House climate bill full of sweetening provisions

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Less than 24 hours before the House approved its landmark energy and climate bill last month, Rep. Ed Perlmutter (D-Colo.) got several paragraphs added to the 1,200-page measure -- additions expected to be worth millions of dollars to companies that install solar panels.

About the same time, Rep. Melissa Bean (D-Ill.) took the lead in adding another little-noticed provision to the legislation -- a section designed to prevent regulatory action she said could shut down the multitrillion-dollar market for over-the-counter derivatives, a complex type of financial instrument.

These narrowly focused amendments were part of a torrent written into the bill during the wheeling and dealing that took place as Democratic leaders rounded up the votes needed to squeak out a victory.


There were about 300 pages of last-minute amendments, many designed to make money for industries and constituencies important to fence-sitting lawmakers.

The bill that passed the House included sweeteners for developing natural-gas-powered cars and energy-efficient mobile homes, plus financial rewards for early participants in the Chicago Climate Exchange, North America’s first trading center for greenhouse gas emissions.

Surprisingly for a climate bill, there was also a provision making it harder to develop the vast wind-power potential of states like North Dakota -- a key element in President Obama’s strategy to fight global warming.

Some of the provisions could be tweaked or killed in the Senate. But more likely, analysts said, more will sprout as Democratic leaders and the White House strive to build a majority on that side of Capitol Hill.

Making deals to get votes is a time-honored part of the legislative game, but the enormous scale of the climate bill and the pressure to act quickly in a time of economic crisis put the process on steroids.

“We started hearing about deal-making before the bill came to the House for debate, but then it blossomed,” said Rep. Joe L. Barton of Texas, the top Republican on the energy and commerce committee and a critic of the legislation.


Obama indicated he would accept the grab bag of added provisions so long as they did not undermine the bill’s core goals of curbing global warming, spurring renewable energy production and efficiency, and creating “clean energy” jobs.

“There are going to be provisions in the House bill and in the Senate bill which I question, in terms of their effectiveness,” Obama told a group of energy reporters in the Oval Office after the legislation passed. “I’m not going to have a line-item veto, so ultimately, you know, I’ll take a look at the final product.”

The centerpiece of the climate bill is establishing specific limits on heat-trapping greenhouse gas emissions from major pollution sources such as power plants and factories. To comply with the limits, which would tighten over time, emitters would be required to obtain permits or pay to offset their emissions by funding tree-planting or other means of soaking up carbon dioxide.

The system, called cap and trade, would impose new costs on some parts of the economy but open profit opportunities for others. For example, a recent analysis by the investment group Goldman Sachs projects that the U.S. emissions trading market could generate as much as $400 million a year in trading fees.

Perlmutter, the Colorado Democrat, used his seat on the rules committee to insert loan guarantees and a variety of other incentives for home energy efficiency and so-called distributed power generation -- in-home sources of electricity such as solar panels.

He also added language to prevent homeowners associations and real estate covenants from banning construction of solar panels on the roofs of houses.


John Berger, chief executive of Houston-based Standard Renewable Energy, one of the nation’s largest installers of solar panels, predicted the homeowners association language would generate millions of dollars in new sales to his company alone.

Perlmutter said it was a matter of national security. “To have a distributed and diverse energy grid just makes us that much stronger of a country,” he said in an interview.

One of the congressman’s biggest campaign contributors is the International Brotherhood of Electrical Workers, which is betting that the expansion of solar power will provide new jobs for its members.

In the case of wind power, the key to realizing its potential is the construction of transmission grids to carry electricity from the windy Great Plains states to urban centers.

The climate bill gave the federal government the power to overcome local delays and speed up construction of the power lines. But East Coast representatives, worried that jobs would migrate to Chicago and other cities closer to the sources of wind power, changed the bill to take away that expediting power anywhere east of the Rocky Mountains.

Bean, a member of the House Financial Services Committee who is helping design a regulatory framework for the financial industry, said the climate legislation could kill trade in over-the-counter derivatives, which are touted for reducing investor risks but blamed for helping to bring on the worldwide recession.


Bean, who has long received campaign contributions from the financial services industry, made it clear to party leaders that she would oppose the bill unless the language was changed.

Two days before the vote, the change was made. Bean voted yes.