US House Panel Clears Energy Portion Of Stimulus Package
1-22-09 5:51 PM EST By Siobhan Hughes Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- A Democratic effort to include more than $50 billion in energy-project spending in a U.S. economic stimulus package advanced rapidly through Congress as companies jockeyed to reshape the plan to their own advantage.
The House Energy and Commerce Committee cleared the energy portion of the stimulus package by 34-17, putting it on course for a vote next week in the full House of Representatives. Duke Energy Corp. (DUK) emerged as a winner in its bid for a new electricity-pricing system. Billionaire investor Warren Buffett, who just months ago was advising Democrats on a financial bailout, went unheard as lawmakers speeded through a vote.
Power companies were just one of the groups that racked up wins and losses. The nuclear-power industry tried to qualify for loan-guarantees earmarked for renewable energy projects, but failed with the defeat of an amendment from Rep. Fred Upton, R-Mich. Ethanol makers carved $500 million out of a proposed $8 billion loan-guarantee program to develop a cleaner biofuel under an amendment from Rep. Tammy Baldwin, D-Wis.
The biggest winner was Duke, the power company that has been leading the charge for decoupling, which breaks the link between energy usage and utility profits. Under the plan, utilities are guaranteed enough revenue to make a profit, no matter how much electricity customers use. If demand comes up short, customers would pay a higher rate to cover the shortfall. In a conventional rate scheme, the utility takes a loss when demand falls short.
"The last thing in the world I would think we want to do is do all these great energy-efficiency ideas and actually get people consuming less electricity and then not have their costs go down," said Rep. Joe Barton, R-Texas, who failed to kill a measure that would give extra grant money to states that seek to implement a decoupling program.
Rep. Jay Inslee, D-Wash., said that the public ultimately benefits if utilities no longer have to worry about whether energy efficiency will cause a drop in profits. In California, where decoupling has already been implemented, " they avoided having to build six to 10 new coal-fired plants in California, with the attendant costs of those new plants," he said.
Congress turned a deaf ear to utilities that worry that some $3.25 billion in government loans for the construction of new power lines in the Midwest and the West will shut out private investments. Edison International (EIX) and MidAmerican Energy Holdings Co., a unit of Buffett's Berkshire Hathaway Inc. ( BRKA BRKB), were among companies that had complained about the terms of funding for the Western Area Power Administration, or WAPA, whose power they fear would be significantly expanding.
The federal agency, which serves a 15-state area, has the power to seize private land - giving it a significant advantage over private companies that have to clear regulatory hurdles before they can site new power lines. Because it relies on federal appropriations, it has been strapped for money. The $3.25 billion in loans would ease its funding problems, freeing the agency up to speed ahead.
That angers private companies, who are getting no sympathy from Democrats, least of all House Speaker Nancy Pelosi, D-Calif. On Thursday, she appeared to bat down requests to ensure that private companies would have a role in transmission construction.
"The suggested change would allow private groups to indefinitely delay construction of transmission lines by WAPA by simply stating their intention to finance new construction, without providing a clear timeline," said a spokesman for Pelosi, Nadeam Elshami. "This would be detrimental to an economic boost intended by this provision, and would hinder the development of renewable energy resources."
By Siobhan Hughes, Dow Jones Newswires; 202-862-6654; Siobhan.Hughes@dowjones.com
(Brian Baskin contributed to this report.)
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment