INTRODUCTION OF THE FUEL ENERGY AFFORDABILITY AND CONSERVATION ACT -- HON. JOHN ELIAS BALDACCI (Extensions of Remarks - March 21, 2000)

[Page: E364]
---

HON. JOHN ELIAS BALDACCI OF MAINE IN THE HOUSE OF REPRESENTATIVES Tuesday, March 21, 2000

Mr. BALDACCI. Mr. Speaker, I rise today to introduce the Fuel Energy Affordability Act. I am pleased to have nearly two dozen of my colleagues joining me as original co-sponsors of this important legislation. The bill takes a two-pronged approach to address issues that have arisen as our constituents cope with dramatically increasing costs of diesel fuel, heating oil and gasoline.

In recent testimony before the House Subcommittee on Energy and Power, the Director of the Petroleum Division at the Energy Information Administration indicated that U.S. crude oil and gasoline inventories are at alarmingly low levels not seen in decades. In addition, we have seen the prices of these products rise over the last year from about $12 per barrel to nearly $34 per barrel in early March.

While there has been some slight moderation in this area, the combination of very high prices and very low inventories has had a severe impact on consumers in the State of Maine and across the nation. You may recall the sharp surge in home heating oil and diesel prices the Northeast experienced in January. Today, gasoline prices still hover near the $2.00 per gallon mark in many areas.

When you live in a state where temperatures in January frequently dip below zero, dramatic increases in heating oil prices are a very serious matter. For people on fixed incomes, it presented a life-threatening choice between paying for delivery of heating oil or buying medicine, between heating the house and buying groceries.

Maine's potato farmers have also seen their livelihoods threatened because trucks could not afford to make the trip to northern Maine to get the crop to market. This high price of diesel caused many truckers to stay off the roads, dramatically affecting delivery of goods throughout the country.

Finally, the high cost of gasoline presents a threat to Maine's tourism industry. Maine's natural beauty and scenic attractions bring in more than $3 Billion of revenues to my state each year. As gas prices creep higher some families are being forced to postpone vacations or stay closer to home. This could have a devastating impact on Maine's economy, and on the more than 12,000 jobs that depend on tourism.

Since the beginning of the year, there have been a number of different options under discussion for dealing with increased fuel prices and low inventories. The Fuel Energy Affordability and Conservation Act which I am offering today seeks to get a the problem from two different angles.

First, my bill will address the problem of major spikes in fuel prices by giving the Secretary of Energy the clear authority to draw down the Strategic Petroleum Reserve when oil and gas prices rise sharply due to anti-competitive activity. This action provide the means by which the Administration can act to lower and stabilize prices, particularly during times of acute need.

Second, my bill will address the issue of consumption by encouraging conservation. It will provide a non-refundable income tax credit of 20% for expenses of up to $10,000 incurred by the taxpayer for qualified energy efficient improvements to a principal place of residence.

This credit will also apply to small businesses with average gross receipts of up to $10 million for the term of the credit. The credit would be available for expenditures made between January 1, 2000 and December 31, 2004.

The covered improvements either alone or in combination must improve annual energy performance by at least 30 percent and would include energy efficient building envelope components such as windows, walls, and roofs, and any energy efficient heating, cooling or water heating appliance. Certification of improved energy efficiency could be made by the contractor who made or installed the improvements, a local building regulatory authority, or a qualified energy consultant.

With continued price volatility expected through the summer, and possibly into the fall, we must take steps now to mitigate the impact this could have on the economy, commerce, tourism, and the states we represent. While this legislation does not have all the answers, I believe that it takes a good step forward. I urge my colleagues to join me in supporting this legislation.
END