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Energy Bill Update: Will Renewables Be a Part of the Political Landscape?

After much concern about whether or not key provisions for renewable energy will be a part of this year's energy bill, it appears that tax incentives and a renewable portfolio standard (RPS) are still options on the table, according to industry sources in contact with staffers working on the legislation.

Last week, industry trade groups in Washington reported that Senate Majority Leader Harry Reid and Speaker of the House Nancy Pelosi publicly stated that they would separate the tax incentives and RPS from the energy bill in order to pass it before the Thanksgiving recess.

Now, because of increased pressure from industry associations, their members and other concerned citizens, Congressional leaders say they are still looking at all possible options for the energy bill and that a decision on final language probably won't come until next month.

“I think we're looking at a December timeline for anything, says Karl Gawell, Executive Director of the Geothermal Energy Association (GEA). “The question is, 'what's going to be in it?'”

There is much speculation about what renewable energy provisions – if any – will go back into the bill. The White House has said that it supports a scaled-down RPS and lowered fuel efficiency requirements, but it won't support tax incentives for renewable energy that are funded by taking incentives away from the fossil fuel industries. Since gaining control of Congress, Democrats have pledged to follow a “pay as you go” approach to legislation – meaning to fund new programs, the expense must be offset from somewhere else.

Both Reid and Pelosi have expressed strong support for renewable energy in the past; however, says Gawell, the issue is not whether Democrats support renewables, “it's whether or not they have the votes to override a Presidential veto.” GEA, the Solar Energy Industries Association (SEIA), the American Wind Energy Association (AWEA) and other trade groups have been communicating with the offices of Reid and Pelosi about the issue all week.

Scott Sklar, President of the Stella Group Ltd., a renewable energy marketing and policy analysis firm disagrees with the concerns over a veto. He has been closely watching the political drama unfold in D.C., and he says that the Democrats shouldn't be pressured to strip the bill so bare.

“Many of us believe the Democratic leadership is falling into a game of chicken here. We do have a lot of Republican support for our provisions, so we don't believe they ought to be caving in,” he says. “Playing this kind of game by taking the investment and production credits out of the bill throws us in the position where you may have an energy bill that doesn't really have incentives for renewable energy and high value energy efficiency – and that would be tragic.”

It is still unclear how the bill will be modified. Both Reid and Pelosi's office declined to comment on the status of the renewable energy provisions, but trade group representatives say they are making some progress in getting the tax incentives and RPS back in the bill for December.

For more information on the energy bill, see the earlier story.

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