State lawmakers should work on finding compromise with Gov. Ed Rendell to implement his progressive energy policy.

If passed, Rendell's program promoting renewable energy and conservation would allow Pennsylvania to join a handful of other states on the leading edge of energy policy. And the initiatives have the potential to produce long-term economic benefits for the state.

There is broad support for ethanol and biodiesel in the Midwest, where corn and soybean production is plentiful. But there still is debate over the net economic benefits of ethanol, starting with the fact that it takes nearly as much energy to produce ethanol as the finished product provides.

The most efficient ethanol production is found in Brazil, where sugar cane yields five or six times the energy output of corn. For now, at least, corn is the focus of ethanol in the U.S., but that could change.

Research is ramping up on cellulosic ethanol, which uses corn stalks, wood chips or perennial crops such as switchgrass as feedstock instead of corn kernels. There is tremendous potential in cellulosic ethanol, and Pennsylvania could find itself in a leading position for investment with state support and incentives provided through Rendell's energy plan.

Conservation, too, is important. It is much easier and cheaper to save electricity than it is to build new generating capacity. One element of Rendell's energy plan, the use of so-called smart meters, would help consumers reduce their consumption by showing the times of day when electricity is relatively more or less expensive. Incentives to buy energy-efficient appliances also would help, though consumers already are making this shift on their own.

During failed negotiations over the governor's energy plan this summer, Republican lawmakers balked at Rendell's plan to add a tax on electric bills to pay off the state's debt taken on to fund the program.

Many Republicans support smart meters but believe funding should come from elsewhere in the state budget, rather than adding a new tax.

They're right. It's a matter of priorities, and legislators should sit down with Rendell and look for alternative financing ideas.

When discussing the need for an additional $1 billion a year to repair the state's roads and bridges, Rendell has promoted the idea of privatizing the Pennsylvania Turnpike, if tolling of Interstate 80 is rejected by federal officials. If privatizing the turnpike to raise funds for transportation is acceptable to Rendell, he should consider privatizing the State Store system. Selling off the state's liquor retail system could bring in $1 billion or so — more than enough to fund the governor's energy initiative.

Harrisburg officials should ask themselves which is more important, a progressive energy program or preserving an alcohol sales system that is at odds with every other state in the nation, and a questionable venture for state government.

Selling off the State Store system has run into political opposition from unionized workers in the stores, but the time might be right to join other states in leaving the sale and marketing of alcohol to the private sector.

In too many areas, Pennsylvania is out of step with other states and behind the times in terms of adopting progressive ideas. With a progressive and innovative energy initiative, Pennsylvania could be among the states leading the nation for a change.

Rendell does not have to get everything he wants in the energy compromise, but too much watering down of his proposal would be a mistake. The basic elements of his program should be preserved.

Rendell's administration has demonstrated creativity in crafting the energy initiative. There should be a similar display of creativity in exploring alternative ways to finance the programs.

For instance, some have suggested that smart meters could be rented for a very small fee rather than provided free. And grants for purchases of energy-saving appliances, which would be funded by the state taking on additional debt, could be replaced with tax deductions, tax credits or the elimination of state sales tax.

Rendell should be willing to examine alternative methods of financing his energy plan. Letting the entire program sink because of a dispute over an additional tax on electricity bills would be foolish.

Lawmakers can surely see, as Rendell does, the potential long-term benefits in promoting renewable fuels, encouraging energy-related investment and advancing energy conservation. It's a matter of setting priorities and exploring creative ways to finance the plan, from selling the State Store system to a mix of tax deductions and tax credits.

It's time for Rendell and the General Assembly to put some energy into compromise and creativity.

— J.L.W.III