Energy bill: No fast fixes for rising fuel costs

A compromise bill hammered out by the Senate has efficency incentives but no immediate relief for high oil and gas costs.

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(FORTUNE Small Business) WASHINGTON, D.C. -- After months of wrangling, the Senate hammered out an energy bill Wednesday that includes a compromise on tax incentives for renewable energy. Despite small-business provisions remaining intact, the bill - passed by the Senate late Thursday - provides little relief to companies facing rising fuel costs.

"We need a quicker fix, something to help right now," said Michael Mitternight, owner of Factory Service Agency, a commercial air conditioning company in Metairie, La. He estimates that he spends $650 to $850 a week on gas for his 10 to 12 service trucks and other cars, up from $400 to $500 just last year.

"That's something hard to build into the cost of doing business," said Mitternight, whose $2 million company has 11 employees.

Energy bills batted about in Congress this session, including one passed by the House of Representatives last week, have focused on the longer-term initiative of boosting spending on renewable energy, rather than increasing existing oil reserves by opening up new sources of drilling. The House's energy bill includes $22 billion in tax incentives for renewable energy development, along with increased fuel efficiency requirements for cars and light trucks and a mandate that 15 percent of the power generated by investor-owned utilities come from alternative sources by 2020.

The Senate's compromise bill drops that last provision, but still includes tax incentives and heightened fuel efficiency standards. The Senate bill also kept small-business measures requiring the Small Business Administration (SBA) to start a program aimed at teaching small businesses to become more energy efficient, and boosting funds available to help small businesses upgrade equipment to reduce energy consumption.

Those uncontroversial measures were "low hanging fruit" that will help small companies reduce costs in the long run, according to Kyle Kempf, government affairs director at the National Small Business Association, a small-business lobbying group. The SBA was supposed to make changes years ago to promote small-business energy, and Kempf hopes that this new bill will spur the agency to act.

Still, with oil prices reaching past $94 a barrel on Wednesday, such long-range provisions won't help that many small businesses, said Karen Kerrigan, president of the Small Business and Entrepreneurship Council, another advocacy organization. Companies are already doing all they can to be save energy, she said.

This past year, 78 percent of small businesses participated green measures such as recycling, according to an Allbusiness.com survey. But only 67 percent of businesses have invested in energy efficiency programs, according to a National Small Business Association survey of 406 business owners.

Mitternight says that right now he's stuck with the trucks he has, because more fuel-efficient vehicles can't haul the heavy equipment his company installs.

The Senate bill may spur innovation among companies developing green technologies by offering incentives, but it doesn't provide any immediate aid in lowering energy costs by increasing the supply of oil, Kerrigan said. With greater renewable energy reserves still a distant solution, businesses need immediate assistance, she argued.

"What we need now are more sources of energy to feed our growing energy needs," Kerrigan said.

Meanwhile, Mitternight had to find a way to afford his rapidly rising gas bill.

"I've got two sons in the business and this bill may help them, but not me," he said.

Congressional energy-bill efforts may be all for naught. The Senate bill returns to the House for a vote next week; if the bill makes it out of Congress, a threatened presidential veto remains possible.  To top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.