Senate approves energy plan 88-11

By Sylvie Dale, Online Editor

WASHINGTON, D.C., April 26, 2002 — The U.S. Senate on Thursday approved (88 to 11) its version of the energy bill, which contains billions of dollars in tax incentives.

The long anticipated plan, spurred by President George W. Bush’s energy policy a year ago, seeks to address the nation’s future energy needs. The Senate bill includes $14 billion in tax incentives over 10 years, divided between renewable energy and conservation programs and fossil fuel energy producers. (The House version calls for $33 billion in tax incentives which lean toward the oil, gas, coal and nuclear industries.)

Other highlights in the Senate version include:

“- More authority for federal regulation of the wholesale electricity markets and transmission systems;

“- Repeal of the Public Utility Holding Company Act (PUHCA) of 1935, which limits the operations of electricity holding companies;

“- A requirement for generators to produce 10 percent of their electricity by 2019 from renewable fuels;

“- Federal loan guarantees intended to get private companies interested in building a $20 billion pipeline to transport natural gas from Alaska’s North Slope;

“- Consumer tax credits for the installation of solar panels, additional insulation or energy-efficient windows, doors, air conditioners and heat pumps;

“- A ban on use of the fuel additive MTBE;

“- A requirement to use more ethanol in gasoline.

Missing from the Senate version is provision for oil drilling in the Arctic National Wildlife Refuge, an item Republicans have already promised to revive when the Senate and House versions are reconciled.

The legislation contains a series of tax incentives for independent oil and gas producers. The bill also carves out a greater role for national laboratories in their efforts to research and develop new energy technologies. Additionally, it contains provisions that would spur energy development on Indian lands.

“This legislation is the result of six weeks of debate and was approved with overwhelming bipartisan support,” said Sen. Jeff Bingaman, chairman of the Senate Energy and Natural Resources Committee. “It doesn’t tackle every challenge I was hoping we would address, but it does lay out a plan for meeting the nations future energy needs through a combination of increased production of traditional fuels and increased use of emerging energy sources.”

Democrats said the bill provides a balance between energy production and conservation, plus gives encouragement for end consumers to practice energy conservation, the Associated Press reported.

President Bush said the House and Senate energy bills include the major conservation and environmentally responsible production measures needed to reduce the nation’s reliance on foreign sources of energy.

“I am pleased that the House-Senate Conference Committee will have before it the elements of a comprehensive energy policy,” Bush said.

“The two bills reflect my Administration’s call to provide tax incentives for alternative and renewable fuels and technology; modernize our electricity laws; open a small portion of ANWR to responsible exploration; increase automotive fuel efficiency while protecting American lives and jobs; and ensure continued safe operation of our nuclear facilities.”

North American Electric Reliability Council (NERC)

The North American Electric Reliability Council (NERC) applauded the legislation, which it says will help ensure the continued reliability and security of the North American bulk electric system.

The bill authorizes the creation of an industry-based, North America-wide electric reliability organization, or ERO, to develop and enforce the standards needed to protect the reliability of the electric grid.

The reliability provisions provide for FERC oversight in the United States, ensure the full and equal participation of Canada and Mexico and protect the important roles of the states and regions in supporting the reliability of the interconnected North American electric grid.

Copies of the reliability portion of this bill and related NERC testimony can be found on NERC’s web site at: http://www.nerc.com/about/legislation.html .

Electric Power Supply Association (EPSA)

The Electric Power Supply Association (EPSA) said that while none of the industry stakeholders got everything they wanted, the legislation represents progress toward a level playing field for all competitors.

“At its core, it promotes the efficiency gains that are possible when all participants and regions play by the same rules,” EPSA President Lynne H. Church said.

“This legislation also has a few drawbacks, including a cumbersome and inefficient reliability mandate. However, it implicitly endorses the ultimate jurisdiction and pro-competitive policies of the Federal Energy Regulatory Commission (FERC) with regard to the design and operation of interstate markets.”

EPSA’s web site is at http://www.epsa.org .

National Rural Electric Cooperative Association (NRECA)

The National Rural Electric Cooperative Association (NRECA) said that the Senate’s version is a bill that consumer-owned electric cooperatives can support because it helps them avoid unnecessary costs and excessive regulation.

At the same time, it urged Congress to protect against the accumulation of market power among the largest generators and wholesalers of electricity.

Alliance to Save Energy

The Alliance to Save Energy, a coalition of prominent business, government, environmental, and consumer leaders who promote the efficient use of energy, said the bill had a “pitiful showing” on energy efficiency, referring to the recent rejection of an amendment for stronger efficiency standards on air conditioners and the rejection of a measure requiring the Department of Transportation to reduce gasoline consumption by 1 million barrels of oil a day by 2015.

“These two provisions would have protected the nation’s economic security, bolstered the reliability of the electric system, saved consumers billions of dollars, and significantly reduced pollution,” said Alliance to Save Energy President David M. Nemtzow.

The alliance was also disappointed with the bill’s handling, or lack thereof, of fuel economy, but it did praise the Senate for its $3 billion tax package including tax credits for energy-efficient homes, washers, refrigerators, heating and cooling systems, windows and insulation.

Environmentalists criticized the Senate bill, saying it doesn’t go far enough to conserve energy or encourage environmentally friendly methods of energy production.

For more details on the bill, including complete bill text, visit http://thomas.loc.gov/cgi-bin/bdquery/z?d107:S.517:.

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