House Will Attempt to Pass Energy Tax Package House Speaker Nancy Pelosi (D-CA) plans to bring a stand-alone renewable energy tax package to the House floor for a vote, possibly as early as next week. The bill, H.R. 5351, the Renewable Energy and Energy Conservation Tax Act of 2008, would boost incentives for clean energy and energy efficiency that are "paid for" by cuts in taxes to the oil and gas industries.
H.R. 5351 would provide $2 billion in new Clean Renewable Energy Bonds (CREBs)for public power and cooperatives to use to finance eligible renewable projects. The language also includes the technical corrections to the program that Rep. Jim McDermott (D-WA) has championed and public power advocated, including changing the allocation method from "smallest to largest" projects to pro-rata, and directing that the $2 billion go to only public power utilities with an obligation to serve and electric cooperatives.
As far as outlook for the energy tax bill, it is expected to pass in the House when it is brought up, but will face a tougher battle in the Senate, given that Republicans and the White House still adamantly oppose its being "paid for" by the oil and gas industries.
McDermott Asks Treasury for More Data on Recent CREB Allocations
On February 14, Rep. Jim McDermott (D-WA) sent a letter to the Secretary of the U.S. Treasury Department, Henry Paulson, asking for more detailed information on the size and scope of the recent Clean Renewable Energy Bonds applications. On February 8, the Internal Revenue Service (IRS) announced that 312 projects had been selected to be financed with tax-credit bonds in the second round of volume cap allocations under the CREB program. The first round of allocations was distributed in November 2006.
In its February 8 announcement, the IRS did not release any information on those entities that applied for but did not receive allocations, or any detailed information on the projects that were awarded CREBs. The data will be helpful as Congress works to reform the program to make it more effective for public power systems.
Rep. McDermott sent a similar request last year and the Treasury Department did provide the information. McDermott has asked Treasury for the information by March 14, 2008.
Climate Debate Shifts as Romney Ends Presidential Bid
As Mitt Romney ended his bid for the Republican nomination on February 7th, the overall debate on climate change shifted. Now all front-runners in the Presidential race concur that climate change is real and is a problem that needs to be addressed. Sens. McCain (R-AZ), Hillary Clinton (D-NY) and Barack Obama (D-IL) believe that mandatory limits on emissions of greenhouse gases (GHG) should be instituted. In fact, in the last two Congresses, Sen. McCain co-sponsored and actively advocated for climate change legislation with Sen. Joe Lieberman (I-CT), similar to the more current Lieberman-Warner bill under consideration in the Senate. Some economists and political observers now believe that the U.S will set a mandatory limit on GHG in the next three years.
Federal Appeals Court Strikes Down EPA Cap-and-Trade Mercury Regulation
On February 8, a federal appeals court struck down the Bush Administration's attempt at regulating mercury emissions from coal-fired power plants. Under the Bush plan, utilities would have been given maximum flexibility, within a cap- and -trade program, to reduce mercury emissions.
The decision is a blow to the electric power sector, which has spent four years preparing to implement the new program that was created under the Clean Air Mercury Rule (CAMR). Environmentalists viewed the decision as a major victory that will require EPA to hold utilities accountable for more stringent reductions in mercury emissions.
Klobuchar, Snowe and Cantwell Introduce Energy Tax Incentives, RPS Bill
On February 14, Sen. Olympia J. Snowe (R-ME) joined Sens. Amy Klobuchar (D-MN) and Maria Cantwell (D-WA) in introducing the American Renewable Energy Act, which includes long-term extensions of renewable energy and energy efficiency tax incentives and a federal renewable portfolio standard (RPS).
The bill includes the Clean Renewable Energy Bond (CREB) extension approved by the Senate Finance Committee last year. Specifically, it extends the CREB program for four years and authorizes $900 million in annual allocations, with 60 % of that going to governmental entities and at least half of that going to projects over $10 million. It would also allow transmission facilities to qualify for CREB financing.
The bill also includes the RPS advanced by Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) last year that requires utility companies to produce at least 20 percent of their electricity from renewable sources by the year 2025. It includes public power but exempts utilities that sell less than four million megawatts of retail electric energy to consumers.