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Senate Passes Alternative Energy Investment, Biodiesel Mandate Bills

Somerset, PA

In the final hours of the 2007 session, the Senate overwhelmingly passed a $650 million initiative to promote the development of alternative sources of energy and add funding for low-income heating assistance and energy conservation programs.

Senators also passed two bills expanding the state’s Alternative Fuels Incentive Grant Program and creating a mandate for biodiesel, after adding a per-gallon production incentive program.

“The challenge was to establish a framework that allows Pennsylvania be aggressive in the development and use of alternative energy, while being responsible with taxpayer dollars. This measure achieves that,” said Sen. Mary Jo White (R-Venango), Chair of the Senate Environmental Resources and Energy Committee. “This is an historic investment in alternative energy in Pennsylvania that will boost use of alternative and renewable energy, and eventually reduce traditional energy consumption.”

Online audio comments by Sen. White.

Gov. Rendell said the Senate initiative, passed by an overwhelming bipartisan vote of 44 to 5, was “at best, modest progress.”

“The action in the Senate this week was helpful in that it was action,” Gov. Rendell said. “The bill approved by the Senate creates an investment fund of $250 million. Not only is this far short of the $850 million I proposed, it would make Pennsylvania’s clean energy fund smaller than the $300 million fund created by Rhode Island, a State with nine percent of our population.”

The Governor also said he would veto any renewable fuels proposal that did not include an ethanol mandate.

Special Session Senate Bill 1, the Alternative Energy Investment Act includes:

· $250 million to provide:

o Loans to businesses and loans or grants to counties, municipalities and school districts for clean energy projects, as well as loans and grants to businesses that support alternative energy production through the Commonwealth Financing Authority. ($210 million)

o Pollution control technology grants for small coal-fired power plants to comply with new state and federal regulations. ($25 million)

o Support for research and development of alternative energy technologies, and venture capital for Pennsylvania start-up businesses to develop or expand alternative and renewable energy technologies through the Ben Franklin Technology Development Authority. ($15 million)

· $130 million for tax credits to increase alternative energy production;

· $100 million for consumer grants, loans, rebates and reimbursements of up to 25 percent of the purchase and installation price for energy conservation projects;

· $100 million to boost funding of the Low-Income Home Energy Assistance Program (LIHEAP);

· $50 million to provide loans, grants and rebates of up to 35 percent of the purchase and installation costs of solar and solar photovoltaic panels;

· $15 million for rebates for the purchase of hybrid vehicles; and

· $5 million in loans for energy efficiency projects in low-income households.

The programs would be funded by earmarking revenue from the Utilities Gross Receipts Tax.

Special Session Senate Bill 22 (Tomlinson-R-Bucks) would make changes to the state’s Alternative Fuels Incentive Fund, which is aimed at reducing air pollution and reducing the state’s dependency on foreign oil. It would increase the reimbursement to producers of alternative fuels from 5 cents to 10 cents per gallon up to 12.5 million gallons annually.

The bill also includes a specific biodiesel production incentive of 75 cents per gallon, up to $7 million annually.

The legislation establishes a three-year matching grant program-- up to 50 percent of costs and a $5,000 maximum-- to install nitrogen tire inflation systems.

The bill would also reduce the amount of money in the fund that can be used for administrative expenses from 2 percent to 1 percent and expand the fund’s rebate program to authorize rebates for consumers who purchase biodiesel or other alternative fuels vehicles.

The Senate passed the bill 40-9.

Special Session Senate Bill 36 (MJ.White-R-Venango) Biodiesel Study and Production Incentive Act, which will trigger mandates for the use of biodiesel based on biodiesel fuel production capacity for production sold to distributors in Pennsylvania

The Senate passed the bill 42-7.

The Senate Environmental Resources and Energy, Special Session Energy Policies and Consumer Protection and Professional Licensure Committees held six hearings on different aspects of the Governor’s Energy Independence Proposal during 2007.

In June, the House passed and sent to the Senate House Bill 1200 (DePasquale-D-York) establishing an $850 million alternative fuels investment grant and loan program under the PA Energy Development Authority as proposed by Gov. Rendell, but without a funding source. House Bill 1201 (George-D-Clearfield) that would provide funding for the program through a special fee on the bills of electric customers has been in the House Rules Committee since September 26..

The House also passed House Bill 1202 (Gerber-D-Montgomery) in June requiring transportation fuels to have renewable content as proposed by the Governor.

The House Environmental Resources and Energy and Consumer Affairs Committees held one hearing and two informational meetings on the Governor’s proposals during 2007.

NewsClip: Senate Approves $650 Million Alternative Energy Bill

Biofuel Gets Boost in 75-Cent Subsidy

Senate Sends Energy Plan to House

Senate’s Compromise Provides Incentives for Cleaner Energy

Rendell Not Satisfied With Senate Energy Bill

Rendell Says Energy Bill Falls Short

Will Senate Energy Bill Make It With Rendell?

On the Hill

· Session Schedule

· Senate/House Bills Moving

· On the Governor’s Desk

· House Environmental Committee Approves Great Lakes Compact Bill