WASHINGTON – House taxwriters advanced an $8 billion package of energy tax breaks Wednesday, including measures aimed at spurring construction of electricity transmission lines (search) in hopes of reducing the likelihood of future blackouts.
The tax provisions, many of which would help energy companies, will be merged with non-tax energy proposals being crafted by two other committees into a broad bill expected to be considered by the full House next week.
The tax incentives approved 26-11 by the Ways and Means Committee dwarf proposals agreed to in energy legislation two years age over a gasoline additive, MTBE (search), and because some Senate Republicans objected to the legislation's huge cost.
This time, budget constraints produced a much slimmer tax package, though it still exceeds the $6.7 billion ceiling recommended by the Bush administration. The cost is over 10 years.
Rep. Bill Thomas, R-Calif., the committee's chairman, said he expects programs to be added in eventual negotiations with the Senate. The final array of tax provisions "will look somewhat different," he said."
Meanwhile, the House Energy and Commerce Committee was plowing through dozens of amendments as it considered a large part of the non-tax section, including expansion of the use of ethanol in gasoline and a provision to protect against lawsuits for manufacturers of another gas additive, MTBE, against liability lawsuits because of drinking water contamination.
A third committee was expected later Wednesday to advance legislation that would open the Arctic National Wildlife Refuge (search) in Alaska to oil drilling as part of a string of proposals involving energy development on public land. It, too, will be merged into the broader measure.
The Senate has yet to take up its energy package.
The House tax provisions were heavily tilted to helping established energy industries.
Just $488 million of the tax breaks were aimed at energy efficiency or renewable energy sources. Most of that, $391 million, would go to reduce homeowners' costs for making energy-saving improvements. The legislation would provide a 20 percent tax credit, up to $2,000, for installing more efficient windows, insulation and other energy savings devices.
Among the provisions would be more favorable tax treatment, worth $1.5 billion over 10 years, for construction of electricity transmission lines and an additional $1.6 billion to spur construction of natural gas pipelines.
Rep. Jim McDermott, D-Wash., called the tax provisions "obscene" because they focused on energy industries including oil and gas companies that are making big profits because of high energy costs.
"What do the American people get -- nothing but a raw deal, an obscene deal," said McDermott. At a time of soaring gasoline prices, "there is no provision ... that will lower the price of gasoline, only protect the profits of the oil industry."
Rep. Jim Nussle, R-Iowa, bemoaned the absence of tax breaks for renewable energy -- such as credits for wind-derived energy (search). "We need to make this a priority," he said.
Thomas said the wind energy credit, which expires at the end of this year, is expected to be extended as part of other legislation.
Meanwhile, Rep. Lloyd Doggett, D-Texas, tried to strip from the bill a tax credit for coal, which currently gets a break as a synthetic fuel because it is chemically altered. Doggett maintained that many of those programs are a sham because the fuel is no more efficient or less polluting than conventional coal.
His amendment failed 24-12.