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Compromise Energy Bill Passes Senate

April 30, 2002

Action Moves To House/Senate Conference Where Differences Must be Reconciled

The Senate on Thursday passed sweeping energy legislation that calls for increased domestic production, less electricity regulation and greater use of renewable energy.

Senators overwhelmingly favored the bill, 88-11, though it differs dramatically from the version passed by the House of Representatives last summer. The House legislation, which emphasizes greater production including controversial drilling in the Alaska Arctic National Wildlife Refuge, must now be reconciled with the Senate version. Because the differences are so great, some observers doubt enough common ground on the two bills exists to craft a final version for President Bush to sign.

Although the Senate rejected oil exploration, construction of a natural gas pipeline from Alaska was included in the Senate bill, which should provide work for IBEW members. That provision of the legislation provides incentives to companies to build a pipeline to transport natural gas from Alaska to the lower 48 states along the route of an existing oil pipeline and paralleling the Alaskan highway. Because it would follow an established route, environmentalists do not oppose the plan.

The IBEW made strong efforts to include worker protections in the electric utility title of the legislation. An IBEW-backed amendment on the subject never made it to the floor because of procedural hurdles and time pressures. Those protections sought by the IBEW included provisions for pensions, health benefits and seniority in the event of utility mergers.

"Were disappointed but if we accomplished anything, it was to get workers discussed," said IBEW Political and Legislative Department Director Rick Diegel. "Too often workers are only considered a commodity. At least we have started a dialogue."

The Public Utility Holding Company Act of 1935 was repealed under the Senate version of the bill, which amounts to another move to deregulate the utility industry. The IBEW opposed the repeal of PUHCA because it removes consumer protections and vital state oversight put into place to prevent utility monopolies.

The Senate version of the bill includes $15 billion in tax incentives for such energy-saving measures as installing energy-efficient windows and using "clean coal" and fuel made of animal waste. The House bill provides $33.5 billion in tax incentives to encourage fossil fuel production. Such different approachesone addressing supply and the other focusing on demandwill make for formidable hurdles in the conference negotiations.

Use of renewable energy is a requirement of the Senate legislation; utility companies must increase the percentage of electricity generated by wind, solar and other forms of renewable energy. Corn-based fuel additives to replace MTBE are also included in the Senate measure, as are new efficiency standards for home appliances.

The final Senate bill does not include provisions to lower the passenger vehicle fuel efficiency standards. That portion was rejected last month following opposition by auto companies and some unions.