It also would impose federal reliability rules on operators of high-voltage power lines for the first time, to reduce the likelihood of another cascading blackout like the one last summer.
Republicans called the bill farsighted and a key to improving America's energy security by expanding energy choices. But Democrats said the tax breaks amounted to giveaways to oil, gas and coal industries that don't need the help. They also said the legislation fails to focus on ways to conserve energy and develop renewable fuels.
The House passed the bill by a vote of 246-180, sending it to the Senate for final approval, probably later this week.
The massive energy bill, covering some 1,400 pages, was crafted during weeks of largely closed-door negotiations between House and Senate Republicans and completed in a late-night conference just before midnight Monday despite Democratic protests.
The first overhaul of U.S. energy priorities in a decade, the legislation would provide $23 billion in energy-related tax incentives over 10 years.
About two-thirds of the incentives would go to the coal, oil and natural gas industries. The Congressional Budget Office estimated the bill's total cost at $32 billion over 10 years, and some private tax advocacy groups put the cost at more than twice that.
"This bill will do more for the security of our country than any legislation we've seen in a long time," said Rep. Billy Tauzin, R-La., the bill's floor manager. He called it "a 21st century approach to energy" and said it would help spur production of a wide range of energy sources as well as improve efficiency.
But many Democrats complained the bill would funnel billions to traditional fossil-fuel and nuclear energy industries at the expense of renewable energy sources, and would do little to foster energy conservation or efficiency. The tax measures include $1.5 billion for conservation and efficiency programs including tax credits for energy efficient homes and hybrid gas-electric cars.
"This bill was written in secret and kept from the light of day," complained Rep. John Dingell. "And like lifting the lid of a garbage can, you get a strong smell."
The bill was written in sometimes bitter negotiations between House and Senate Republicans and presented to Democrats last Saturday for a final vote by the broader conference committee of the two parties. The House and Senate may give final approval or reject the compromise legislation, but cannot change it.
Despite the wide margin of victory in the House, the bill could run into snags in the Senate over a provision that would shield the makers of the gasoline additive MTBE from liability lawsuits. MTBE has been found to contaminate drinking water supplies in at least 28 states.
A group of Senate Democrats said Tuesday they may filibuster the legislation unless the provision is removed.