Energy bill again fails to win support

June 1, 2004 By    

After failing to get the Senate to approve the comprehensive Energy Policy
Act, supporters introduced a smaller package in hopes it would allay fears of
reluctant senators about increasing the budget deficit. Their effort failed.

A bipartisan strategy of breaking the bill into components has made some progress,
however. Sponsors attached energy tax provisions to an overseas tax bill, the
Jumpstart our Business Strength (JOBS) Act, which the Senate passed.
The bill includes the tax credit for purchase of propane-powered vehicles, ranging
from $4,000 to $40,000 depending on vehicle size. Buyers would get the credit,
unless they are tax-exempt, in which case sellers could claim it. Retailers
who install clean fuel refueling equipment could also claim a credit of half
of their costs, up to $30,000. Those installing a propane-pumping station could
claim a credit of up to $1,000, while retail sales of alternative motor fuel
would get a credit of 50 cents per gallon equivalent in 2005 and 2006 only.

Builders of energy-efficient homes could claim credits of $1,000 to $2,000
per unit. Homeowners could get a credit of up to $150 for installing propane
water heaters as well as credits of 10 percent of the cost for improving energy

Manufacturers of washing machines could claim energy efficiency tax credits
between $50 and $100 per machine, up to $60 million per company.

The bill does not include funding for research and development, Low-Income
Home Energy Assistance Program, Energy Star or anything else included in earlier

Since no comparable JOBS bill exists in the House, its fate remains uncertain.
The House could pass a bill with completely different (or no) energy tax provisions.
Last year, the House energy bill contained quite different tax provisions than
the Senate version, so another battle over such provisions remains possible.

Meanwhile, Senators Olympia Snowe (R-ME) and Dianne Feinstein (D-CA) introduced
the Efficient Energy through Certified Technologies & Electricity Reliability
Act of 2004 with a variety of energy efficiency tax incentives, including tax
deductions of up to $2,000 for installing propane water heaters in homes if
they meet certain energy efficiency standards. The Finance Committee got the

Rep. Randy Cunningham (R-CA) introduced a companion measure in the House,
which was referred to the committees on Energy & Commerce, Ways & Means,
and Financial Services.

Briefly Speaking

  • Energy grants availableThe U.S. Department of Agriculture is giving $11.4 million in grants for
    rural small businesses and farmers who show financial need to make energy
    Allowable costs include buying equipment (excluding vehicles), energy audits,
    construction and improvement, permit fees, professional services, business
    plans and feasibility studies. The funds can not be used to research or
    to reimburse themselves for previous expenses.
    Grantees can get between $2,500 and $250,000 each but must pay at least
    75 percent of project costs. For details, contact your USDA State Rural
    Development Office by July 19.
  • Alt fuel vehicle growth predicted

    Alternative-fueled/advanced engine technology autos will comprise 19 percent
    of the U.S. market for light-duty market by 2025, the Energy Information
    Administration predicts. EIA’s International Energy Outlook 2004, which
    forecasts use of power around the world through 2025, forecasts sales of
    3.9 million alternative cars per year.

  • Correction
    The Bush administration asked for $200 million for the Low-Income Home Energy
    Assistance Program reserve fund for 2005. The April column gave the wrong


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