The Senate began debate on its energy bill (H.R. 6), the Creating Long-Term Energy Alternatives for the Nation Act (CLEAN), on June 11 and is continuing to consider amendments this week. A cloture vote -- to end debate and move to a final vote on the bill -- is scheduled for this Thursday; it is unclear if the Democrats have the votes to invoke cloture.
House committees are working to advance their various bills, with the hope that the full House will debate the combined measure prior to the July 4 recess. Prospects for enactment of a bill have become somewhat clouded, since the Administration issued a strong statement registering opposition to the Senate bill and threatening a veto if certain provisions are not eliminated or significantly modified.
Senate Considers Energy Bill; RPS & CPS Amendments Debated
The comprehensive Senate bill, which melded bills from three Senate committees, would provide funding to spur production of advanced biofuels and new-technology vehicles, increase appliance and federal building efficiency, advance the demonstration of carbon sequestration technologies, increase corporate average fuel economy (CAFE) standards, and expand the renewable fuels production mandate. The bill would also create new civil and criminal penalties for gasoline "price gouging." An energy tax title was reported by the Senate Finance Committee by a vote of 15-5 on Tuesday (6/19) and is pending as an amendment to the bill (see details below).
Early in the debate, the Senate considered an amendment advanced by Senate Energy and Natural Resources (ENR) Committee Chairman Jeff Bingaman (D-NM), authorizing a federal "renewable portfolio standard" (RPS), that would require distribution over a certain size utilities to provide 15 percent of their power from renewable energy sources by 2020. A competing amendment was offered by the Committee's Ranking Member, Pete Domenici (R-NM), and was tabled (i.e. killed) by a vote of 56 to 39. The Domenici amendment would have created a "clean portfolio standard" (CPS) that would have allowed new nuclear, hydropower and clean coal technology with carbon sequestration capability, as well as energy efficiency measures, to count toward a federal mandate of 20 percent by 2020.
The Senate also voted down an a controversial amendment, advanced by Sen. Jim Bunning (R-KY), to give preference to coal-to-liquid (CTL) technology as an alternative fuel.
With CTL issue resolved, the fate of the bill may hinge on the two remaining most controversial issues: RPS and CAFE. Sen. Bingaman is determined have his RPS amendment adopted in the energy bill, but Sen. Domenici and Senate Republicans are sending signals that they may filibuster the bill if the RPS is included. As of now, it appears that Sen. Bingaman only has 56 votes, not the 60 votes needed to overcome a filibuster.
Determined to advance his RPS and the overall energy bill, Sen. Bingaman has engaged in "behind the scenes" efforts to reach some sort of compromise on the RPS amendment. There are reports that the RPS might be modified to allow roughly a quarter of the standard to be met with efficiency measures and to push the date of compliance out two years, to 2022. It is not clear that these changes would garner the needed four additional votes, however.
Senate Finance Reports Bill Out of Committee
As mentioned above, yesterday the Senate Finance Committee approved, by a vote of 15-5, the Energy Advancement and Investment Act of 2007, which provides a number of energy tax incentives of interest to NEPPA members. First, the $26.8 billion bill includes a five-year extension of the Clean Renewable Energy Bond (CREB) program, with a $900 million annual volume cap. Sens. Olympia Snowe (R-ME) and John Kerry (D-MA) worked with Sen. Maria Cantwell (D-WA) and committee staff on increasing the overall volume cap and extending the length of the program. A draft released late last week included a two-year extension and a $700 million annual allocation.
Two serious CREBS issues that still need to be addressed include: 1) the need to modify the definition of "governmental entities;" and 2) the inclusion of "transmission infrastructure" as an eligible project for CREB financing. During committee markup, Sen. Kerry, on behalf of NEPPA, asked about the inclusion of transmission infrastructure in the CREB program, indicating his concern that it would "eat up" the very limited volume cap and provide less funding for renewable generation investments. Morgan Meguire will work with Sen. Kerry and others on these issues as the bill advances.
The bill also includes a five-year extension of the Production Tax Credit for renewable energy resources. It also includes a five-year extension, championed by Sen. Snowe, for new energy efficient homes and provides increased deductions for energy efficient commercial buildings. NEPPA has endorsed the energy efficiency provisions as part of S. 822, the "DRIVE" Act, which Sen. Snowe introduced along with Sen. Dianne Feinstein (D-CA) earlier in the session. In addition, the Committee included a plug-in hybrid vehicle (PHEV) tax credit for light, medium, and heavy-duty vehicles, an investment tax credit to convert hybrid electric vehicles to PHEV, and truck stop electrification tax credits, among other things.
Lastly, the committee extended a 20 percent investment tax credit (ITC) for Integrated Gasification Combined-Cycle (IGCC) coal facilities and the 15 percent ITC for advanced coal-based electricity generation -- but tied the credit to projects that capture and sequester 70 percent of total carbon dioxide emissions. The committee also created a new tax credit bond proposal, called the Clean Energy Coal Bonds (CECB), for public power systems to help finance similar clean coal projects, and allocates $1.5 billion for such projects.
House Update: Energy & Tax Committees Move Forward
Today (June 20), two House Committees -- the Energy and Commerce Subcommittee on Energy and Air Quality (E&AQ) and the Ways and Means (W&M) Committee -- will mark-up their respective energy bills.
The E&AQ bill focuses on the following issues:
- Energy efficiency;
- Transitioning to a "smart" grid;
- Department of Energy loan guarantees;
- Promoting renewable fuel infrastructure;
- Promoting advanced battery and Plug-in Hybrid technologies; and
- Enhancing Energy Information Administration (EIA) data collection.
E&AQ Subcommittee Chairman Rick Boucher (D-VA) said several controversial topics, such as coal-to-liquids (CTL), alternative fuels and CAFE standards were eliminated from the draft measure and will not be addressed in this bill. He said these issues would be addressed when climate change legislation is advanced later in the 110th Congress.
In a statement he read during the markup, full Energy and Commerce Committee Chairman John Dingell (D-MI) stated that the committee would begin work on a CO2 emissions "cap and trade" bill in the fall, after the pending bill is signed into law.
The House W&M Committee's energy tax title includes a five-year extension of the production tax credit (PTC) for renewable resources, as well as a five-year extension of the Clean Renewable Energy Bond (CREB) program, with a $2 billion cap ($1.2B for public power). It also includes tax incentives for conservation, energy efficiency, alternative fuels, and PHEV.