The Carter administration, stepping up its energy initiatives, proposed a $12 billion plan yesterday to help the nation's electric generating utilities switch from using costly oil to cheaper coal and other fuels.
The plan was outlined by the president and other administration officials at the White House meeting with members of Congress representing coal states. Rep Nick J. Rahall (D-W.Va.), chairman of the Congressional Coal Group, praised Carter for showing a "strong commitment toward coal."
According to Rahall, the Carter administration proposal will provide $12 billion in federal grants to private utility companies, mainly to help finance the short-term costs of building new coal-fired generating plants. Legislation to establish the new program is expected to be sent to Congress in early January.
"We're getting progress -- I'm most encouraged," Rahall said during an interview in which he outlined the administration proposal.
The administration proposal would mandate a 50 percent reduction in use of oil and gas by electric utilities by 1990 and would provide penalities for power companies failing to make adequate cuts. According to Rahall, administration officials did not specify the penalties. Stiff fines are known to be under consideration, however.
The plan, as described yesterday, closely resembled drafts of proposed legislation that have circulated in recent weeks among industry officials and members of Congress. It followed President Carter's pledge, in his energy message in July, to require utilities to cut oil consumption by 50 percent in the next decade.
The nation's utilities now burn about 1.7 million barrels of oil a day -- nearly 10 percent of U.S. oil consumption. According to Rahall, Deputy Energy Secretary John C. Sawhill, who outlined the administration plan at yesterday's briefing, estimated the new legislation would reduce the utilities' use of oil and gas by at least 1 million barrels a day.
In addition, Rahall said, Carter and Sawhill promised an "accelerated" effort to require utilities to convert from burning oil to coal under existing energy legislation.
The Department of Energy recently began issuing tentative orders to compel utilities to switch from oil to coal under the Fuel Use Act, a section of 1978 national energy legislation that went into effect last May. The Energy Department plans to issue 20 such orders by Dec. 31, another 40 by Sept. 30, 1980, and 15 more the following year, Rahall said.