Lawmakers Reach Energy Compromise

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The New York Sun

WASHINGTON – Lawmakers scaled back support for energy conservation and efficiency programs as part of an $11.5 billion tax package expected to be added today to a sweeping energy bill that Congress hopes to complete this week.


The agreement, worked out in closed meetings of House and Senate negotiators, funnels about 60% of the tax breaks – about $8.5 billion – to traditional energy industries including coal, natural gas, and electric companies. Many of the incentives are aimed at promoting new energy technologies.


Efficiency and conservation programs would get $1.3 billion, about a third of what the Senate had approved for such programs when it passed its energy legislation in June. In many cases the savings were achieved by shortening the duration that tax breaks will be available. About $3 billion goes to renewables, mostly tax breaks for wind turbines.


Senator Bingaman of New Mexico, the ranking Senate Democrat on the panel that forged the energy compromise with the House and who was also involved in the tax negotiations, said the reductions in tax breaks for energy efficiency “is greater than I had wanted.”


Nevertheless, Mr. Bingaman said he supports the overall bill.


“Given the makeup of the Congress today and given the policies of the administration, this is as good a bill as I think we could hope to get,” said Mr. Bingaman. He also failed in the House-Senate negotiations to get a provision requiring utilities to use renewable fuels to generate at least 10% of their electricity, a measure that the Senate has passed several times but was opposed by House Republicans.


Senator Domenici, a Republican of New Mexico who headed the Senate side negotiating the bill, said the measure will help diversify the nation’s energy portfolio by spurring development of new technologies from the next generation of nuclear reactors to ways to burn coal with less smog-causing and climate-changing pollution.


“We mandate more conservation and higher efficiency,” said Mr. Domenici, citing among other things new efficiency standards for 14 commercial appliances such as large refrigerators and cooling systems.


Completion of the tax package, which includes about $14.1 billion worth of tax breaks and incentives offset by $2.6 billion in new tax revenue, set the stage for final approval of the bill in the House and Senate.


The House was likely to take up the measure as early today, followed by the Senate tomorrow or Friday. President Bush had challenged Congress to complete an energy bill before leaving for the August recess after four years in which repeated attempts to enact a broad national energy agenda failed because of regional disputes or environmental fights.


While the bill was expected to get bipartisan support, some lawmakers criticized the legislation for failing to do enough to curtail the country’s thirst for oil.


The New York Sun

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