A Senate committee on Wednesday adopted language that would create a special bank within the Energy Department to dole out government loans and loan guarantees for clean energy projects using advanced technology.

The Clean Energy Deployment Administration would be part of comprehensive energy legislation that the Senate Energy and Natural Resources Committee hopes to approve later this month.

The new agency would provide various forms of credit to support environmentally friendly technologies that diversify the nation's energy supply and reduce carbon dioxide emissions.

Supporters of the green bank say it would clear the backlog of applications pending at the Energy Department from companies seeking financing for clean energy projects.

Funding for the green bank would come by transferring the billions of dollars for such projects already included in the economic stimulus package that the Energy Department now oversees.

About $10 billion more would then be appropriated by Congress to the agency.

At Wednesday's hearing on the green bank, the committee rejected a proposal to limit the amount of financial support a particular energy technology could receive to 20 percent of the funding available from the bank.

The legislative clock is ticking down for the committee to finish the energy bill by May 22, when lawmakers leave for their Memorial Day holiday recess.

The committee will hold more hearings next week to consider a contentious proposal that would require U.S. utilities to generate a portion of their electricity supplies from renewable energy sources such as wind and solar.

Committee Chairman Jeff Bingaman said if the committee could not reach an agreement on a renewable electricity standard, he expected other lawmakers would try to attach the plan to the legislation on the Senate floor when the full chamber takes up the bill.

The committee also plans to debate proposals to give the federal government the authority to approve over state objections transmission line projects that would carry electricity supplies generated by renewable energy sources and, separately, to require the Energy Department to create emergency fuel stockpiles that would hold 30 million barrels of gasoline and diesel fuel.

(Reporting by Tom Doggett; Editing by Lisa Shumaker)

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