House Approves Energy Bill with modified RPS

The 15% renewable portfolio standard passed by just 220 – 190 and a $15.3 billion tax package passed 221-189. Neither provision is in the Senate bill, nor is CAFE in the House bill, which ultimately passed 241-172. So the conference is going to be very interesting.

One key point on the RPS from E&E News (subs. req’d) is that to win passage, sponsors had to allow “up to 4 percent of the RPS to be met via energy efficiency measures” — which is not necessarily a bad idea, but only if the ee measures are rigorously defined and measured. So this is really an 11% RPS and 4% “EPS.”
Here are more details from E&E News:

Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) — a lead Senate supporter of the electricity mandate — indicated after the House vote that he will attempt to make that legislation a part of the Senate energy product. “I am pleased that the House adopted the Udall-Platts amendment, making renewable electricity conferanceable,” Bingaman said in a statement. “I look forward to working with the House when we get together on our bills this fall.”

Yet Senate Energy Committee ranking member Pete Domenici (R-N.M.) attacked the House legislation and in particular pointed to the electricity mandate and the tax package as potential stumbling blocks.

“This RPS scheme continues to have significant opposition in the Senate and would be a major obstacle to final passage of this bill,” Domenici said. “The Senate has passed much more reasonable legislation, while rejecting similar tax measures that would have resulted in higher prices.”

Other difficult issues are also on tap. The House scuttled a vote on boosting corporate average fuel economy (CAFE) mandate, but Democratic leaders there said they would like to come out of conference with essentially the Senate language, which would boost CAFE to 35 miles per gallon by 2020. Such a strategy is likely to run into opposition not only from House Republicans but also key Democrats such as House Energy and Commerce Committee Chairman John Dingell (D-Mich.).

Moreover, the Senate energy bill dramatically expands the federal mandate for renewable fuels and creates a new mandate for the use of cellulosic ethanol. No such language is in the House version, and Dingell has insisted these issues should wait until his committee develops an energy/climate change bill in the fall.

Further complicating the picture is a White House that had remained relatively quiet during much of debate but now appears to be digging in against the legislation. Shortly after the House approved the two bills, Energy Secretary Samuel Bodman again reiterated a veto threat.

“The bills will actually lead to less domestic oil and gas production and increased dependence on imported oil,” Bodman said. “Because [the bills] fail to deliver American consumers or businesses more energy security, but rather would lead to higher energy costs and higher taxes, the president’s senior advisors would recommend that he veto these bills.”

Industry, enviros gear up for conference

Lobbyists on both sides are looking ahead to a conference committee and alternative legislative proposals when Congress returns Sept. 4.

“As the old expression goes, there’s a great distance between lip and cup,” said Scott Segal, an attorney representing utilities and manufacturers. “This bill still has to go through conference. This bill may still be vetoed.”

Edison Electric Institute President Tom Kuhn noted the Senate could not get cloture on a 15 percent RPS mandate earlier this year. “The House vote is going to throw a wrench into House and Senate efforts to reconcile their two bills and produce something acceptable to both chambers,” Kuhn said.

A federal RPS standard could also interfere with a possible carbon based cap-and-trade bill expected this fall from Dingell and Rep. Rick Boucher (D-Va.), Segal said.

“In a lot of ways, [a renewable portfolio standard] marches in the opposite direction of what makes a trading program workable,” Segal said….

Saturday’s vote was the first time the House has considered a national RPS plan, and the Senate was unable to secure cloture on RPS earlier this year. Johnson said environmentalists are happy with the vote and potential support in conference from Speaker Pelosi, Bingaman and Rep. Edward Markey (D-Mass.).”Looking back to where we were two years ago, trying to stop EPAct, we’ve come a long way,” Johnson added.

In fact, it is now the oil and gas industry trying to stop congressional action. The House bill would revise the Energy Policy Act of 2005 provisions designed to accelerate energy production on public lands included by the Natural Resources Committee over the vocal opposition of oil and gas lobbyists and GOP lawmakers. The Senate bill does not contain similar language.

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