The House and Senate by a wide margin voted late Thursday to extend several energy tax credits, including a booster for marginal oil and gas wells, as part of a $146 billion tax cut package for the middle class, sending the bill to President Bush for his signature.

The bill (H.R. 1308) would extend until Jan. 1, 2006 the popular production tax credit for electricity from wind, closed-loop biomass and poultry waste; and the taxable income limit on percentage depletion for oil and natural gas produced from marginal wells. It also would defer the phase-out of the credit for qualified electric vehicles and a deduction for clean fuel-vehicle property until Jan. 1, 2006.

The energy tax credits were estimated at $1.33 billion, with the largest chunk ($1.1 billion) going to support wind power development. “This action by Congress and the expected signature of President Bush mean that about $3 billion in wind energy investments forecast over the next several years are now back on track across the country,” said the American Wind Energy Association.

House-Senate conferees lifted the energy extenders from the stalled corporate tax overhaul bill (S. 1637), which includes a $19 billion energy tax package, and added it to the middle class tax cut bill because of concerns that the corporate tax bill would not be passed before the Nov. 2 election, according to Bill Wicker, a spokesman for the Senate Energy and Natural Resources Committee. It appears the idea was to put the energy tax extenders in the bill that would pass first.

Energy analyst Christine Tezak said her firm, Charles Schwab & Co. Inc., initially believed that placing the energy tax extenders in another bill “indicated a death” of comprehensive energy legislation this year, but she noted that “Congress has yet to actually concede” defeat of the energy bill.

“At the moment…the incorporation of the energy tax extenders in the middle class tax cut bill does not appear to be adversely impacting the efforts currently underway to move the comprehensive energy bill forward,” Tezak said. But if the energy bill should remain stuck in the Senate, “the pressure of needing to reauthorize the popular wind production tax credit and other expiring taxes won’t be available to provide re-ignition” of the energy measure.

Tezak is more optimistic than some lawmakers about the passage of an energy bill in the waning days of the current session. Sen. Ben Nighthorse Campbell (R-CO) and Rep. Mark Udall (D-CO) all but sounded the death knell for the measure on Thursday (see related story).

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