Hill Heat

To gain the 60 votes a cloture vote on the energy bill (H.R. 6) needs for success, Senate Majority Leader Harry Reid has dropped the Renewable Energy Standard provision from the package, which still contains the 35 MPG by 2020 CAFE standard, a 36 billion gallon by 2022 biofuels mandate, appliance and building efficiency standards, and a broad tax/green jobs package. The White House has threatened to veto the bill for the CAFE standards and tax package. Reid held a cloture vote on the House version last week, which failed by a vote of 53-42. The new cloture vote is scheduled for Thursday.

The tax package was reworked by Sen. Max Baucus (D-Mont.) and Charles Grassley (R-Iowa), the leaders of the Senate Finance Committee.

The reworked tax package, which remains at about $21 billion paid for mostly by closing loopholes that favor oil and gas companies, changes the terms of the renewable production tax credit extension. The extension is limited to two years but the cap on credit an individual project can receive is dropped.

Other modifications include a new category of tax exempt bonds for electric transmission facilities, a $2500 tax credit for plug-in hybrid conversion kits, and the removal of an incentive for the construction of natural gas distribution infrastructure. Enforcement of prevailing-wage restrictions under Davis-Bacon was also dropped.

The full description of the tax package (“The Clean Renewable Energy and Conservation Tax Act of 2007”) is below.

A roll call vote is expected at about 9:20 am on the motion to invoke cloture on the energy bill as passed by the House of Representatives on December 6.

By a vote of of 53-42 the cloture motion failed.

The following Democrats voted against cloture:

• Bayh (D-IN)
• Byrd (D-WV)
• Landrieu (D-LA)

The following Republicans voted for cloture:

• Coleman (R-MN)
• Collins (R-ME)
• Smith (R-OR)
• Snowe (R-ME)
• Thune (R-SD)

The following Republicans voted against cloture but previously had voted for the earlier Senate version of H.R. 6, which included the CAFE standard, but not RES or the tax title:

• Corker (R-TN)
• Craig (R-ID)
• Crapo (R-ID)
• Domenici (R-NM)
• Ensign (R-NV)
• Lugar (R-IN)
• Sessions (R-AL)
• Specter (R-PA)
• Stevens (R-AK)
• Sununu (R-NH)

The following Republicans voted against cloture but previously had voted for energy tax provisions similar to those in the House version:

• Crapo (R-ID)
• Lugar (R-IN)
• Grassley (R-IA)
• Roberts (R-KS)

Following the vote, the chamber resumed consideration of the farm bill (HR 2419).

07/12/2007 at 09:00AM

Final vote on energy package. The bill passes 235-181. The Senate vote is scheduled for Saturday.

Democrats against:

• Barrow
• Boren
• Boyd (FL)
• Gene Green
• Lampson
• Marshall
• Melancon

Republicans in favor:

• Bono
• Castle
• Gerlach
• Hayes
• Johnson (IL)
• Kirk
• LaHood
• LoBiondo
• Ramstad
• Reichert
• Ros-Lehtinen
• Shays
• Smith (NJ)
• Walden (OR)

06/12/2007 at 03:00PM

By a vote of 235-181, the House of Representatives passed the version of H.R. 6 which contains both House and Senate provisions (CAFE of 35 MPG by 2020, RES of 15% by 2020, oil/gas rollback with PTC, green jobs, and other provisions, RFS).

Rep. Edward Markey:

Today marks the dawn of a future with less dependence on foreign oil, more renewable energy, and a safer climate. This bill marks a turning point away from America’s untenable path of reliance on dirty fossil fuels that pollute our planet and link us to dangerous foreign regimes and towards a new energy independence future.

House leadership is whipping votes today for the energy bill deal, to be entitled the Energy Independence and Security Act when introduced. Highlights of the deal:

• CAFE Standard: Increase fuel economy standards to 35 miles per gallon by 2020 for new cars and trucks
• Renewable Fuels Standard: Multiple-source domestic biofuels mandate with environmental safeguards
• Plug-in hybrid/electric vehicle tax credit and advanced vehicle incentives
• Repeal of $21 billion in tax subsidies for gas and oil companies (H.R. 6), international tax loophole closed, rollback of 2005 Energy Act tax breaks
• Renewable Electricity Standard: 15% by 2020 (4% may be efficiency)
• Efficiency Standards: new appliance and building standards
• Renewable Production Tax Credit and other incentives: extends existing PTC, funds renewable research, provides renewable energy bonds for power providers
• Energy Efficiency and Renewable Energy Worker Training Program
• Incentives for small business development of renewable energy technology
• Carbon Capture and Sequestration: R&D and clean coal incentives

Full details of the legislation are below the fold.

