51-8011), and nuclear technicians (OEWS 19-4051). But no data is available to measure employment in all the sectors identified in the OBBBA, such as advanced nuclear research and development or uranium mining and enrichment. Instead, data on these industries is aggregated into a broader “grab bag” of small but related industries, such as “other metal ore mining” (NAICS 212290), which includes uranium mining among a host of others.
In short, the IRS is going to have to implement this part of the law without the data it needs.
Which Places Will Be Covered?
How much of the United States might qualify under these provisions? Because of the data problems described above, and because we don’t know where new nuclear reactors will be developed in the future, it’s very hard to say for sure. But here’s a preliminary effort.
If we use employment data from the US Census Bureau’s County Business Patterns and include NAICS codes that are pretty clearly within scope of the law, it looks like about 0.56 percent of the US workforce was employed in the relevant sectors in 2023—well above the 0.17 percent threshold enshrined in the law (Table 1).
Table 1. US Employment in the Nuclear Industry in 2023

Data source: US Census County Business Patterns 2023. NAICS = North American Industrial Classification System.
Even if we exclude some questionable sectors such as “electric power generation, nuclear,” which mostly covers existing, non-“advanced” reactor designs, the headline result is the same. In short, Congress has—as it did in 2022—defined “energy communities” to include places where energy-sector employment is well below the national average.
As a result, the law appears to designate roughly 20 percent of the US land mass as a nuclear energy community. But because the law specifies that nuclear energy communities must be in an MSA, that 20 percent of the nation’s geography includes 75 percent of the US population. So, despite the fact that very few of them host nuclear reactors, every major US city appears to qualify as a “nuclear energy community” under the OBBBA. Specifically, each one of the 50 most populous US counties would qualify (using the data and industry codes shown in Table 1).
Despite the fact that very few of them host nuclear reactors, every major US city appears to qualify as a ‘nuclear energy community.’
At the same time, many communities that host nuclear reactors will not qualify, in most cases because they are outside of any MSA. For example, La Salle County, Illinois, a rural region that hosts a large nuclear plant, will not qualify because it is not in an MSA. But drive about 90 miles east, and you’ll find yourself in Chicago, a nuclear energy community (as defined in the law) that hosts no nuclear power plants. Of the roughly 50 US counties that host operating nuclear power plants, only about 6 in 10 will be eligible based on this analysis. Figure 1 illustrates the results.
Figure 1. Eligible locations for the nuclear energy communities bonus tax credit

Source: US Census County Business Patterns 2023 for nuclear energy employment data. Notes: MSA = metropolitan statistical area. Thanks to Zachary Whitlock for help in gathering data and creating this map.
Looking forward, the MSA provision will affect the eligibility of communities that host new nuclear projects. For example, Plant Vogtle Units 3 and 4—which use a qualified advanced reactor (the AP1000) and came online in 2023 and 2024—sit in Burke County, Georgia, which is part of the Augusta-Richmond County MSA. So Vogtle will qualify. But in other cases, such as the Kemmerer advanced nuclear project in Wyoming and the Long Mott Energy project in Texas, the bonus tax credit will not be available because both fall outside any MSA.
Where Does This Leave Us?
Under both Democratic and Republican control, Congress has sought to define “energy communities” in the United States. But neither effort has effectively targeted the places that depend most heavily on the energy sector as an economic engine. In both cases, the relevant laws (1) include many places that don’t heavily rely on the energy sector and (2) exclude places that do.

Looking forward, there’s a lot of uncertainty, but a few things are clear. First, policymakers are interested in supporting energy communities. As I’ve written with colleagues, this is an important policy objective for reasons of both fairness and the political viability of any energy transition. Second, it’s not easy to do this well. Designing policies to target the right places often requires time and access to technical expertise that congressional staff may not have.
Perhaps Congress will revisit the “energy communities” provision in the months and years ahead to better target resources to the places that need them most. If and when these tax provisions are reconsidered, closer attention to detail will allow Congress to develop the right metrics and the right terminology so that taxpayer dollars (or, in this case, forgone tax revenue) are used to achieve the goals that lawmakers intend.
If: Lawmakers intend to steer investment toward US energy communities, including those that rely on coal, oil, gas, and nuclear energy,
Then: Congress will need to update its metrics and terminology to more precisely target the places that are most reliant on those sectors.

For more timely insights about developments in environmental and energy policy, browse the If/Then series.