Last week, House Speaker Nancy Pelosi (D-CA) held a meeting with chairmen of committees that contributed to the House "energy independence" bill. At the meeting, the Speaker announced that leadership is going to try to finalize the pending energy bill without formally going to conference with the Senate, via an informal agreement between the two chambers on what provisions to include. A new bill based on that agreement would then be considered by the House under a rule that would permit few or no amendments. Upon House passage, the same measure would need to be passed by the Senate, with no amendments.
Though unusual and far from a "done deal," Pelosi and Senate Majority Leader Harry Reid (D-NV) have passed other legislation recently in a similar manner, such as the ethics/lobbying reform bill. However, Senate Energy and Natural Resources Committee Ranking Member Pete Domenici (R-NM) criticized Speaker Pelosi's attempt to avoid a conference in favor of a "closed-door" process.
The House and Senate have passed differing versions of the bill and they differ on several key, controversial issues. The House bill contains an RPS (with an exemption for public power and coops) and a tax title. The Senate bill contains neither, but it raises Corporate Average Fuel Economy (CAFE) standards for vehicles and includes a mandate for production of alternative transportation fuels, which the House bill does not.
Facing a veto threat from the White House, primarily over oil and gas issues, Pelosi said that she and Senate Majority Leader Harry Reid (D-NV) would be working with the White House with the goal of giving the President a bill he can sign.
Early inside rumors are that there will be an RPS, and that the exemption for public power will likely not hold. However, it is questionable if the House tax title, which includes an extension of the Clean Renewable Energy Bonds for public power and the production tax credit for private developers, will make it in the final cut.
On Monday, October 15, House Science Chairman Rep. Bart Gordon (D-TN), searching for vehicles for a compromise member of the Energy and Commerce Committee, wrote a letter to individual utilities and other stakeholders requesting input on the Renewable Portfolio Standard (RPS) provision in the House energy bill. Gordon voted against the RPS when it was offered on the House floor, but as negotiations begin on a final "energy independence" bill, he hopes to find options that would make such a requirement more "reasonable, balanced and flexible." He is seeking input on several key modifications that he thinks could provide greater flexibility with the RPS. They are:
- Inclusion of demand response: This means that the RPS would include a way for utilities to shift demand away from peak times and receive renewable credits for doing so. It can reduce the need to bring more power plants online during peak periods.
- Petition requirement: The way the RPS is drafted, energy efficiency measures can only be used to meet up to 4% of an RPS and to do so would require the Governor to petition the Secretary of Energy. Since utilities would be the entities affected by the RPS and since most cover areas that encompass parts of several states, this provision creates unnecessary bureaucracy. Either the petition requirement should be removed or it should be amended to allow utilities to petition the Secretary of Energy directly.
- Expand energy efficiency credit: Since energy efficiency is such an important component of the House RPS, states and utilities should be allowed to petition the Secretary of Energy to meet up to 5% of the RPS requirement. The current bill allows only 4% of the RPS to be met through energy efficiency measures.
- Transmission of renewable power: Since an RPS will probably result in renewable energy being transmitted over great distances, the RPS could include reduced electric transmission rates for renewable power when transmitted over these distances.
- Definition of renewable energy/energy efficiency: Although the House language defines the types of energy that qualify as renewable, it is likely that new technologies will emerge between now and 2020. Therefore, the RPS should include a provision to grant the Secretary of Energy the discretion to broaden the definitions of renewable energy and energy efficiency as new technologies develop.
- R&D credit for technology: In order to ensure that we invest in emerging clean technologies, utilities should be given some credit for investing in them.
- Compliance Payments "Fund": The House RPS language sets up a fund that would return to states the revenues from RPS compliance payments for investment in renewable energy and energy efficiency. The language is vague as to what the funding should be used to pay for. The fund could be used to increase Federal R&D investments and/or provide additional Federal energy tax incentives.