Washington (Platts)--9Feb2009

In an important procedural victory for US President Obama and his
Democratic allies in Congress, the US Senate voted Monday to advance a massive
economic stimulus bill that would provide billions of dollars to modernize the
electricity grid and to develop a host of cutting-edge energy technologies.

The Senate voted 61-36 to cut off debate on the bill, narrowly surpassing
the 60 votes that were required under the chamber's rules. The vote clears the
way for the Senate to hold another must-pass procedural vote on Tuesday, with
a final up-or-down vote on the package immediately after that.

The bill at issue is designed to jump-start the flagging US economy with
about $829 billion in federal spending and tax incentives, including $39
billion for the Department of Energy to spend on programs such as
demand-response technologies for the electrical grid and carbon capture and
storage systems for coal-fired power plants.

The bill is a compromise measure that a small group of moderate Senate
Democrats and Republicans cobbled together after conservative Republicans
threatened to block a larger, $920-billion stimulus bill that the Senate's
Democratic leaders debated last week.

Conservative Republicans said the price tag of that bill was far too
high, and that its programs would not provide the sort of short-term boost
that the economy needs.

Still, only three Republicans--Susan Collins and Olympia Snowe of Maine,
and Arlen Specter of Pennsylvania--broke party ranks and joined Democrats to
support the compromise measure.

Senator Mitch McConnell of Kentucky, the Republican leader, complained
that the compromise bill would increase the deficit by some $1.2 trillion,
when interest is added in.

"This is a poorly crafted bill," McConnell said before the vote Monday.
"I think you could get the job done for about half of [the $829 billion],
which would still be a very robust stimulus package by any historical
standard."

The compromise bill includes $9.6 billion in renewable energy
investments, $6.4 billion toward electric transmission and smart-grid
investments and $250 million in rural renewable energy investment, according
to its sponsors.

The House of Representatives passed an $819-billion version of the
stimulus bill on January 28, in a 244-188 vote that failed to receive the
support of a single Republican.

If the Senate does manage to pass the compromise bill later this week, it
will have to work out all its legislative differences with the House before a
final version is sent to Obama for his signature.

Among the many differences between the House and Senate stimulus bills is
the amount for loan guarantees to develop standard renewable energy resources.
The Senate compromise provides $7 billion, while the House bill would allocate
$6 billion.

The Senate version would also create an investment tax credit program for
"advanced energy property," which would include smart-grid technology,
renewable energy equipment, carbon capture and storage equipment and more
efficient transmission.

The credit would be worth 30% of the capital cost of the facility. Such a
program, estimated to cost $1.4 billion, is not part of the House package.
 
--Brian Hansen, brian_hansen@platts.com
--Cathy Cash, cathy_cash@platts.com