In January, U.S. House Democrats released details of an economic stimulus package worth more than US$800 billion that includes many energy-sector provisions. It is called the American Recovery & Reinvestment Act of 2009.

“The critical state of our economy calls for swift, comprehensive action, and this package will provide relief to all communities and all sectors of the American economy,” said House Ways & Means Committee Chairman Charles Rangel.

The bill includes a long-term extension of the production tax credit for wind power and temporarily allows firms to claim the investment tax credit in lieu of it. Rangel's committee is working with energy and commerce committees to craft a new grant program for renewable energy projects.

The package also includes Clean Renewable Energy Bonds, Qualified Energy Conservation bonds, and energy efficiency and conservation tax incentives. The bill would provide R&D credit for smart energy conservation, energy efficiency and renewable energy. Specifically, the package includes $10 billion for wind power, $4.5 billion for the smart grid, $10 billion to cities and states for efficiency programs, $6.2 billion for weatherization and $2 billion for advanced battery research, said Select Committee on Energy Independence & Global Warming Chairman Ed Markey.

“The stimulus package cannot be a plan to dig ditches or create a couple of pork-ridden specialty projects,” said Markey. “These greenbacks should yield real results for all. A stimulus package focused on more efficient and renewable energy can result in greater labor intensity and higher wages than investing in oil production.”

Much of the money allocated to energy projects should flow through cities where governments have shovel-ready programs, said Philadelphia Mayor Michael Nutter at Markey's hearing. With $250 million, Philadelphia could trim the energy use of 100,000 row houses by 20% and that money would be paid back by cheaper energy in two years. Then that money could be used to improve other homes until all the row houses in the city are efficient within a decade. That $250 million for Philadelphia would be part of a $50 billion effort nationwide. Other cities have programs that were geared up to get energy efficiency and conservation block grant money that was never allocated.

The American Wind Energy Association would like to see the production tax credit “refund-ability” in the final draft of any stimulus package, its CEO Denise Bode told the hearing. That would let cash-strapped firms take advantage of the credit as Congress intended in a market where they have run out of options, she added.

The GridWise Alliance applauded the House for the attention given to the smart grid in the package, calling the $4.5 billion a good start. The alliance hopes more follows as a recent report for it by KEMA found that a $16 billion federal investment could create up to 280,000 new jobs, the high-level policy group reminded.