Consumer-friendly ideas in energy bill uncertain

WASHINGTON -- The White House promoted it and there was widespread support in Congress, so a tax credit for buyers of gasoline-saving hybrid cars seemed certain to find a way into the energy bill.

But lawmakers have not decided whether to include the tax break in legislation even though it is one of the few offerings that would directly affect consumers and fuel consumption.

Many Democrats and other critics of the energy policy blueprint developed largely by Republicans say the struggle over the hybrid car tax credit reflects the bill's tilt toward production at the expense of efforts to cut energy use.

When it comes to energy efficiency "it's a bologna sandwich ... while lobbyists are feasting on steak," complains Mark Hopkins, head of the Alliance to Save Energy, a private advocacy group that promotes energy conservation.

More than two years ago, Vice President Dick Cheney's energy task force recommended a tax credit for buying vehicles powered by electricity and gasoline. The hybrids can get up to 75 percent better mileage per gallon, but also cost more than conventional vehicles. All the major automakers have plans to introduce hybrids over the next few years.

Last year and again in the summer, the Senate approved a measure that would save consumers an average of $2,000, through a tax credit, for people buying a hybrid vehicle such as the Toyota Prius or Honda Civic, which already are on the market. But the House in its energy bill ignored the credit.

One auto industry lobbyist said he expects some form of tax breaks for hybrids, though probably scaled back considerably from the Senate measure.

An aide Republican Sen. Charles Grassley of Iowa, chairman of the Senate Finance Committee and a leading negotiator on tax issues on the energy bill, said there is no agreement on what to do about the tax credits.

Steven Nadel, executive director of the American Council for an Energy Efficient Economy, said that even with the tax incentive to buy gas-electric vehicles, the bill now before Congress will represent only a modest effort to reduce domestic use of energy.

An analysis by Nadel's group and the Alliance to Save Energy found few items in the legislation that would help to reduce energy consumption and even fewer aimed directly at consumers. Among them are:

new minimum energy efficiency requirements for 11 products, including exit signs, traffic lights, refrigerators, ceiling fans and vending machines.

a tax credit for buying insulation, more energy efficient windows and appliances that meet federal Energy Star efficiency ratings.

tax credits to builders who construction new homes with a 30 percent to 50 percent improvement in energy savings over conventional homes.

Home buyers may save on the cost of the home and lower fuel bills.

tax deductions for use of efficient lighting, heating and cooling systems in commercial buildings.

The legislation also aims to get government, one of the largest users of energy, to give energy savings greater priority. But many of those measures already are being pursued -- through various degrees of success -- by executive order, energy efficiency advocates say.

Republican supporters of the legislation cite these programs as evidence they are trying to come up with an energy blueprint that addresses both production and conservation.

But many Democrats, environmentalists and energy conservation advocates argue that the efficiency measures are dwarfed by a broad range of tax breaks, policy initiatives and other incentives to spur production of coal, oil, natural gas and nuclear power. The bill is expected to include more than $16 billion in total tax breaks, the overwhelming majority aimed at production, they say.

Despite these efficiency programs, energy demand will grow, Nadel says. The legislation is expected to reduce average energy demand by only about 1.4 percent over what it otherwise would be over the next 16 years, he calculated. "We really need to do a lot more."

More significant is what lawmakers are not putting into the bill, argues Kara Rinaldi, legislative director of the Alliance to Save Energy.

There is nothing to significantly increase automobile fuel economy. She said lawmakers never seriously considered creation of a national fund, paid into by electric utilities, with the money used to promote electricity savings. A proposal approve by the Senate that would have set a requirement to curtail the growth in oil consumption by 1 million barrels a day by 2013, was scrapped. The country currently uses about 20 million barrels a day with demand growing.