CLIMATE:

Dems take separate paths in writing renewable energy, cap-and-trade bills

Top House and Senate Democrats are headed in different directions on whether to combine a renewable energy standard with a much bigger global warming bill that establishes a cap-and-trade program setting first-ever limits on U.S. greenhouse gas emissions.

House Energy and Commerce Chairman Henry Waxman (D-Calif.) said yesterday he is leaning toward including both items together in one comprehensive energy and climate package that he will markup by Memorial Day. "I think they could go together," he said.

By contrast, Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) gathered testimony yesterday from electric utility industry officials supporting his case that Congress should move in the first half of the year on a bill setting a nationwide standard for renewables -- with cap and trade kept on a separate track with passage at a later date.

"I think that it is time that we finally pass this provision in both houses and get it to the president, for whom it is one of the highest priorities," Bingaman said of the renewable electricity standard (RES), also commonly referred to as a renewable portfolio standard (RPS).

President Obama supported both cap-and-trade and a renewable electricity standard during last year's campaign. As for sequencing, several sources say the new administration has sent strong signals to Congress that it wants the president to sign an RES into law this summer in order to score an early victory on one of its campaign issues.

"I believe the president is very supportive of an RPS," said Sen. Amy Klobuchar (D-Minn.). "I've actually been at meetings where he's said that."

A White House spokesman declined comment yesterday on the administration's preference on the order of energy and climate legislation.

Looking ahead, Obama officials from the Interior and Energy departments and Federal Energy Regulatory Commission will soon be called before Bingaman's committee for nomination hearings where the climate and energy issue is fair game for questions.

Democratic leaders on Capitol Hill support both the climate and energy proposals but have not been clear in defining their legislative strategies.

House Speaker Nancy Pelosi (D-Calif.) has committed to a floor vote this year on cap and trade. Through a spokesman, Pelosi hinted yesterday that she will also be open to keeping cap and trade separate from a renewable electricity standard. "The speaker strongly support legislation to create an RES, and she looks forward to working with the White House and the leadership in moving forward," Pelosi spokesman Drew Hammill said in an e-mail yesterday.

According to a Senate Democratic leadership aide, Majority Leader Harry Reid (D-Nev.) backs Bingaman's strategy of keeping cap-and-trade and a renewable electricity standard apart. "It's very unlikely that they will be combined in the Senate," the staffer said.

Differences between the House and Senate bills may be more a reflection of committee jurisdictions than anything else. While Bingaman has control over energy issues, cap-and-trade legislation is referred to the Senate Environment and Public Works Committee. Waxman's Energy and Commerce Committee has authority over both the energy and global warming legislative portfolios.

Asked yesterday about possible House-Senate conflicts in their energy and climate proposals, Waxman said differences would be sorted out in a conference committee.

Three views

Among the rank-and-file on Capitol Hill, there is a variety of opinions about how to proceed on the question of connecting cap and trade and a renewable energy standard.

Klobuchar wants to see them on different tracks. "I'd hope we'd have the votes to move an RPS through very quickly," she said. "And then we can move on to climate change legislation, which we all want to get done as soon as possible."

Rep. Rick Boucher (D-Va.), a senior member of the Energy and Commerce Committee, said he expects Obama will sign both measures into law. As for the process, Boucher insisted it is not as important.

"I'm agnostic as to whether these two measures are joined or whether they're handled separately," Boucher explained. "I think that's a procedural step that Chairman Waxman will needs to resolve as far as the House is concerned. Whichever way he decided to do it is fine with me. It's the substance that matters."

But Sen. Bob Corker (R-Tenn.) said it makes little sense to move an RES on its own when lawmakers soon plan to take up a much broader global warming bill. Corker argued that a renewable energy standard would raise energy costs for his constituents.

"We have an opportunity in a few months to debate cap and trade or a carbon tax, both of which would bring money back to the system," Corker said. "I can't imagine why this administration would choose on the front end to divide our country instead of focusing on what would unite our country and not pit one part of the country against the other."

Senate Energy and Natural Resources Committee ranking member Lisa Murkowksi (R-Alaska) also questioned whether the RES and cap and trade amounted to conflicting goals. "We need to ask ourselves what we are trying to achieve with this program," she said. "Is our aim simply to increase renewable energy production? Or is the goal to reduce greenhouse gas emissions?"

Murkowski said that if reducing carbon dioxide is the goal, nuclear and other non-carbon-emitting technologies should also be included. "We must consider whether the RPS is the right policy at this time or whether it has been overtaken by the need to address climate change standards," she said.

Electric utility industry officials have different perspectives on the issue too. Ralph Izzo, chairman of Public Service Electric Group, testified before Bingaman's committee yesterday that an RES and cap and trade are "inextricably related to each other."

But Izzo said he would support the idea that lawmakers work first on an RES because "a dialogue about carbon legislation is far more complicated."

Cap-and-trade legislation hit a high-water mark in the Senate with 43 votes in 2003, though a procedural vote last summer on global warming garnered 48 supporters. Senate sponsors hope to reach 60 this year with help from the Obama administration and a coalition of moderate Democrats and Republicans (E&E Daily, Feb. 10). There has never been a House floor vote on cap-and-trade legislation (E&E Daily, Feb. 9).

As for a national renewable energy standard, lawmakers have come close to sending a bill to the White House. During the last Congress, the House approved legislation setting a standard of 15 percent renewables by 2020, but it failed in the Senate amid GOP-led filibusters and a veto threat from then-President George W. Bush.

Democratic Senate and House committee leaders floated far different renewable proposals last week. Bingaman's draft would require retail power providers to obtain 16 percent of their supply from renewables by 2019 and 20 percent in 2021. It also allows 25 percent of the target to be met with utility demand reduction programs.

In the House, Energy and Environment Subcommittee Chairman Ed Markey (D-Mass.) introduced a renewables standard with a more ambitious target that mirrors Obama's campaign promise. Markey's bill would require renewables to reach 17.5 percent in 2020 and then 25 percent in 2025 through 2039, with no clause allowing the standards be met with efficiency measures (E&ENews PM, Feb. 4).

Reporter Katherine Ling contributed.