ENERGY ACT NOT WITHOUT GOOD POINTS.

Byline: Richard Nemec Local View

Inside the Beltway, pundits have a name that describes the recently signed Energy Policy Act of 2005. It is called a ``Christmas tree'' because it contains so many goodies for special interests. Outside of the nation's capital, it is scorned for being fat-laden with political pork.

Regardless, the nation - particularly California - should not ignore or dismiss the 1,724-page document, the product of four years of congressional debate and horse-trading. While it lacks a new focus for carrying the nation into the brave new world of the diminishing fossil fuels, it nevertheless contains kernels of opportunity for those concerned about the environment, renewable energy sources and an expansion of market-based incentives.

True, most of the dollars are aimed at oil, gas, coal and nuclear energy, hardly the stuff to inspire Amory Lovins and others who for several decades have stressed the need to wean the nation off its fossil-fuel fix. I still find parts of the legislation helpful as incentives to California's growth in renewable energy and energy efficiency, being spurred by Gov. Arnold Schwarzenegger and state regulators.

Pieces of the puzzle are included that could help California mold a more coherent, forward-looking energy policy - one that can set an example for the next occupant of the White House and for future congressional leaders. The state and the bipartisan, 18-state Western Governors Association have a real opportunity to lead in this area.

Native American tribes also have an opportunity with this new legislation that the president appropriately signed in New Mexico. There is a whole section - a title - within the voluminous statute for the tribes and energy development on their reservations, which carry vast wind, coal and oil-gas potential.

The solar industry that has tantalized a lot of us for decades with promise of breakthroughs in cost and materials gets its own production tax credit as part of the new policy act. Solar industry entrepreneurs and technicians need to take full advantage of the industry's newfound credits as the rival wind industry has done in recent years with the much-debated federal production tax credit or PTC, which was expanded through 2007 in the new law.

But the real place where the rubber will meet the road, I think, comes from the pact that Govs. Bill Richardson of New Mexico and Schwarzenegger have forged for the WGA and their respective states. Congress members' work surely has to boost these efforts, which so far have been long on vision and expectations but somewhat short on delivering a spike in increased energy from cleaner, more economic sources.

As always, the trouble is in the details, and the details are in the politics of energy. State lines, utility territories and human nature all get in the way of having an energy infrastructure that is more efficient, environmentally cleaner and reliable. Native American attorneys and gubernatorial advisers alike tell me that the federal law is going to help overcome some of these barriers.

If that proves to be true, it will be one of the first times that a long, painful political process actually helps depoliticize a vital segment of our national economy.

California needs to take note of the approaches of other, smaller Western states that have identified their energy strengths and weaknesses, and made plans to deal with them from a realistic standpoint - economically and technologically. California is a huge market for everything, and electricity is no exception, and the state is also a large importer of energy, which is not going to change, even if we reach some of our ambitious renewable-energy and energy-efficiency goals.

States such as Wyoming and New Mexico, with huge natural gas, coal and wind resources, can be and want to be large suppliers to California. Several parts of the new federal act will help make this easier by providing financial incentives for new high-voltage interstate power transmission lines and natural gas pipelines.

Re-regulation initiatives, such as the on-again, off-again Proposition 80 slated for California's special election November ballot, get in the way of the state's bringing more coherence to its energy mix and being able to work with other states. With all due respect to its sponsors, one may see the initiative as outdated and unneeded.

Surely the WGA effort, which is still too much of a numbers-crunching paper chase, has the potential to make some real change in our nation's long-term energy strategy. Ironically, this is the piece missing from the new Energy Policy Act, which continues to emphasize the 20th century workhorses of coal, natural gas, oil and nuclear power.

Security and long-term economic interests demand that the United States, as the leading industrialized nation, and its most populous state, California, lead the way to a more diverse energy portfolio that is easy on our environment and our pocketbooks.