The House this week passed $850 million renewable energy bill matching action taken by the Senate in December which adopted a similar $650 million renewable energy bill. Now the trick will be to reconcile the differences between the proposals.

The bills are Special Session House Bill 1 (DePasquale-D-York) and Special Session Senate Bill 1 (MJ.White-R-Venango).

Most of the substantive disagreement in the House debate came over whether to add to the state’s debt by floating an $850 million bond issue when the Commonwealth, House Republicans pointed out, was looking at a $427 million budget surplus this year or could just run the program on a pay-as-you-go initiative with $60 million annually from the Utility Gross Receipts Tax.

"With double-digit rate increases for electricity service pending for millions of Pennsylvanians and gasoline prices expected to reach $4 a gallon, we need to move toward energy independence now," Gov. Rendell said. "Energy is one of the most promising sectors of the economy, and investing in new technology and innovative ideas makes perfect sense because it will attract $3.5 billion in new private capital that will create thousands of good jobs.

"We have the opportunity now to keep Pennsylvania competitive with other states and nations as we vie for new business development projects that will create jobs for our people, keep our economy strong, diversify our energy supply, and protect our environment," the Governor said.

“We cannot and should not stand idly by and depend on the philanthropy of Middle Eastern sheiks when it comes to guaranteeing affordable energy for our homes, small businesses and industrial facilities,” House Majority Leader Rep. Bill DeWeese (D-Greene) said. “These measures address our problems at the source – investing in Pennsylvania innovation and power generation while giving the men and women paying the bills the clout over how those bills are calculated.”

“Pennsylvanians send $30 billion overseas to buy energy every year – nearly $60,000 every minute of every day – and enough is enough,” House Majority Whip Rep. Keith McCall (D-Carbon) said. “We need to attack this problem from two sides, and this measure does that – saving us $10 billion over the next 10 years.

“We’re using more alternative energy sources based in the state like solar power, wind energy and hydroelectric, but we’re also investing in the fastest-growing industry in America by investing in research into other forms of energy. Companies doing cutting-edge research can and should be here in Pennsylvania helping to generate power and generate good-paying jobs.”

House Energy Proposal

Special Session House Bill 1 authorizes a $850 million bond funding that would be divided in two ways, first, $600 million of the total bond would be allocated to the Pennsylvania Energy Development Authority and $250 million of the total bond would be allocated to the Commonwealth Financing Authority.

The funds allocated to the Pennsylvania Energy Development Authority would be used to support the following types of projects:

· Up to $56 million for energy related research and development;

· Up to $44 million would be used to create a rebate program for homeowners purchasing energy efficient refrigerators or room air-conditioners;

· Up to $200 million for a rebate and grant program for solar photovoltaic and other solar energy technologies;

· Up to $270 million to provide grants and loans for the deployment of alternative energy, alternative fuels, and energy efficiency projects. A total of at least $30 million is to be set aside specifically to provide grants and loans to support wind energy projects;

· A total of $5 million is to be used to provide a loan program for homeowners to purchase energy efficient appliances or energy conservation measures;

· A total of $25 million is to be used for pollution reduction technology projects at smaller electric generating plants; and

· A total of $25 million for a grant program to support the construction of high-performance or “Green” buildings.

The funds allocated to the Commonwealth Financing Authority would be used to support the following types of projects:

· Up to $50 million for loans to venture capital partnerships;

· Up to $50 million for grants and loans to provide working capital, equipment purchases, and construction and site preparation activities; and

· Up to $150 million for grants and loans for developing business sites to attract advanced energy.

The House has also passed House Bill 1200 (DePasquale-D-York) creating a grant and loan program to encourage the use of renewable energy at the PA Energy Development Authority (but without a funding source), House Bill 1202 (Gerber-D-Montgomery) that includes a renewable transportation fuels mandate and House Bill 2200 (George-D-Clearfield) requiring electric utilities to reduce electric usage by 2.5 percent.

Senate Energy Proposal

Special Session Senate Bill 1 creates a $650 million program that would:

· $250 million to provide: 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); Pollution control technology grants for small coal-fired power plants to comply with new state and federal regulations. ($25 million); 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;

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

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

The Senate has also passed Special Session Senate Bill 22 (Tomlinson-R-Bucks) that includes an incentive program for the use of biofuels in transportation and Special Session Senate Bill 36 (MJ.White) that includes a biodiesel mandate.

The portion of the energy package related to transitioning from electric rate caps to a competitive electric market has seen a number of hearings, but no action was taken by the full Senate or House. The bills include House Bill 1201 (George-D-Clearfield) and Senate Bill 1134 (Tomlinson-R-Bucks)

Other energy-related legislation is also likely to be considered that is not part of the primary Energy Independence Package.

For example, Special Session House Bill 5 (M.Smith-D-Montgomery) establishing High-Performance Green Building Tax Credit Program, House Bill 894 (Leach-D-Montgomery) increasing state reimbursements for school buildings built using green technology, Special Session House Bill 8 (Leach-D-Montgomery) providing an exclusion from Sales Tax for fluorescent bulbs, Special Session House Bill 11 (Parker-D-Philadelphia) providing an exclusion from Sales Tax for Energy Star appliances and House Bill 690 (Cohen-D-Philadelphia) creating a plug-in hybrid vehicle task force were all passed the House and are now in the Senate and House Bill 656 (Bastian-R-Somerset) allowing preserved farms to lease property for the development of wind farms is still in the House.

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3/14/2008