Bush Tax Incentives Fuel Plan on Energy

President Bush on Saturday called for a “new kind of conservation” that saves power through tax incentives and energy-efficient technology, signaling a shift in tone as he prepares to unveil his long-range energy policy.

Bush’s focus on conservation in his weekly radio address follows criticism that he and Vice President Dick Cheney have been drafting a plan that is heavily weighted toward more oil and gas drilling while giving short shrift to other approaches to the energy problem.

In a clear response to such attacks, Bush pledged that conservation would be a major element of his plan, to be released Thursday at an energy-efficient power plant in St. Paul, Minn.

Previewing some of his policy’s details, Bush proposed tax credits for the purchase of gas-electric cars and expansion of a government program that promotes energy efficiency in buildings and products.

However, rather than call for Americans to sacrifice, as President Carter did during the energy crisis of the 1970s, Bush said, “Some think conservation means doing without. That does not have to be the case.”

Conservation, he said, can be achieved through technological innovation, such as building sensors into buildings to shut off lights as soon as people leave the room.

“Over the long term, the most effective way to conserve energy is by using energy more efficiently,” Bush said. “Pushing conservation forward will require investment in new energy technology, and that will be part of my administration’s energy plan.”

Bush’s stress on conservation seemed to contrast with recent comments by Cheney, who has been in charge of drafting the energy policy. In a recent speech, Cheney said, “Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy.”

Energy conservation advocates, although welcoming Bush’s comments, noted that the administration has adopted less stringent energy-efficiency standards for home central air conditioners than those advocated by the Clinton administration. The Bush administration contended that the standards proposed by Clinton set too high a burden on consumers.

David M. Nemtzow, president of the Alliance to Save Energy, a Washington-based coalition of business, consumer, government and environmental leaders, called Bush’s emphasis on conservation a “great start,” and he said it reflected a “change in tone from where [the administration] has been in the past.”

However, Nemtzow added, “There needs to be a lot more.”

Bush, who has been criticized by California officials for not doing more to address the state’s electricity crisis, said he is “very concerned” about the possibility of continuing blackouts in California this year.

He noted that federal facilities in California have been ordered to cut peak electricity use--including setting thermostats at 78 degrees and turning off escalators during power emergencies--and military bases in the state will reduce peak-hour use by 10%.

“These are immediate measures to help with an immediate problem,” Bush said.

But Gov. Gray Davis, reacting to Bush’s address, assailed the White House for refusing to back firm price controls on wholesale electricity supplies. Bush contends that price controls will discourage energy companies from building power plants.

California last week had to pay $2,000 a megawatt hour for electricity, up from $30 a year earlier, Davis said in a statement. The power supplier, he noted, was a Texas energy company.

“I hope that President Bush and I can agree that any worthy energy policy must address the price gouging of consumers by greedy energy suppliers, particularly in states like California that are working valiantly to bring additional supply online,” Davis said.

Based on details that have emerged in recent days, Bush’s energy blueprint will, among other things, call for opening up more federal land to oil and gas exploration, encouraging development of more nuclear power, streamlining the approval process for building new power plants and giving federal authorities eminent domain power to acquire private property for transmission lines.

On the conservation front, the plan will include:

* Tax incentives to encourage businesses to use more energy-efficient power plants;

* Tax credits for purchase of high-mileage, low-emission “hybrid” vehicles that use electronics and fuel cells to significantly improve their gasoline mileage. Bush, in his remarks Saturday, did not specify an amount. Bipartisan legislation introduced in Congress would provide a tax credit of $1,000 for consumers who purchase hybrid vehicles;

* Expansion of a federal program that promotes energy efficiency in office buildings to cover schools, stores, health care facilities and homes;

* Extending the federal “Energy Star” labeling program to additional products, appliances and services. The Energy Star is a federal seal of energy efficiency coveted by many manufacturers;

* Strengthening public education programs on energy efficiency. The typical homeowner can save about $400 a year on a home energy bill by using Energy Star-labeled products, such as computers and air conditioners, the White House said.

Skepticism about the administration’s commitment to conservation was sparked in part by proposed budget cuts to the Energy Department program designed to promote renewable energy sources. White House officials say Bush is considering restoring some of the money.

Some members of Congress, mostly Democrats, also have been pushing the administration to recommend tougher fuel economy standards for sport-utility vehicles. But Bush’s policy report is expected to defer a recommendation until the National Academy of Sciences completes a study this summer on how tougher standards could affect the auto industry.

Sens. Dianne Feinstein (D-Calif.) and Olympia J. Snowe (R-Maine), who are sponsoring a bill to increase the standards, contend it would save 1 million barrels of oil a day.