Morgan Meguire News

NEPPA e-Weekly Legislative Update DC Report 10-7-08

Staff — Tue, 07 Oct 2008 21:03:00 GMT

Energy Tax Extenders Become Law in Economic Rescue Package

On October 3, by a vote of 263-171, the House passed HR 1424, the Emergency Economic Stabilization Act of 2008, a bill that provides $700 billion to rescue the financial markets, which the Senate passed 74-25 on October 1. The House had defeated a slightly different version earlier that week. To attract more support, the Senate added $108 billion in tax breaks, increased the limit on FDIC-insured bank deposits to $250,000 from $100,000, and added a "patch" for the Alternative Minimum Tax. It then passed the revised bill and sent it back to the House for approval. The President signed the bill into law on Friday, October 3.

Among the provisions included in the measure is a $17 billion energy tax incentives package, which includes:

A one-year extension of the existing Clean Renewable Energy Bonds (CREB) program, and authorization for $800 million of new CREB bonding authority, with public power-supported technical fixes for the program;
An eight-year extension of the Investment Tax Credit (ITC) for solar and fuel cell property;
A one-year extension of the Production Tax Credit (PTC) for wind and two-year extension for other qualifying renewable facilities;
A Plug-in Hybrid Electric Drive Vehicle (PHEV) credit for individuals;
Energy efficiency deductions for commercial buildings; new credits for energy efficient homes, and upgrades to existing homes (including the addition of a $300 credit for energy-efficient biomass fuel stoves).

Passage of the energy extenders package - particularly with the preferred CREBs provisions - comes as a victory for NEPPA and others who have worked over the last year or so for Congress to act on it.

To see how your Senator voted, click on: http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=110&session=2&vote=00213

To see how your Representative voted, click on: http://clerk.house.gov/evs/2008/roll681.xml

Congress Adjourns to Campaign for Elections

Congress adjourned on October 3, after completing work on the economic rescue bill. The Senate is scheduled to reconvene for a post-election, lame duck session on November 17 and to organize for the 111^th Congress. The House is currently scheduled to return on January 3, 2009, although there is speculation they may return in November, as well.

Dingell and Boucher Release Climate Change Draft

Today, (10/7) House Energy and Commerce Committee Chairman John Dingell (D-MI) and Energy and Air Quality Subcommittee Chairman Rick Boucher (D-VA) released a "discussion draft" of legislation to establish an economy-wide, cap-and-trade program to reduce emissions of greenhouse gases (GHG). In a memorandum to Committee Members, Dingell and Boucher said that their "goal is to craft a bill that can be enacted quickly and lead to regulations that can be implemented with a minimum of administrative or legal impediments. Achieving that goal will require us to assemble a bipartisan coalition that bridges legitimate policy disagreements rooted in regional economics and other factors that cross party lines."

The discussion draft includes specific statutory language on some issues and options for action in other areas. Highlights include:

-A timetable that would require reductions in emissions of GHG to six percent below 2005 levels by 2020; 44 percent below 2005 levels by 2030 and 80 percent below 2005 levels in 2005. The authors say this phased approach will allow the economy to adjust to new prices for carbon in early years and become more stringent in the years when they anticipate carbon capture and sequestration technologies to be available for wide deployment;

-Four options for allocating allowances, including: 1) minimizing costs to regulated entities by allocating allowances at no charge, as in the 1990 acid rain program; 2) allocating fewer allowances to regulated entities and more to "complementary" programs that would also help reduce GHG emissions, as in the Lieberman-Warner bill; 3) directing allowance value to "adaptation" programs and international GHG programs; or 4) use the majority of allowance value for rebates to consumers. All four options include support for energy efficiency and clean technology initiatives and low-income customer assistance, primarily through allowance allocations;

-Cost management features that would allow regulated entities to bank and borrow allowances; access to a "strategic reserve" of allowances that would be auctioned if allowance prices reach a predetermined level; and purchase EPA-approved domestic and international offsets to comply with the new GHG limits, from five percent of the compliance obligation in early years, growing to 35 percent by 2024; and

-Carbon market oversight, including prevention of fraud and market manipulation, which will reside with the Federal Energy Regulatory Commission.

There will be not be action on the discussion draft in this Congress, but rather, its intent is to lay the framework for debate next year.

The text of the Dingell-Boucher Discussion Draft, Executive Summary of Discussion Draft, Memorandum to Committee Members and Chart of Draft allocation options are available on the House Energy and Commerce Committee web site: http://energycommerce.house.gov/.

Congress Adjourns to Campaign for Elections

Staff — Tue, 07 Oct 2008 20:59:00 GMT

Energy Tax Extenders Become Law in Economic Rescue Package