Interest groups are seeking a share of $850 million, much of which will go to subsidies for "clean-energy" projects

Oct 9 - McClatchy-Tribune Regional News - Angela Couloumbis The Philadelphia Inquirer

For months, lobbyists for everyone from small-town Pennsylvania farmers to multibillion-dollar oil companies have swarmed the Capitol, jockeying for the best seat at the table to exert influence on Gov. Rendell's alternative energy legislation.

Some are spending hundreds of thousands of dollars on lobbying to make sure they are heard.

It is a stark reminder that the fight over the future of alternative energy is not just a legislative brawl between Republicans and Democrats.

Consider the stakes: $850 million, more than half of which will be spent on potential grants, loans, and other subsidies for alternative, renewable, and other "clean energy" projects. Those who follow the issue say it is the kind of investment that could reshape a portion of the state's economy -- Pennsylvania's "energy economy," as Rendell calls it.

"What you have is a very large, very complicated group of special interests, kind of like a cottage business, where everyone is working a piece here, a piece there," said Rosemary McAvoy, CEO and founder of the advocacy group Alternative Fuel Renewable Energies Council.

Although few are outright opposed to alternative energy programs, there are distinct battle lines being drawn when it comes to determining how to reduce the state's electric use and dependence on oil.

Farmers have generally been supportive of Rendell's plan, which includes money for expanding ethanol and biodiesel production in the state.

Ethanol requires corn, and biodiesel requires soybeans. Both are crops that Pennsylvania farmers already grow and which would be in higher demand.

"There would be a bigger market for those products, and that's good for our farmers," said Mark O'Neill, spokesman for the Pennsylvania Farm Bureau, which represents farmers and rural families in the state and which has spent roughly $26,000 between January and June on Harrisburg lobbying.

What's good for the farmer, though, may not be good for the food merchants.

The merchants believe the inevitable outcome of increased ethanol production will be a sharp spike in the price of corn. That could make it more costly to feed farm animals, which in turn could lead to higher food prices for meat and dairy.

Also raising a red flag: the state chapter of the American Petroleum Institute, which represents the major oil companies, including ExxonMobil, Conoco and Shell.

Their concern: the portion of the governor's plan requiring every gallon of gasoline sold in the state by 2017 to include 10 percent ethanol and every gallon of diesel fuel to include an increasing amount, up to 20 percent, of soy or other renewable oil.

Rolf Hanson of the state chapter of the Petroleum Institute said there already was a federal program aimed at increasing the use of biofuels, such as ethanol and biodiesel. That program, unlike the governor's proposal, gives refiners and distributors flexibility in meeting those requirements, he said.

Hanson also said that because ethanol cannot be transported by pipeline and needs to be brought in by truck or rail, Rendell's plan could mean major infrastructure projects at pipeline terminals, where ethanol would be mixed with gasoline.

That would increase the cost of business, he said, which could translate to spikes at the pump.

"This is a huge issue," Hanson said. "It would be the largest fuel adjustment in the history of the state. It's not something that can be taken lightly or decided quickly."

The institute spent just over $205,000 in the first six months of this year on lobbying in Harrisburg and other related expenses, according to state records. Those records do not specify what portion of that was spent lobbying to influence Rendell's plan.

Pennsylvania's utilities are concerned about the piece in the governor's proposal dealing with so-called smart meters, devices that would allow consumers to tailor their electricity use to times when it is cheapest.

The governor's plan would require every household to have such meters, a proposition that would cost utilities $1 billion, according to J. Michael Love, president of the Energy Association of Pennsylvania.

The association, which represents electric and natural gas energy-distribution companies, spent just over $290,000 in the first six months of the year on lobbying and other related expenses, according to its lobbyist-disclosure filing. Again, the records do not break down how much was spent specifically on alternative energy issues, but Love said the association was working on at least a half-dozen other issues this year.

The utilities do not oppose smart meters -- some already offer them to customers, Love said. The industry is concerned that such meters will make a difference only if people change their energy-consumption habits.

"We agree with the governor that you have to give customers more of a choice when it comes to how they use energy," Love said. "The challenge is: Can we convince enough people to alter their habits in order to make it work?"

Despite the skepticism and resistance, many within the renewable-energy industry, as well as the environmental arena, are pushing hard for state government investment in alternative energy. Most support Rendell's plan.

They represent perhaps a diverse group: potential ethanol and biodiesel plant operators, solar panel distributors, developers and venture capitalists, and myriad clean-energy and clean-environment advocates.

Some have money to spend on lobbying, some don't.

And despite their varying interests, their message has been consistent: develop an alternative energy plan to provide an alternative to foreign oil.

McAvoy, of the advocacy group Alternative Fuel Renewable Energies Council, said that because of widespread public support for alternative energy sources, who wins and who loses in the lobbyist battle will not simply be determined by who has the most money to spend.

"A lot of citizens have come forward on this issue," she said. "I don't think it will come down to who is in who's pocket."

Contact staff writer Angela Couloumbis at 717-787-5934 or acouloumbis@phillynews.com.
To subscribe or visit go to:  http://www.phillynews.com