UPDATE – Senate passes energy bill minus new hydro incentives

The U.S. Senate passed an energy bill late June 21, focusing on motor fuels and shunning amendments to add clean energy tax incentives or a renewables portfolio standard that would have provided new incentives to some hydropower and ocean technologies.

Minutes before midnight, the Senate voted 65-27 to approve the Democratic rewrite of U.S. energy policy, which would mandate a four-fold use of ethanol in motor gasoline by 2022 and raise vehicle fuel-efficiency standards by 10 miles per gallon, to 35 miles per gallon by 2020.

Earlier in the day, Senate leaders dropped a proposed amendment to add $32 billion in clean energy tax incentives to the bill after Republicans objected to $29 billion in extra taxes on U.S. oil companies to fund the incentives. (HNN 6/21/07)

The Senate Finance Committee had endorsed a package of energy tax incentives June 19, including five-year extensions for the renewable electricity production tax credit and Clean Renewable Energy Bonds offered to renewable energy projects including some hydropower. The proposal also would have added ocean wave, current, and tidal energy as qualifying energy sources.

The Senate was unable to secure 60 votes to prevent a threatened filibuster by Senate Republicans against the Finance Committee language, which was to be added to the energy bill already being debated on the Senate floor. To end the stalemate that was delaying action on the overall bill, the Finance Committee package was withdrawn, securing sufficient votes to allow the energy bill to proceed.

The final bill barely scraped by a procedural vote late June 21 after Republicans raised concerns that Democrats could try to revive the scuttled $32 billion tax package in a conference committee bargaining session with the House.

“If anyone is concerned about some trick to put this energy tax package in the bill … they need to tell me how,” Majority Leader Harry Reid, D-Nev., said, adding such a move would be close to impossible.

The Finance Committee plan would have revoked about $13 billion in oil company tax incentives and imposed $16 billion in new taxes on oil companies. Republicans warned that the new taxes would chase oil companies away from American oil basins and boost gasoline pump prices.

“It’s very easy politically to stick it to the big boys and that’s the political game that’s being played out on the floor of the United States Senate,” said Sen. Larry Craig, R-Idaho, who was among the Republicans who voted to block the tax package.

The Senate also failed to revive a renewables portfolio standard amendment by Senate Energy Committee Chairman Jeff Bingaman, D-N.M. Senators balked previously at Bingaman’s amendment, proposing a requirement that, by 2020, 15 percent of U.S. electricity supplies be generated by renewable energy sources, including incremental hydropower installed at existing hydro plants or water resources facilities. It also would have included energy from wave, tidal, or other ocean-powered projects.

House panel backs extending tax credit, renewables bonds

In the House, the Ways and Means Committee approved June 20 its own version of energy tax legislation, including some provisions similar to the Senate Finance Committee measure (HNN 6/21/07).

Like the ill-fated Senate committee plan, the bill includes time extensions for the renewable electricity production tax credit and Clean Renewable Energy Bonds. The bill, endorsed by the committee, 24-16, also would make ocean power technolgies eligible for credits, which currently are offered to renewables developers including incremental hydropower added to existing projects.

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