Today (6/17), Senate Democratic leaders tried again today to pass a package of renewable energy and energy efficiency tax incentives as part of a broader tax "extenders bill." Once again, the cloture motion (i.e. to limit debate and proceed to the bill) failed, by a vote of 52-44, largely along party lines. Sixty votes are needed to invoke cloture.
The bill, the Renewable Energy and Job Creation Act (H.R. 6049), which passed the House on May 21 by a vote of 263-160, extends various tax incentives for clean energy development, individuals, and businesses. The Senate first tried on June 10 to invoke cloture on a slightly modified version of the House-passed bill, but it failed by a vote of 50-44.
Both today's and last week's votes were partisan, with only several Republicans joining the Democrats in voting for cloture both times; on June 10, Sens. Olympia Snowe (R-ME), Gordon Smith (R-OR) and Bob Corker (R-TN) voted with Democrats and today, Sens. Susan Collins (R-ME) and Norm Coleman (R-MN) also voted in favor.
Republican opposition continues to focus on the "offsets" included in the bill, which Senate Finance Committee Ranking Member Charles Grassley (R-IA) and others characterize as "tax increases."
Substantively, the House and Senate versions of H.R. 6049 are similar, and include extensions of the production tax credit for renewable energy, investment tax credit for solar power, and the Clean Renewable Energy Bond (CREB) program, among other things. Specifically, it includes $2 billion in additional bonding authority for CREBs and the technical fixes public power has been advocating.
It is unclear how Senate Majority Leader Harry Reid (D-NV) and Finance Committee Chairman Max Baucus (D-MT) will now proceed - whether they will continue to push for additional cloture votes on the same package, drop the "offsets" that Republicans oppose (which would then face obstacles in the House), or wait until the "lame duck" session to advance a smaller package. If they do the latter, it is likely that Democrats will try to advance a larger, more robust package of incentives in the next Congress, when Democrats hope to pick up additional seats in both chambers.
It is also possible that the 110th Congress will not act on "extenders," given the partisan climate in Washington. If that is the case, it is rumored that the Senate Finance and House Ways and Means Committee Chairmen may issue a statement indicating their support for a seamless extension of all expiring provisions on a retroactive basis.
Senate Hearing on the Need for Regional Solutions to Building Transmission to Renewable Resources
Today (6/19), the Senate Energy and Natural Resources Committee held a hearing to examine the challenges and regional solutions to developing transmission for renewable electricity resources. Members in attendance at the hearing included Chairman Jeff Bingaman (D-NM), Ranking Member Pete Domenici (R-NM), and Sens. Byron Dorgan (D-ND), Bernie Sanders (I-VT), Gordon Smith (R-OR), Tim Johnson (D-SD), and John Barrasso (R-WY).
The witnesses included Sen. Harry Reid (D-NV); Kevin Kolevar, U.S. Department of Energy; T. Boone Pickens, BP Capital, Dallas; Rich Halvey, Western Governors Association; Bryce Freeman, Wyoming Infrastructure Authority; Stephen Wright, Bonneville Power Administration,; Don Furman, Iberdrola Renewables, representing the American Wind Energy Association; Gary Hanson, South Dakota Public Utilities Commission; and Will Kaul, Great River Energy on behalf of CapX 2020.
Generally, the Senators and witnesses all agreed that the single largest impediment to the development of renewable energy was the lack of transmission capacity to bring the alternative energy to load. There was also widespread agreement that siting and costs were the two of the biggest obstacles to building new transmission.
However, consensus on specific solutions on how to address these issues -- planning and siting, cost allocation, and the integration of intermittent resources - was more complicated. Some witnesses, including those from the Department of Energy, Western Governors Association, and Bonneville Power Administration, advocated for regional solutions and described their successes by employing this approach. Commissioner Hanson also advocated for a regional approach to transmission, but in his case, described how failure to do so has delayed projects.
Mr. Freeman, from the Wyoming Infrastructure Authority, advocated for tax-exempt bonding authority for state transmission authorities to help reduce the cost of capital financing.
Others suggested that joint planning and ownership options, like those pursued by CapX 2020 in Minnesota, have been successful in helping to advance transmission development. The CapX 2020 initiative involves cooperatives, investor-owned and municipal utilities in the planning, financing and ownership of transmission. Mr. Pickens, of BP Capitol, on the other hand, focused his testimony on the idea that the U.S. should break its dependence on foreign oil by using wind generation to replace natural gas for electricity generation, so that natural gas can be used for the transportation sector. He also said that the capital by private investors and companies is out there, but Congress needs to adopt clear, predictable policies if they are to invest; he said the production tax credit was key to providing this direction.
