President Carter won a narrow but important victory yesterday as the House Commerce Committee adopted his plan to continue price controls on natural gas.
By vote of 23 to 20, the committee rejected a proposal to deregulate newly discovered natural gas and then gave final approval to the non-tax parts of the President's energy plan substantially as he had submitted it.
These provisions, plus the tax and rebate proposals approved by the Ways and Means Committee and smaller parts drafted by three other committees, now go to an ad noc panel, which will study them for a week to decide whether floor amendments should be offered to fill gaps or reconcile contraditions. The House is scheduled to vote on the omnibus bill the first week in August.
Besides setting up a new system for regulating the price of gas, the Commerce Committee provisions would:
Require local utilities to inform customers of their home insulation needs and permit them to make insulation loans but not to install insulation unless there are not enough local suppliers.
Authorize $900 million in grants over three years to help schools and hospitals insulate.
Require major home appliances to meet energy standards.
Require changes in utility rate structures to forbid selling power below cost and make other changes to conserve energy.
Give the government broad powers to force conversion of industrial and utility boilers from use of scarce oil or gas to abundant coal.
By far the most controversial issue was the multibillion-dollar question of whether to remove price controls from natural gas. Producers have been seeking removal for 23 years.
Natural gas shipped across state lines is regulated at a wellhead price of up to $1.45 per thousand cubic feet. Gas consumed within the state where it is produced is not regulated and sells at about $2. This two-price system helped produce shortages in northern consuming states last winter and a glut of gas for low priority purposes in producing states such as Texas.
Carter would wipe out this dual market extending regulation to intrastate as well as interstate gas but raising the wellhead ceiling price to $1.75. The administration said this should be ample incentive for producers to explore for more gas since the regulated price only two years ago was 52 cents and 10 years ago it was 12 cents per thousand cubic feet.
But gas producers insist the only way to get more gas out of the ground is to deregulate new gas and let the market set the price.
Two weeks ago the President's plan won a preliminary procudural victory in the Commerce Committee by a vote of 22 to 21.
Yesterday deregulation forces tried to recoup by offering a substitute provision providing that deregulation would take effect only after Congress enacted an excess profits tax to prevent windfall profits to producers.
This never came to a vote. Committee Chairman Harley O. Staggers (D-W.Va.) ruled it was out of order for the committee to write legislation conditioned on action by another committee. Only ways and means can report tax legislation.
Rep. Timothy E. Wirth (D-Colo.) then scaled down his substitute to omit mention of a tax but providing that deregulation would not take effect until next April 30, or sooner if Congress so provided by a resolution adopted by both Houses. The purpose of this was to five Congress time to pass an excess profits tax. This was rejected, 23 to 20.
The change from the earlier 22 to 21 vote was caused by a switch by Rep. Tim Lee Carter (R-Ky.) who became persuaded that home owners would pay higher gas bills, though the wirth proposal contained a provision to make industry absorb early price increases. Housholders would share in the cost increases if the price of gas rose to 120 per cent of the cost of important oil. Carter was told by several members that this probably would happen soon.
Three Republicans and 20 Democrats supported the president's plan, while none Democrats joined 11 Republicans opposing it.
Rep. Matthew J. Rinaldo (R-N.J.) said he was voting to continue regulation because utility regulatory officials in his state predicted that the average monthly gas bill in Rinaldo's district would rise from $42.50 to $76.32 under deregulation. Rinaldo said no one can say for sure how high the price of deragulated gas would go, but "with a virtual monopoly we can't have price increases with the sky the limit."