The largest energy bill in more than a decade has advanced on Capitol Hill, as the House approved the voluminous measure on July 28, by a 275-156 vote. Approval by the Senate was to follow, perhaps as early as later the same day. It then would go to President Bush, who is expected to sign it.

After the House vote, Energy and Commerce Committee Chairman Joe Barton (R-Texas), who chaired the conference committee that produced the final version, said, "As it is implemented, I think you're going to see the market choose to use clean coal technology for more powerplant construction. I think you're going to see the market choose new nuclear plant technology."

A key piece of the measure is a package of tax incentives for oil and gas, electric utilities, nuclear power and conservation that total $14.6 billion through 2015.

In the tax agreement, which was reached on July 26, House and Senate conferees also included several revenue-raising measures, reducing the tax section's net cost to the Treasury by $3 billion.

The entire energy conference committee report, which spans 1,725 pages, was filed in the House and Senate on July 27. (View conference report at

Senate Finance Committee Chairman Charles Grassley (R-Iowa) says the tax section is "well-balanced among renewable energy, conservation and traditional energy sources." (A summary table of the tax provisions and estimated costs is available at

The incentives include accelerating depreciation for natural gas distribution lines, and electricity transmission and distribution facilities, allowing companies to write off such costs over 15 years, compared with 20 years now.

The measure extends for two years the current credit for electricity produced by wind, geothermal biomass and other renewable sources. It adds hydropower and Indian coal to the list of sources qualifying for the credit.

It also establishes new tax credits for clean-coal facilities--integrated gasification combined cycle projects would be eligible for a 20% investment tax credit, while other electricity-producing clean-coal projects could get a 15% credit.

Nuclear power would receive a new tax credit for energy produced by new nuclear facilities. The credit equals 1.8 cents per kilowatt hour produced over eight years. There also would be changes in funds to pay for decommissioning nuclear facilities, including allowing pre-1984 contributions to such funds to qualify as deductible expenses. The Nuclear Energy Institute says that re-classification would last for a nuclear powerplant's remaining life.

In the energy conservation area, the agreement includes a deduction for commercial buildings that cut annual energy and power consumption by 50% compared to the American Society of Heating, Refrigerating and Air Conditioning Engineers standards. A summary of the bill from the Senate Finance Committee says, "The deduction would equal the cost of energy-efficient property installed during construction," up to a cap of $1.80 per sq ft. There would be a deduction of 60 cents per sq. ft. "for building subsystems," it adds.

Energy legislation has been a goal of President Bush since early in his first term, but it has had a rocky road on Capitol Hill. Bills passed the House and Senate in 2003, but a final version was killed in the Senate late that year, because of objections to the bill's $30-billion price tag and to protections for makers of the gasoline additive MTBE.

This time, the House-passed bill contained MTBE protection, but the Senate still objected. Barton modified the MTBE provision, to set up a fund to finance cleanup of MTBE-related pollution. But the Senate conferees were opposed and the provision didn't make it into the final version. Conferees did agree to a provision that permits parties to MTBE lawsuits seek to have the cases heard in federal courts.

Also absent from the conference agreement was a Senate provision that would have required electric utilities to derive 10% of their power from renewable sources by 2020. The House objected to that "renewable portfolio standard" and it, too, isn't in the final legislation.

Industry groups praised the bill. National Association of Manufacturers' President and CEO John Engler called it "a key victory for manufacturers and the U.S. economy." But environmental groups blasted the legislation. Philip E. Clapp, president of the National Environmental Trust, contends that the final package "is a big fat zero" in reducing dependence on foreign oil, cutting gasoline prices and promoting use of renewable energy.

Among provisions of interest to construction, the conference agreement would repeal the 1935 Public Utility Holding Company Act, a move that industry officials and lawmakers contend will spur spending to upgrade the nation's transmission grid. It also would extend Price-Anderson Act liability protection for Dept. of Energy contractors through 2025.

In addition, the final bill also directs that $1 billion in federal oil and gas lease revenue over five years be used to restore ecosystems in Louisiana and five other energy-producing states. That will help fund a massive federal-state plan to stem Louisiana's wetlands losses.

Also included is a four-week extension of Daylight Saving Time, which supporters say will trim energy consumption, and mandatory energy-efficiency standards for federal buildings and refrigerators and other appliances.