UPDATE – Senate stalls House-passed energy bill containing hydro benefits

The Senate leadership failed to win enough votes Dec. 7 to block a threatened filibuster by Republicans against an energy package, containing hydropower benefits, that passed the House the day before.

The House passed a new energy bill Dec. 6 that 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. (HNN 12/6/07) The package also would expand tax credits to include ocean and hydrokinetic projects.

Although the Democratic-controlled House passed the package, 235-181, sending it to the Senate, Democratic leaders in the upper chamber could not muster 60 votes to prevent the Republican minority from debating the bill indefinitely. The vote to halt debate failed, 53-42.

Democrats now have little choice but to change the bill in an attempt to gain more Republican votes. Analysts say the bill is unlikely to survive in its current form, but a stripped-down version could become law if lawmakers drop a controversial renewables portfolio standard and language eliminating oil industry tax incentives.

Not only did Senate Republicans says they would filibuster to block the current bill, the White House has said President Bush would veto it.

House Democrats introduced the 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 extends tax credits, raises limit on energy bonds

The Clean Renewable Energy and Conservation Tax Act of 2007, the tax title of the energy legislation, includes a four-year extension of the in-service date for incremental hydropower at existing plants and hydropower added to non-powered dams. The date is 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.

Bill includes 15 percent national renewable electricity standard

The energy section of the legislation, the Energy Independence and Security Act (H.R. 6), would establish a 15 percent national renewable electricity standard, also called a renewables portfolio standard. That mechanism 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.

White House promises veto

The White House indicated senior advisers would recommend that President Bush veto the bill in its present form. The Executive Office of the President, Office of Management and Budget, issued a statement in which it said, �the bill contains several highly objectionable provisions that would impose higher costs on American taxpayers, electricity consumers, and businesses.�

The administration’s principal objections, as identified by the Office of Management and Budget, include the repeal of about $13 billion in tax incentives extended to oil and gas companies, to help pay for the renewables incentives.

The administration also continued to object to a national renewable electricity standard for power generation, claiming a federal mandate would ignore the specific energy and economic needs of individual states, many of which lack wind or other renewable resources.

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