Tuesday, Jan. 23, 2007 | 7 a.m.
WASHINGTON - In Northern Nevada, the hard work of pulling scalding water from 4,000 feet below ground and turning it into power for Las Vegas could become a little easier with the help of a new energy bill in Congress.
The bill approved by the House would, Robin Hood-style, take away $14 billion in tax breaks from big oil companies and invest it in clean energy such as solar, wind and geothermal. Similar legislation is pending in the Senate.
For Don Falcone, a board member of Nevada Geothermal, a small Humboldt County firm with a contract to provide Nevada Power with geothermal energy by 2009, the production tax credits in the bill would be a tremendous boon to his bottom line and give potential investors more confidence in his enterprise.
"This is not an inexpensive business," Falcone said recently.
Nevada Geothermal has sufficient funds for the initial phases of its $100 million project, which got under way in 2006 as crews drilled the first of up to six extraction wells. Eventually that water would turn electricity-generating turbines, provided the company can secure additional financing.
The House legislation would provide his company up to $4 million a year in production tax credits, which not only would help the company's bottom line but also make the business more attractive to investors.
"Not very many people have $3 million to $4 million to dig a hole to find this stuff," he said. "Every investor says, 'What's the deal with the production tax credit?' "
House approval came days before President Bush is expected to discuss energy issues in today's State of the Union speech. Bush was criticized for signing the 2005 energy bill that offered tax incentives to big oil but little to develop renewable energy.
The national environment debate has shifted over the past year, experts say, taking on urgency as 2006 became the hottest year on record and the evidence of global warming made it a reality for many Americans, according to public opinion polls. The war in Iraq, $3-a-gallon gasoline and record profits for oil companies also fed public demand for alternatives to oil.
Just 36 Republicans supported the House bill, however, with some Republicans saying the legislation punishes traditional energy producers while creating a "slush fund" for new projects.
Republicans in both the House and Senate have said the legislation will do nothing more than raise taxes on the nation's traditional energy producers and force the country to become more dependent on foreign oil. Consumers will pay, they say.
Nevada's Republican Rep. Jon Porter agrees. He and Rep. Dean Heller voted against the House bill. Porter said he supports renewable energy development in Nevada, but argues that the legislation would hurt the oil companies' ability to compete and lead to higher prices for Nevadans at home and at the pump.
"It is the opposite of the sensible energy policies that Nevadans expect," Porter said in a statement. He said he supported calls for alternative legislation.
Nevada Democratic Rep. Shelley Berkley countered that Republicans "had at least six years to actually do something about the energy crisis in this country" and did relatively little to help foster renewable energy.
"Harness the sun, wind, not the moon," she said in remarks on the House floor. "All these possible alternative energy sources I would suggest that we have a golden opportunity to do something."
Tiernan Sittenfeld, legislative director for the League of Conservation Voters, an environmental lobby in Washington, said the scope of the clean energy fund under the bill is unprecedented. She called the bill "such a good first step for the 110th Congress, which said: 'We're listening to the voters who want a new approach on energy.' "
She said the legislation was "really a welcome change from the failed energy policies of the last few years."
The bill does not spell out how the new money would be used. Those specifics are to come in new legislation.
A coalition of environmental groups sent a wish list to the House last week that includes extending tax credits for energy efficient buildings, equipment and appliances; lifting the 60,000 per manufacturer cap on hybrid vehicles that qualify for consumer tax credits; and extending for five years production tax credits for renewable energy companies that are to expire at the end of 2008.
Falcone perks up at that last one - the production tax credits. Nevada, already one of the world leaders in geothermal energy production, has long held promise as a renewable energy production center with its hot-water wells to the north and blazing sunshine in the south. The world's largest solar power plant is being built near Las Vegas.
The tax credits his company could qualify for are out of reach because they expire next year, before his business comes on line - a common problem that has left hardly any geothermal firms able to reap the benefit. Extending the credits' shelf life as environmentalists suggest "would help the industry get established," he said.
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