A House Commerce subcommittee begins 2 1/2 weeks of voting today on most non-tax parts of President Carter's energy plan, highlighted by the divisive multibillion-dollar question: how high to set natural gas prices.
James R. Schlesinger, Jr., Carter's energy adviser, told the suncommittee at its final hearing yesterday that deregulation of natural gas would cost consumers at least $120 billion in added payments to producers by 1985. Supporters of deregulation denounce his estimate as "nonsense" and "inflamatory". But Schlesinger called it "modest," and added that if he had thrown in further piece increases that may be caused by inflation the total would be "staggering."
Whether deregulation of interstate natural gas shipments is essential to increase supply or would simply rip off consumers, as Schlesinger contends, is an issue on which both the subcommittee and the House are closely divided.
Last year deregulation lost in the House by four votes. Rep. John D. Dingell (D-Mich.), who favors continued regualtion, said the scheduled subcommittee vote could go either way. Rep. Robert C. Krueger (D-Tex.), leading advocate of deregulation, believes he can win in subcommittee.
During last fall's presidential campaign, Carter sounded as though he favored deregulation, which has been a political issue for more than 20 years. But ultimatley he proposed extending regulation to intrastate gas, consumed in the state where produced, and fixing the price for all new gas at $1.75 per thousand cubic feet. The present regulated piece for interstate gas is $1.45. Schlesigner said producers could make a lot of money at the proposed new price.
Krueger said later he couldn't understand Schlesinger's $120 billion price tag on deregulation would include old gas as existing contracts expire. Krueger said his proposal would retain regulation permanently over gas flowing across state lines from existing wells.
In his testimony Schlesigner also gave a considerably reduced estimate of the amount of home insulation and solar heat installations that would be stimulated by proposed administration tax credits. He said Treasury department projections indicate 60 per cent, of the nation's residents, rather than 90 per cent as earlier estimated, would be insulated by 1985, and 1.3 million, not 2.5 million, would have solar heat installed.
Although natural gas will be the big fight in Dingell's markup sessions, there will be others.
His part of the bill includes powers to the government to order industry and utilities to switch from use of oil and natural gas to coal. (The Ways and Means Committee, which starts its tax markup next week, is considering proposed taxes and credits to induce conversions.)
Dingell said the proposed coal conversion program is "in disarray and needs work." The potential problems he sees include environmental impact and wheter transportation will be available to move 400 million to 500 million more tons of coal a year.
In addition, Dingell's subcommittee will act on proposals to:
Require utilities to advise and help customers insulate homes, including making loans that could be repaid on monthly bills. Dingell said this contains antitrust problems.
Require fuel efficiency standards for major home appliances.
Require utilities to change rate structures to encourage fuel savings.
Authorize grants to schools and hospitals to insulate.
There has been some talk of coping with the problem of the big gas-guzzling auto by tightening minimum miles-per-gallon standards, which Dingell's subcommittee wrote into law two years ago, in place of Carter's proposed tax on the sale of gas-guzzlers and the controversial rebate to high-mileage cars. The 1975 law requires that the fleet average of an auto producer get at least 18 miles per gallon on next year's models and 27 1/2 miles by 1985.
If a choice is to be made between the two it probably will wait until the House Ad Hoc Energy Committee assembles the package after the Commerce and Ways and Means committees act on their separate portions. The gas-guzzler tax is before Ways and Means, while Commerce has jurisdiction over standards.