The Democratic proposal to force publicly traded power companies to get 15 percent of their supplies from wind, solar and other renewable sources by 2020 is likely to have only a narrow margin if it succeeds, said Representative Diana DeGette, the plan's sponsor. The House may vote on it as soon as today.
A similar measure that failed in the Senate in June included municipal utilities, rural cooperatives and government power agencies that are excluded from the new bill. The change in the so-called renewable portfolio standard divides two groups that had collaborated to defeat it, forcing investor-owned utilities to step up the fight.
``The difficulty here is that everybody wants to be green and wants to be an environmentalist,'' said David Ratcliffe, chief executive officer of Atlanta-based Southern Co., which sells energy from Mississippi to Florida. A federal mandate is the wrong way to promote alternative energy and will penalize his customers, he said.
The publicly traded companies have lost former allies such as the Tennessee Valley Authority, a federal agency that serves 8.7 million customers. The White House today threatened a veto of the House energy legislation, which would also take $16 billion in tax breaks from oil and gas producers and strengthen energy efficiency rules.
``It's totally ludicrous to exempt 25 percent of the industry from any kind of a mandate like this,'' said Tom Kuhn, president of the Edison Electric Institute, which represents the largest U.S. utilities, including Southern and American Electric. The lobbying to defeat the measure is ``an all-out blitz,'' Kuhn said in an interview yesterday.
A federal mandate would be a boon to alternative energy companies such as solar panel maker SunPower Corp. and Iberdrola SA's PPM Energy, which develops wind farms. Venture capitalists, with more than $1 billion invested in makers of solar panels and windmills, favor the measure.
Twenty-four states and the District of Columbia already have requirements in place for renewable power purchases. Many of the state laws also exempt municipal utilities, coops and government power agencies.
The Democrats' decision to exempt the so-called public power suppliers ``reflects a respect for local control,'' said Madalyn Cafruny, a spokeswoman for the American Public Power Association, their lobbying organization in Washington.
The Senate failed to hold a final vote on its version of a renewable portfolio standard before approving energy legislation earlier this year. Any House energy bill would have to be reconciled with Senate legislation and approved by President George W. Bush before becoming law. In a last-ditch effort to gain votes, Democrats have agreed to let utilities meet a portion of the 15 percent portfolio rule with energy efficiency. Up to 4 percent could come from efficiency, DeGette's spokesman Kristofer Eisenla said today.
``I think we are close on the votes,'' DeGette, a Colorado Democrat, said in an interview yesterday. It's not an issue that the House has considered seriously before, so a lot of education has been needed to build support, she said.
Before this year, the Senate approved a renewable portfolio standard three times while the House rejected the idea.
The White House Office of Management and Budget said in a statement today that the House bills would harm the effort to boost domestic supplies and should be vetoed. It would also hurt the economy and provide no help in addressing climate change, according to the statement, which didn't specifically mention the portfolio standard amendment.
Bush in June threatened to veto the Senate energy bill if it included a national renewable standard. Energy Secretary Samuel Bodman has opposed any federal mandate for renewable power.
The National Venture Capital Association, whose members back alternative energy startup companies, sent an Aug. 1 letter to lawmakers urging approval of the standard.
``A signal of long-term congressional support for the renewable energy space is tremendously encouraging,'' wrote Mark Heesen, president of the association. Venture capital firms invested more than $1.2 billion in green technology companies last year, three times more than 2005, he wrote.
``We're dealing with an emerging market that needs some federal support,'' said Michael Carboy, an analyst at Signal Hill Capital Group in San Francisco, referring to solar panel makers. ``The stocks will take off on any positive news from Washington.''
Southern's customers would end up spending an extra $13 billion for their power under a renewable resources mandate, according to an analysis from the company that runs through 2030. Georgia, Alabama and other states where Southern operates are disadvantaged because they don't have breezy locations for windmills, according to the company.
Pelosi is pressing hard to get the standard approved, Southern's Ratcliffe said in a telephone interview yesterday. ``There's a great deal of arm-twisting.''
by Daniel Whitten and Tina Seeley