Washington (Platts)--26Jan2009

US President Barack Obama will set up a temporary $100 billion program to
help finance new renewable energy projects and will also seek to build or
modernize 3,000 miles of transmission lines as part of his national economic
recovery package, the White House said Saturday.

These two major moves as well as his desire to install 40 million smart
meters in American homes, also articulated Saturday, raise the profile of
renewable power and building a more efficient power grid as part of the $825
billion package. Smart meters allow consumers to save money and power in part
by more closely tracking electricity consumption.

The White House released the details in a brief outline as a side to
Obama's weekly radio and internet address. These individual programs are part
of a broader effort embodied by the bill to create or keep four million jobs
in an increasingly bleak economy.

"To accelerate the creation of a clean energy economy, we will double our
capacity to generate alternative sources of energy like wind, solar, and
biofuels over the next three years," Obama said Saturday morning. "We'll begin
to build a new electricity grid that lay down more than 3,000 miles of
transmission lines to convey this new energy from coast to coast."

The $100 billion Clean Energy Finance Initiative comes as credit
markets continue to freeze up. "The finance authority will provide loan
guarantees and other financial support to help ease credit constraints for
renewable energy investors and catalyze new private sector investment over the
next three years," the White House said.

The idea of a green credit program had been floated on Capitol Hill
recently and it could encounter some resistance although it is likely it will
stay within the package. A loan guarantee program within the US Department of
Energy worth $38.5 billion passed Congress in 2005 but a single dollar has yet
to be awarded under that program.

Obama recently visited a wind turbine factory in Ohio where he said that
credit needs to be eased to the renewable power industry.

"If we don't act now, because the economic downturn, half of the wind
projects planned for 2009 could end up being abandoned. Credit markets have
frozen up," he said January 16. "Its very difficult because of the capital
intensive nature of these projects for them to move forward if they can't get
loans, if they can't get access to credit."

The president has set a February 16 deadline for getting the massive plan
to his desk and despite protests from the minority Republicans, leading
Democrats have expressed little worry of meeting that goal. The package
includes $275 billion in individual and business tax cuts as well as $550
billion in spending on energy, infrastructure, education, and health care.

He also wants to spend three quarters of the money in the first 18 months
to help create jobs as soon as possible. "The administration will work with
congress to refine this package to ensure that it meets this 75% goal," it
said in the four-page outline.

The White House release also focused on other previously mentioned goals
such as weatherizing two million homes and increasing the efficiency of three
quarters of federal building space. It estimates that these actions would save
$350 annually for low-income families on average and $2 billion per year for
US taxpayers, respectively.
-- Alexander Duncan, alexander_duncan@platts.com