In a letter to Congress, White House economic advisor Allan Hubbard reiterated President Bush’s October 15 veto threat of the energy bill deal brokered by the Democratic leadership, leaving no room for compromise from the president’s demands.

On October 15, I wrote you to outline a basic framework for a bill that would not compel the President’s senior advisors to recommend a veto. Based on the limitd information we have received, it seems the provisions under discussion would not satisfy those criteria. In fact, it appears Congress may intend to produce a bill the President cannot sign.

The Administration continues to believe that all the elements described in my earlier letter constitute the appropriate framework for energy legislation. Press reports indicate that your draft energy bill would fail to meet at least some of these conditions, for example by including a mandatory Renewable Portfolio Standard (RPS), a title increasing taxes, or an expansion of Davis-Bacon prevailing wage requirements.

Further criticisms include the difference between the Congressional renewable fuels standard and the White House’s preferred “alternative fuels standard”, and not excluding the EPA’s Clean Air Act authority from CAFE regulation.

The full letter is available here.

Friday afternoon the Democratic leadership in Congress announced the results of the energy bill negotiations that began in August and went into overdrive during the Thanksgiving recess, particularly once Rep. John Dingell (D-Mich.) signaled his willingness to support the 35 MPG CAFE standard as long as some technical provisions were included.

Speaker Pelosi:

CAFE will serve as the cornerstone of the energy legislation that will be on the House floor next week. We will achieve the major goal of increasing vehicle efficiency standards to 35 miles per gallon in 2020, marking an historic advancement in our efforts in the Congress to address our energy security and laying strong groundwork for climate legislation next year. We are confident that this final product will win the support of the environmental, labor and manufacturing communities.

This landmark energy legislation will offer the automobile industry the certainty it needs, while offering flexibility to automakers and ensuring we keep American manufacturing jobs and continued domestic production of smaller vehicles.

This comprehensive package will also include an increase in the Renewable Fuels Standard and a Renewable Electricity Standard, among other key provisions.

Translation of Pelosi’s statement:

“Offering flexibility to automakers”: The flex-fuel credit will extend to 2014, and be phased out by 2020.

“Continued domestic production of smaller vehicles”: The standards will distinguish between foreign-made and domestic vehicles

“Among other key provisions”: the status of the oil/gas subsidy rollback and related tax package, including the Production Tax Credit, is still under negotiation.

More details on the likely energy bill compromise are emerging. It appears that the renewable electricity standard and oil subsidy rollback provisions of the energy bill (H.R. 6/H.R. 3221), are being dropped, perhaps to be considered as a separate bill (per H.R. 2776) either concurrently or in the next year. The associated renewable incentives and research funds paid for by the rollback would have to also be dropped under pay-go rules.

The rollback was a key component of Speaker Pelosi’s 100 Hours Agenda:

We will energize America by achieving energy independence, and we will begin by rolling back the multi-billion dollar subsidies for Big Oil.

New York Times:

Reaching agreement on that timetable is likely to require Congressional leaders to drop provisions like a mandate that electric utilities nationwide generate 15 percent of their power from renewable sources, including wind, solar and hydroelectric power. Utilities lobbied intensively against that requirement.

A House-passed measure to repeal $16 billion in tax breaks for the oil industry is also expected to be scrapped, aides said. President Bush threatened to veto the entire package if the oil and gas tax bill were included.

Wall Street Journal:

Speaker Nancy Pelosi is pushing for a vote next week on compromise legislation aimed at reducing the nation’s reliance on fossil fuels, a major source of greenhouse gases. Democratic leaders have wrestled for months with how to meld the Senate bill, which includes a new fuel-economy mandate for auto makers, and the House bill, which would require power companies to use greater amounts of wind, solar and other renewable fuels. With only a few weeks left in the year, Democrats are now considering a new option: moving two separate bills.

One measure would include the proposed fuel-economy increase as well as a proposal to boost production of ethanol and related biofuels. The companion bill would include the utility mandate, as well as a tax package rolling back oil industry tax breaks.

