Rendell links energy plan with defense

HARRISBURG - Linking the war in Iraq to the nation's reliance on foreign oil, Gov. Rendell yesterday made an urgent pitch to the legislature to pass his sweeping, but embattled, alternative-energy plan.

Rendell opened his address to a special session on energy with a moment of silence for the 189 Pennsylvanians who have died in Iraq and Afghanistan, and later quoted from Alan Greenspan's recently published memoir, in which the former Federal Reserve chairman says the Iraq war is largely about oil.

"The decisions we make about energy affect almost every aspect of our lives," Rendell told lawmakers who packed the House chamber yesterday.

"But more and more, energy issues affect our basic economic health and our national security - the issues that are at the core of every nation's well being," he said.

Whether the broader themes of national security and energy independence that Rendell touched on yesterday will bring along lawmakers who have already fought him on this issue once - bringing government to the brink of a shutdown - remains a question mark.

Because in Harrisburg, when it comes to "clean energy," almost everyone has a plan.

Senate Republicans, for instance, have pushed hard on a competing proposal. Their plan has many of the same goals as Rendell's - stepping up production of alternative fuels, like ethanol, while cutting electric rates and consumption - but finances a smaller investment in very different ways.

House Republicans have their own, separate proposal as well.

The Senate is controlled by the GOP. Democrats control the House by a single vote.

Top Republicans yesterday did not appear to be any more persuaded by Rendell's proposal than they were when the governor first introduced it in February.

Senate Majority Leader Dominic Pileggi (R., Delaware) noted the "substantial differences" between the governor's and the Senate's proposal.

And he said that while an alternative energy plan for Pennsylvania will set the state on the path of reducing its reliance on foreign oil, "it will take years for that direction to become measurable."

"The reference to the Iraq war in the governor's speech may be good rhetoric, but since we all share the objectives of promoting renewable energy, I don't see where it was helpful - it may have even had a contrary effect by reaching where a connection really doesn't exist," Pileggi said.

At the heart of Rendell's energy plan is an $850 million Energy Independence Fund.

Of that, $500 million, would be invested in clean-energy projects such as biofuel plants, solar and advanced coal technologies. Another $100 million would be used to help state firms expand clean-energy production and attract private-sector investors.

There would also be grants to reimburse homeowners and small businesses for up to half the cost of installing solar panels and $100 rebates for residential purchases of energy-efficient air conditioners and refrigerators. The plan would also allow homeowners to install smart meters - high-tech devices that help target electricity use to times when the cost is lowest.

By 2017, Rendell's energy plan would require every gallon of gasoline sold in the state to include 10 percent ethanol; and every gallon of diesel gas to include an increasing amount, up to 20 percent, of soy or other renewable oil.

The $850 million fund would be financed through the proceeds of a bond issue, and the bonds would be paid off over 30 years with a new fee added to electric bills.

That per-kilowatt-hour fee would cost residential customers an average of $5 a year, according to the administration. For large customers, the fee would cost no more than $10,000.

Rendell says a small fee now would produce a larger, long-term reduction in high-cost energy use.

But it is a major sticking point. "New taxes, new fees, do not have any place in the Senate at this time," said Senate President Pro Tempore Joseph Scarnati (R., Jefferson).

The Senate GOP is pushing a $530 million proposal that would borrow $250 million up-front, and spend an additional $40 million annually for seven years for alternative-energy projects and residential conservation.

Rendell left the door open for a compromise during the forthcoming weeks of debate.

"I think I have made my goals clear . . . but I am open to other ideas about how best to reach these goals," he said yesterday.

John Hanger, president of the environmental advocacy group PennFuture, said yesterday that he believes Pennsylvania cannot take a substantial bite out of its reliance on foreign oil without a significant investment, like Rendell's, in the production of alternative fuels.

If every state adopted similar proposals, "we would be well on the road in energy independence."

To read Gov. Rendell's speech, go to http://go.philly.com/energyplanEndText