UPDATE – Senate drops renewables portfolio to salvage House energy bill

Senate Majority Leader Harry Reid says the Senate will drop a controversial renewables portfolio standard from a House-passed energy bill in hopes that will secure enough votes to win passage of the legislation.

The Senate leadership failed to win enough votes Dec. 7 to block a threatened filibuster by Republicans against the energy package, which contains language to benefit hydropower. (HNN 12/7/07)

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, Democratic leaders in the Senate could not muster 60 votes to prevent the Republican minority from debating the bill indefinitely. The vote to halt debate failed, 53-42.

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.

“It appears, at this stage, that we’re not going to be able to keep in the bill the renewable electric standard,” Reid, D-Nev., said Dec. 11. “We don’t have enough votes to keep it in.”

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.

Senate leader seeks vote before holiday break

Reid said he wanted the Senate to vote Dec. 13 to limit debate on the energy bill so the measure could clear Congress before lawmakers adjourn for the year. After the Senate votes, the amended legislation would have to go back to the House for its approval and then be sent to President Bush to sign into law.

Although Reid predicted there would be “far more than 60 votes” to approve the revised package, it was unclear whether Senate Republicans or the president would go along with other 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.

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)

Bill includes 15 percent national renewable electricity standard

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.

The measure would exempt municipal and other publicly owned utilities, federal agencies, rural electric cooperatives, and small private utilities. It also would permit utilities to use energy efficiency savings to meet up to 4 percent of their targeted 15 percent and to give utilities more time to ramp-up renewable energy sales.

Bill extends tax credits, raises limit on energy bonds

The bill’s renewables production tax credit provisions would extend for four years the in-service date for eligible renewables including incremental hydropower at existing plants and hydropower added to non-powered dams. The date would be extended to Jan. 1, 2013, from Jan. 1, 2009.

Ocean and hydrokinetic renewable energy technologies also would be added to technologies eligible for production tax credits.

The bill’s total $21.5 billion tax package would establish a new national bonding limitation of $2 billion for the Clean Renewable Energy Bonds program. The legislation would require that one third of the $2 billion be allocated to public power, one third to government bodies, and one third to electric cooperatives.

Additionally, the tax title includes a provision that would support research and development to bring technologies producing electric power from ocean waves to commercial readiness.

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