The Senate Tuesday overwhelmingly passed its $838 billion economic stimulus package that offers tax breaks and increased spending for production of renewable fuels, new power transmission facilities and energy efficiency and conservation. But the tough work lies ahead as the Senate and House try to meld their divergent bills into a conference report.

The bipartisan measure cleared the Senate by a vote of 61-37, with the backing of three Republicans — Sens. Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania. The amended bill (HR 1), which enabled Democrats to attract the much-needed Republican votes, was the product of negotiations led by centrists Collins and Sen. Ben Nelson (D-NE).

House Democrats were able to pass their $819 billion stimulus bill without any support from Republicans, but Democrats needed the votes of at least two to three Republicans to overcome a filibuster and get the measure through the Senate. Reconciling the two bills will be like walking a very fine tightrope. “They must avoid doing anything that would jeopardize more than a single Republican vote in the Senate because a conference report would face the same procedural hurdles in the Senate as the original bill, requiring another 60-vote supermajority,” reported CQ Today.

Because of the time pressure, conference on the bills won’t be formal. “[The] potential inability to make significant changes — and the logistical complications inherent in a conference committee — could lead the House to make only minor changes and ‘pingpong’ the bill back to the Senate,” CQ Today said. Congress has set a self-imposed deadline of Friday to send the economic stimulus package to Obama, but negotiations could drag on into the weekend.

The Senate measure includes more than $19 billion in energy tax breaks and incentives to promote renewable fuels, energy efficiency, alternative energy and conservation, according to Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee. Spending in the Collins-Nelson compromise was estimated at $43 billion on renewable fuels, efficiency, conservation and new power transmission facilities (see Daily GPI, Feb. 10).

The tax portion of the bill extends the in-service date for wind facilities and other qualifying facilities to qualify for a production tax credit; removes the cap on the investment tax credit for small wind property; authorizes $1.6 billion of clean renewable bonds to finance facilities that generate electricity from renewable resources; provides $2.4 billion for conservation bonds; offers a 20% research and development (R&D) tax credit in the fields of fuel cells, energy storage, renewable energy and the transmission and distribution of electricity; and conditions eligibility for a $10/ton tax credit on producers proving that the carbon dioxide injected to enhance oil and gas recovery has been permanently sequestered in a field.

The spending part of the measure includes an additional $2.6 billion for energy efficiency and renewable energy R&D; $4.2 billion for energy efficiency and conservation grants; $4.6 billion for fossil energy R&D; $2.9 billion for weatherization assistance; $4.5 billion for smart-grid activities, such as work to modernize the electric transmission grid, enhanced security and reliability and energy storage research; $8.5 billion for new loan guarantees to spur wind or solar projects and transmission projects; and $6.5 billion of increased borrowing authority for the Bonneville and Western Areas Power Administrations to construct new transmission facilities and upgrades.

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