According to a report in the National Journal’s subscription-only Congress Daily, Congress is nearing a compromise to resolve the differences between the Senate (HR 6) and House (HR 3221) versions of the comprehensive energy package. Major sticking points have been CAFE standards, renewable fuels mandate, a federal renewable energy standard, and renewable energy tax incentives (the renewable production tax credit (PTC)).

Speaker Pelosi indicated the sense of progress in a press release Monday:

Congress is now moving forward with historic energy legislation that will reduce our dependence on foreign fuels and promote energy efficiency. We have made significant progress toward completing this package and hope to have a final agreement next week.

The draft compromise, according to Congress Daily and Hill Heat sources, incorporates suggestions from Rep. John Dingell (D-Mich.)’s November 13 letter to Speaker Pelosi.

CAFE

• By 2020, 35 mpg average standard for cars, light trucks and SUVs (in line with HR 6)
• Separate fuel-economy standards for cars and trucks
• Distinctions between domestic and foreign-made vehicles in standards

Renewable Fuels Mandate

• By 2015, required production of 20.5 billion gallons of renewable fuels, with as much as 15 billion gallons coming from corn-based ethanol (HR 6 had 36 billion by 2022)
• By 2015, required production of 5.5 billion gallons of advanced biofuels—fuel not derived from sugar or starch and that can cut lifecycle greenhouse gas emissions in half
• National Academy of Sciences study within 18 months of mandate impact, followed by periodic reviews authorized by the Clean Air Act of technologies and the feasibility of complying with the mandate

PTC

• According to Hill Heat sources, the extension of the PTC is likely, though perhaps for as little as one year.

The Environmental and Energy Study Institute (EESI) invites you to learn about national renewable electricity portfolio standards such as the one included in the House energy bill (HR 3221, Sect. 9611) as the House and Senate go to conference on the energy bill. A Renewable Portfolio Standard (RPS) is a market-based mechanism that requires utilities to gradually increase the portion of electricity produced from renewable resources such as wind, biomass, geothermal, solar, incremental hydropower and marine energy. Twenty-five states and the District of Columbia have RPSs, covering over 40 percent of the nation’s electrical load. A national RPS has passed the Senate in the last three Congresses, although it is not included in the Senate energy bill (HR.6).

A national RPS has many attributes that can benefit all states, including lowering natural gas prices, providing manufacturing jobs, improving air quality, reducing greenhouse gas emissions and creating larger, stable markets for renewable energy technologies. A June analysis by the US Energy Information Administration (EIA) of a national RPS proposed by Senate Energy Committee Chair Bingaman (D-NM) requiring electric utilities to acquire 15 percent of their electricity from renewable energy sources by 2020, found net consumer cost to increase just 0.3 percent through 2030 compared to the reference case. EIA also found that by 2030, prices for natural gas and coal, two key fuels for the electric power sector, are lower with the RPS than in the reference case. Speakers for this event include:

• Leon Lowery, Majority Staff, Senate Committee on Energy and Natural Resources
• Chris Namovicz, Operations Research Analyst, Energy Information Administration
• Dr. Marie Walsh, Adjunct Associate Professor, Dept. of Agricultural Economics, University of Tennessee
• Jeff Deyette, Energy Analyst, Union of Concerned Scientists
• Bill Prindle, Deputy Director, American Council for an Energy-Efficient Economy

Some are concerned that not all states, particularly those in the Southeast, have sufficient renewable resources to satisfy a national RPS. In 2005, bioenergy was the largest component of renewable electricity production in the nation, comprising 56 percent of all renewable electricity and 1.3 percent of total electricity. This percentage can be increased significantly since each state has important biomass resources that can be utilized sustainably to produce clean, renewable, domestic energy. According to the EIA analysis, biomass generation-from dedicated biomass plants and existing coal plants co-firing with biomass fuel-grows the most by 2030, more than tripling from 102 billion kilowatt-hours (kwh) in the reference case to 318 billion kwh with the RPS policy. In addition to renewable energy, HR 3221 includes four percent energy efficiency (25 percent of the RPS credits) as part of the standard, which allows states to make use of low-cost efficiency opportunities to help meet the standard. At least three states (including Nevada, North Carolina, and Pennsylvania) include energy efficiency as part of their RPS. In August 2007, North Carolina enacted a Renewable Energy and Energy Efficiency Portfolio Standard requiring all investor-owned utilities in the state to supply 12.5 percent of 2020 retail electricity sales in the state from eligible energy resources by 2021.

01/11/2007 at 02:00PM