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Upton Sees `Room for Common Agreement' On State of the Union Energy Policy Goals

Thursday, February 14, 2013

The chairman of the House Energy and Commerce Committee said Feb. 13 there may be “room for common agreement” for congressional action on measures that would increase energy efficiency and advance other clean energy goals outlined in the president's State of the Union speech.

In an interview, Rep. Fred Upton (R-Mich.) said he and other lawmakers plan on “taking a careful look” at some of the energy proposals outlined by the White House Feb. 12, which, in addition to initiatives related to energy efficiency, included a call to increase renewable energy production and new funding for alternative vehicle research.

“I think there is some room where we can come to some agreements,” Upton told BNA. “Who wouldn't like to [lower] their home energy costs by 50 percent? We'll look at energy efficiencies and I'm sure a number of different things.”

Upton's remarks could signal the beginning of a change within the committee, which spent much of the 112th Congress advancing bills to block Obama administration environmental initiatives and to increase oil and gas development that never were considered by the Democratic-controlled Senate.

Informal Bicameral Energy Meetings

Upton's comments also follow a series of ongoing, informal meetings with Sens. Ron Wyden (D-Ore.) and Lisa Murkowski (R-Alaska), the chairman and ranking member of the Senate Energy and Natural Resources Committee, aimed at finding common ground on at least modest energy proposals.

Among the new proposals released by the White House in conjunction with the State of the Union address was establishment of a $2 billion Energy Security Trust fund, which would be paid for by using federal revenue collected from oil and gas production on federal lands and offshore sites.

Other proposals included as part of an overall goal of doubling renewable energy generation by 2020 were making the renewable energy production tax credit permanent and a call to cut in half “energy wasted by our homes and businesses,” as well as new funding for states to increase energy efficiency measures.

While the White House released few other details about the initiatives Feb. 13, analysts said they would surely require congressional action to proceed.

Whitfield Cites Agreement on Efficiency

In addition to Upton, Rep. Ed Whitfield (R-Ky.), a member of the House Energy and Commerce Committee, also said there may be room for compromise on advancing some of the Obama administration's energy priorities, especially those promoting energy efficiency.

“Energy efficiency--I totally think we have a lot of areas there that we can agree on, and everyone supports energy efficiency,” Whitfield, who chairs the committee's Subcommittee on Energy and Power, said in an interview. “There are some good programs at the Department of Energy that are not being fully utilized and even within the federal government, so I think there is a lot we can do on energy efficiency.”

However, compromise on broader energy legislation would likely be contingent on relaxing Environmental Protection Agency regulations, Whitfield said. Obama pressed Congress on climate change during his address, vowing to move forward on multiple fronts through executive branch actions if it does not take action.

“If he is willing to agree with us to back off some of his aggressive actions at EPA, then I think there is a lot of opportunity for us to talk,” Whitfield said.

Murkowski 'May Agree’ With Fund

Other Republican lawmakers said they may support some of the president's proposals as well.

In a statement, Murkowski, the top Republican on the Senate Energy and Natural Resources Committee, said she “may agree with” the president's call for an Energy Security Trust fund, which the White House said would support research into advanced vehicles that run on electricity, biofuels, and natural gas.

That proposal is similar to an “Advanced Energy Trust Fund” outlined by Murkowski in a policy blueprint that would fund research in renewable energy, energy efficiency, and alternative fuel vehicles and would be paid for using funds from expanded domestic oil and gas development.

“I intend to get to work on this as soon as possible,” Murkowski said.

Efficiency Proposal Faces Best Prospects

Of the three specific clean energy initiatives laid out by Obama, congressional observers said the efficiency proposal has the best chance of gaining traction in Congress.

As outlined by a White House fact sheet released in tandem with Obama's speech, the administration is proposing a “Race to the Top” program to encourage state energy efficiency efforts.

The proposal, which is based on a separate Race to the Top initiative that has led to significant education reform, was among the policy recommendations recently released by a coalition of energy efficiency advocates to double energy productivity by 2030.

As described in the Alliance Commission on National Energy Efficiency Policy, states would receive technical assistance and funding for policy and regulatory reforms related to building energy codes, energy efficiency programs and financing, utility reform, and transportation planning.

Efficiency Incentives for Manufacturers Possible

“Energy efficiency is one of the very few areas of broad uncontested consensus,” Kevin Book, managing director of research for the consulting firm ClearView Energy Partners, said in an interview. “Everybody in every sector of America would love to be able to be more efficient with energy.”

According to Book, passage of legislation that would expand and upgrade efficiency incentives for the manufacturing sector is possible in the 113th Congress.

In addition to calling for halving “the energy wasted by our homes and businesses over the next 20 years,” the administration is seeking to double American energy productivity by 2030.

While Sens. Jeanne Shaheen (D-N.H.) and Rob Portman (R-Ohio) are expected to reintroduce a version of legislation (S. 1000) that included funding for energy efficiency financing programs, national building codes, and other energy conservation measures, a stronger bill likely would be needed to meet the energy conservation goal laid out by Obama in the State of the Union address, Floyd DesChamps, a senior vice president at the nonprofit Alliance to Save Energy, said in an interview.

Renewable Energy Tax Credit Difficult

An Obama administration call to make the production tax credit for wind and other renewable energy sources permanent is likely to be “the biggest lift of all” and the “hardest one to get through Congress,” Margot Anderson, executive director of the Energy Project for the think tank Bipartisan Policy Center, said in an interview.

In addition to a tax credit of 2.2 cents per kilowatt hour for wind, the incentive also provides a credit of between 1.1 cents and 2.2 cents per kilowatt hour for other energy sources, including hydropower, marine and hydrokinetic power, biomass, geothermal, solar, and municipal solid waste.

As outlined in the White House fact sheet, Obama wants Congress to make the credit permanent and refundable as part of comprehensive corporate tax reform as a means of “providing incentives and certainty for investments in new clean energy.”

While Congress passed legislation (H.R. 8) in January 2012 to extend the credit for wind beyond its December 2012 expiration date, analysts said that credit and other renewable energy tax incentives are at risk for elimination in comprehensive tax reform that could begin this year (43 ER 3191, 12/14/12).

'Everything on Table,’ Baucus Says

When asked about the prospects of making the production tax credit permanent, Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, told reporters Feb. 13, “Everything is on the table.”

“There are a lot of ways to skin the cat, and there are a lot of ways to encourage energy productions, a lot of ways. Some are in current law, and some aren't.”

Whitfield also said he would be willing to consider making the tax credit permanent.

“I'm willing to talk about that, and I think a lot of people would support that, but we need some tax credits related to coal research and in order to meet all these environmental regulations, too,” Whitfield told BNA.

By Ari Natter


The fact sheet on the State of the Union address is available at http://www.whitehouse.gov/sites/default/files/uploads/sotu_2013_blueprint_embargo.pdf.