UPDATE – Senate again spurns House energy bill with hydro language

The Senate again refused to prevent a filibuster against a House-passed energy bill Dec. 13, despite deletion of a controversial renewables portfolio standard that had been the source of many senators’ objections.

A Senate cloture vote — to limit debate — failed, 59-40, one vote short of the 60 votes needed to prevent the filibuster threatened by minority Senate Republicans. The vote was a setback for Senate Majority Leader Harry Reid, D-Nev., who had predicted he had 60 votes to proceed. (HNN 12/12/07)

The Democratic leadership was expected to make additional changes to the bill in attempt to secure a few more votes.

The Democratic-controlled House voted, 235-181, on Dec. 6 to pass the bill, which contains $9 billion in tax incentives for renewable energy sources, including extension of expiring federal production tax credits and clean renewable energy bonds for some forms of hydropower. The package also would expand tax credits to include ocean and hydrokinetic projects.

However, the Senate failed, 53-42, on Dec. 7 to block a threatened filibuster against the energy package, which contains language to benefit hydropower.

Senate Republicans mainly objected to the controversial renewable electricity standard, also called a renewables portfolio standard, and to language eliminating oil industry tax incentives in order to finance renewables incentives. Southern utilities lobbied strongly against the electricity standard, arguing there were few renewable energy sources like strong wind currents in their region, forcing them to rely on non-renewables.

Although Reid had predicted there would be “far more than 60 votes” to approve the revised package, it had remained unclear whether Senate Republicans or the president would go along with remaining provisions that would repeal about $13 billion in tax incentives extended to oil and gas companies. The White House has warned that the president would reject the bill if it came to his desk in its current form with billions of dollars in taxes on oil and natural gas companies.

Before the Dec. 13 vote, Sen. Pete Domenici, R-N.M., the ranking Republican on the Senate Energy Committee, warned his colleagues that passing the bill with taxes opposed by the White House would doom the measure.

“It’s a wasted time and effort to pass a bill with $21 billion worth of the taxes,” Domenici said. “It can’t be done.”

House Democrats introduced the current bill after it became apparent a previous bill passed by the House in August and a vastly different bill passed by the Senate would not be reconciled. (HNN 11/1/07)

The controversial national renewable electricity standard language would require electric utilities to generate 15 percent of their electricity from renewables by 2020 or to buy renewable energy credits to meet the standard. Incremental hydropower, hydrokinetic, ocean, and tidal energy meet the bill’s definition of renewable energy and would count toward meeting the standard.

Bill extends tax credits, raises limit on energy bonds

The most recent version presented to the Senate only proposed to extend the renewables production tax credit for two years — instead of the House’s four years — for eligible renewables including incremental hydropower at existing plants and hydropower added to non-powered dams. Ocean energy technologies also would be added to those eligible for production tax credits.

The bill’s total $21.5 billion tax package also would establish a new national bonding limitation of $2 billion for the Clean Renewable Energy Bonds program for public power generators.

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