Finally, Sen. Reid testified strongly about the need for additional renewable energy and went on to explain his bill (S. 2076) that would create federal renewable energy zones and direct how the lines are to be financed.
House Subcommittee on Energy & Air Quality to Hold Climate Hearing
House Energy and Commerce Committee Chairman John Dingell (D-MI) announced in a press release that the Subcommittee on Energy and Air Quality will hold a series of hearings on climate. The hearings will examine current legislative proposals including:
- H.R. 1590, the Safe Climate Act of 2007, sponsored by Rep. Henry Waxman
(D-CA),
- H.R. 6186, the Investing in Climate Action and Protection Act, sponsored by
Rep. Ed Markey (D-MA),
- S. 3036, the Lieberman-Warner Climate Security Act of 2007, sponsored by
Sen. Barbara Boxer (D-CA), and
- S. 1766, the Low Carbon Economy Act of 2007, sponsored by Sen. Jeff Bingaman (D-NM).
The first hearing is scheduled for June 19 and will include witnesses from the National Mining Association, Natural Resources Defense Council, United Auto Workers, Business Council for Sustainable Energy, Edison Electric Institute, Nuclear Energy Institute, Evangelical Lutheran Church in America, The Fertilizer Institute, the American Petroleum Institute, among others.
Staff from Morgan Meguire, NEPPA's Washington Representatives, will cover the hearing.
Boucher Introduces Carbon Capture and Storage Bill
On June 12, Rep. Rick Boucher (D-VA), Chairman of the Subcommittee on Energy and Air Quality, introduced legislation to accelerate the availability of carbon capture and storage (CCS) technology, entitled the Carbon Capture and Storage Early Deployment Act. The bill, which has bipartisan support, would advance efforts to develop the technology to capture and inject carbon dioxide emitted from electricity generation plants into underground reservoirs.
The bill would establish a $1 billion annual fund, which would be collected from fees on the generation of electricity from coal, oil and natural gas to provide grants to large-scale projects that would advance the commercial availability of CCS. The bill would also give the owners of qualified industries organizations the option to decide if they want to create a "Carbon Storage Research Corporation," which would operate as an affiliate of the Electric Power Research Institute (EPRI) and be tasked primarily with issuing grants and contracts (from the $1 billion annual fund) to private, academic and governmental entities with the purpose of accelerating the commercial demonstration or availability of carbon dioxide capture and storage technologies.
Boucher does not view this as a substitute for a cap-and-trade program; rather as a needed first step before implementing such a program. In a press release, Boucher said that "Coal is America's most abundant domestic fuel, and today, coal accounts for more than one-half of the fuel used for electricity generation...preservation of the ability of electric utilities to continue coal use is essential. The legislation introduced today addresses this clear need by enabling electric utilities that use coal to have the continued ability to do so when a mandatory program is implemented to control greenhouse gas emissions."
The legislation has been endorsed by many industrial organizations, including the United Mine Workers of America, Duke Energy, and the Salt River Project, among others.
Dingell Writes CFTC on Concerns about Energy Market Speculation
Today (6/17), Chairman of the House Energy and Commerce Committee, John Dingell (D-MI) and Chairman of the House Subcommittee on Oversight and Investigations, Bart Stupak (D-MI), sent a letter to the Acting Chair of the Commodity Futures Trading Commission (CFTC), Walter Lukken, expressing concern over the lack of transparency to regulators and the public regarding energy futures markets.
The letter questions the increases in crude oil prices from $68/barrel a year ago to nearly $140/barrel today, and inquires as to whether the commodity index investments have caused prices to deviate from economic fundamentals.
"In particular, Congress needs to better understand the role and activities of Sovereign Wealth Funds in commodity markets in order to assess whether or if any of the oil producing nations may be contributing to the upwards pressure on commodity prices through undisclosed investment in energy or other commodities. We were interested to learn that all five commodity dealers represented at the CFTC's June 10, 2008, Energy Markets Advisory Committee meeting (Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers, and D.E. Shaw) had Sovereign Wealth Funds as clients," Dingell and Stupak said in their letter.
The Oversight and Investigations Subcommittee held a hearing on energy speculation in December of last year and is scheduled to hold a second hearing on Monday, June 23rd.