UPDATE – Senate deletes hydro benefits, passes energy bill

Senate Democrats finally deleted enough provisions from a House-passed energy bill to win Senate approval late Dec. 13. However, the deletions included tax incentives for renewable energy developers such as some types of hydropower.

The remaining bill, which passed 86-8, would increase fuel efficiency of U.S. cars and trucks for the first time since 1975 and significantly boost production of renewable motor fuels like ethanol.

Earlier the Democratic leadership dropped from the bill a controversial national renewable electricity standard, also called a renewables portfolio standard, which would have required electric utilities to generate 15 percent of their electricity from renewables by 2020 or to buy renewable energy credits. Incremental hydropower, hydrokinetic, ocean, and tidal energy were among renewable energy sources that would have been included.

Deleting the renewables portfolio standard failed to secure enough votes the morning of Dec. 13 to block a threatened filibuster. 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. (HNN 12/13/07)

Late in the day, Democrats also dropped from the bill about $13 billion in increased taxes on oil and gas companies, to appease Republicans who were ready to filibuster and to avoid a threatened White House veto.

Entire tax title deleted, including hydro benefits

However, in doing so, senators deleted the entire tax title from the bill, a Senate Energy Committee staff member said. That included $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 have expanded tax credits to include ocean and hydrokinetic projects.

Without the billions of dollars in new oil industry taxes, Democrats did not have the money to pay for the extension of the production tax credit, meaning the provisions had to be removed from the bill.

The Senate Energy Committee staff member confirmed the tax measures were removed from the bill. He said Energy Committee Chairman Jeff Bingaman, D-N.M., hoped to revisit the tax issues, including the renewables portfolio standard, in the next session of Congress.

Extended tax incentives seen as vital to hydro, renewables

More than 100 organizations and companies involved in renewable energy sent a letter to President Bush and both houses of Congress in October, urging action to extend federal tax incentives for renewables including hydropower and ocean energies. (HNN 11/1/07)

The groups, including the National Hydropower Association and many hydro industry companies, said the production tax credit for renewable energy plants, Clean Renewable Energy Bonds, and investment tax credits for commercial and residential solar and fuel cell technologies are vital to ensure continued growth in electricity production from renewables. The incentives, which will expire without extension, were expanded in the Energy Policy Act of 2005.

The modified bill now returns to the full House for a vote, expected the week of Dec. 17, on the changes the Senate made to the legislation. If approved by the House, as is likely, the measure would then be sent to President Bush. Shortly after the Senate vote, the White House said the president would sign the bill into law.

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