Washington (Platts)--15Jan2009

US House of Representatives leadership have unveiled their proposed $825
billion economic stimulus legislation, which includes $32 billion to transform
the nation's electricity grid and boost renewable energy resources.

Congress over the next two weeks is expected to debate and vote on the
so-called American Recovery and Reinvestment Bill, which includes $550 billion
in grants and loans that are targeted to stimulate the economy and $275
billion in tax cuts.

The measure, the product of weeks of negotiations between the House and
President-elect Barack Obama's transition team, also will extend for three
years production tax credits for a range of renewable industries.

"We have now frozen the design from the standpoint of our proposal,"
House Speaker Nancy Pelosi said Thursday. She emphasized that the bill likely
will change next week, when the House Appropriations and Ways and Means
Committees mark it up. The Senate is still working on their own proposal
to kick-start the economy.

"We have shared values, and so we have shared priorities in the
legislation," Pelosi said of the package Senate Democrats are crafting.

Pelosi called the bill's investments in clean energy "very important" in
terms of creating jobs and improving US energy infrastructure.

Specific energy provisions include $11 billion for improving the grid's
efficiency and building new lines to reach remote renewable resources. The
package also contains $8 billion for loan guarantees for renewable energy
power generation and transmission projects.

The package would provide significant support for energy efficiency,
including $6.9 billion for local government energy efficiency block grants,
$2.5 billion for energy efficiency housing retrofits and energy efficiency
research and development. Projects to weatherize houses in low-income
neighborhoods would receive $6.2 billion.

To address climate change, the package would provide $2.4 billion for
demonstration projects to help develop carbon capture and sequestration
technology.

In an effort to get electric cars on the road, the bill offers $2 billion
in loans and grants for vehicle batteries. Another $200 million would go
toward grants for electric vehicle technologies and $600 million would go to
replace older federal fleets with alternative fuel vehicles.

The bill's $275-billion tax cut package will include at least $20 billion
for renewable energy production tax credits. PTCs for wind, geothermal and
other industries would be extended for an additional three years beyond
December 2009. Solar invest tax credits will not be extended further, since
they were extended for eight years last year.

The House bill also would remedy the current renewable tax credit problem
incurred in the current rocky economy with a temporary election to claim the
investment tax credit in lieu of the production tax credit.

The tax portion of the stimulus also would include more funds for the
clean renewable energy bonds, but dollar figures were not yet available, a
House Ways and Means Committee spokesman said Thursday. Qualified energy
conservation bonds also will be available.

There also willl be tax credits for "smart energy" conservation, energy
efficiency, and renewable energy R&D credit.

--Cathy Cash, cathy_cash@platts.com
--Jean Chemnick, jean_chemnick@platts.com