Washington (Platts)--21Jan2009

The US House Energy and Commerce Committee is expected to vote Thursday
on energy-related provisions of an $825-billion economic stimulus bill that
would provide more than $30 billion on efforts to update the US electricity
grid and increase energy efficiency.

The bill contains, among other things, provisions that would provide up
to $4.5 billion to fund "smart grid" demonstration projects. The money would
be distributed in the forms of grants covering half the cost of such projects.
Further, the measure would remove language in the 2007 Energy Independence and
Security Act that limited to five the number of smart grid demonstration
projects eligible for funding.

To help get other capital-intensive projects off the ground, the bill
also would establish an $8-billion loan guarantee programs for renewable
energy and electric transmission projects.

In addition, the measure would make $3.4 billion available in grants for
state energy programs that advance efficiency through new regulatory policies
that ensure electric and gas utilities will not lose money and can even earn a
profit on energy efficiency investments.

To get these grants, governors must notify the US energy secretary they
will try to ensure that their state regulatory commissions implement policies
to reward efficiency, including those that decouple the amount of energy a
utility sells from its earnings.

The legislation also would require that the Department of Energy
analyze how inadequate transmission capacity can constrain a large portion of
available renewable energy resources. The study must be part of the
department's 2009 National Electric Transmission Congestion study due in
August.

Further, the bill would require DOE to report why sufficient transmission
has not be developed and make recommendation to Congress to address the
problem.

The stimulus package would provide more than $6 billion over three eyars
to expand the coverage for weatherization programs and increase the amount of
assistance per home from $2,500 to $5,000.

--Cathy Cash, cathy_cash@platts.com