Washington (Platts)--3Oct2008

The US House of Representatives is slated to vote later Friday on whether
to enact a $700 billion financial crisis bill that includes a package of tax
credits with $17 billion for renewable and low-emissions energy projects.

The US Senate, in a bipartisan agreement, passed the emergency economic
bill, H.R. 1424, 74 to 25 Wednesday night after Senate Majority Leader Harry
Reid, a Nevada Democrat, added a popular package of tax incentives.

Existing tax credits for solar and wind energy will expire December 31 if
Congress does not act.

Political observers expect the vote in the House to be close.

"Passage of the bill remains stubbornly in doubt," Stanford Group Company
analyst Christine Tezak said Friday.

The House on Monday shot down--by a 13-vote margin--a similar bailout
bill negotiated by House Democratic leaders and the White House that did not
include the tax credits.

The Senate's addition of tax breaks for energy and businesses and a fix
on the alternative minimum tax appeared to raise ire among some fiscal
conservatives in the House.

"Senator Reid made a serious gamble," said Representative Mike Ross of
Arkansas, a co-chair of the fiscally conservative Blue Dog Democrats.

Representative David Drier of California told his colleagues on the House
floor Friday morning that the revised bailout bill is better than the original
bill. Passing the revised bill could prevent the markets from plummeting as
they did Monday after the House voted down the first measure, he said.

"We can accept this imperfect bill or do nothing," Drier said. "On Monday
we saw the consequences of doing nothing."

But other members from both parties raised arguments against the bill and
suggested taking more time to craft another.

"Defeating this bill today is not the last step," said Representative
Brad Sherman, a Democrat from California.

US House Speaker Nancy Pelosi said Thursday that House leaders were
"working very hard" to secure support for the Senate-passed bill.

"We're not going to take a bill to the floor that doesn't have the votes.
I'm optimistic that we will take the bill to the floor," said Pelosi, a
California Democrat.

The legislation would extend through 2016 investment tax credits for
solar commercial and residential projects plus remove the $2,000 cap on
credits for residential solar projects. The bill extends the production tax
credit for wind through 2009 and for other renewable resources, such as
biomass, through 2010.

The measure also would provide $1.5 billion in new tax credits for
advanced coal-fired electricity and gasification projects that demonstrate
carbon capture and sequestration technologies.

The bill proposes paying for these tax breaks in part by freezing the
increase in tax deductions for domestic oil and gas production at 6%. Other
revenue raisers would include closing the tax loophole for foreign oil and gas
extraction income and extending and increasing the per barrel tax for the oil
spill liability trust fund.

The legislation also authorizes $800 million in bonds for municipalities
and cooperatives to build electric generation powered by renewable resources.

Buyers of plug-in electric passenger vehicles would qualify for up to
$7,500 in tax breaks under the bill. The bio-diesel production tax credit
would be extended through 2009 as would the alternative fuel excise tax credit
for all fuels except hydrogen.

--Cathy Cash, cathy_cash@platts.com