Aug. 5 (Bloomberg) -- Republican John McCain and Democrat Barack Obama sparred for a second day over their competing plans to ease the pain of rising energy costs in two battleground states hit hard by the sagging economy.

McCain was in Michigan emphasizing his commitment to expanding nuclear power generation for electricity as part of a broader strategy for U.S. energy independence. In Ohio, Obama touted his call for an immediate tax rebate to help consumers pay energy bills, in part, by taxing oil company profits.

``Solving our national energy crisis requires, as I've said, an all-of-the-above approach,'' McCain said after touring the Enrico Fermi Nuclear Plant in Newport, Michigan.

The presidential candidates have spent the last week debating who is best equipped to fix the economy, as record gasoline prices, plunging home values and shrinking credit access have thrust the issue to center stage in the presidential campaign. Both have changed previous positions as energy prices rise on the list of voter concerns.

The backdrop is the latest in a series, which has included oil rigs in California and an electric car from General Motors Corp. that McCain has used to illustrate his plan to wean the U.S. from overseas energy sources.

Incentives

The Arizona senator would boost innovation by offering purchasers of zero carbon-emission cars a $5,000 tax credit. A graduated tax credit would apply to purchases of lower emissions. He would establish a $300 million prize for development of new battery technology for vehicles and invest government money to develop clean-burning coal.

``We're going to achieve energy independence, and we're going to do it by using every resource at our disposal to get the job done,'' McCain said, emphasizing his differences with Obama.

``Senator Obama has said that expanding our nuclear power plants 'doesn't make sense for America,''' McCain said. ``I couldn't disagree more.''

Opponents of nuclear power used McCain's visit to Fermi to question the industry's safety record. The Sierra Club yesterday distributed a history of Fermi's woes, including a partial meltdown of its Fermi 1 reactor in 1966. Most recently, a fire broke out in the now-decommissioned Fermi 1 reactor this May, according to the Nuclear Regulatory Commission's Web site.

The Fermi 2 plant that McCain toured began operation in 1988 and supplies more than 2.3 million customers in southeastern Michigan. The 1,100-megawatt boiling water reactor employs about 900 people.

Oil Interests

Obama emphasized his support for increased taxes on oil companies to help pay for a tax rebate of as much as $1,000 per couple to help with energy costs.

``Here in Ohio, you're paying nearly $3.70 a gallon for gas -- two and a half times what it cost when President Bush took office,'' Obama told a crowd of about 2,400 people in Youngstown. ``Senator McCain not only wants oil companies to keep every dime of that money, he wants to give them more.''

In addition to increasing nuclear capability, McCain also wants to end a federal moratorium on offshore oil and gas drilling, a reversal of his past opposition to such exploration.

``My opponent doesn't want to drill. He doesn't want nuclear power. He wants you to inflate your tires,'' McCain, 71, said last night, speaking to a crowd at the Buffalo Chip campground in Sturgis, South Dakota, site of what organizers say is the world's biggest gathering of motorcycle enthusiasts.

Hybrid Vehicles

Obama today derided McCain's insistence on off-shore drilling, saying that ``instead of offering a real plan to lower gas prices, the only energy plan that he's really promoting is more drilling.''

``That's what he talked about yesterday -- `I want to drill here, I want to drill now,' I don't know where he was standing,'' the Illinois senator, 47, said.

As part of his plan, Obama is setting a goal of putting at least 1 million so-called plug-in hybrid vehicles that would get as much as 150 miles to a gallon of gasoline on the road by 2015. That effort would be spurred by a $7,000 tax credit for consumers who buy them. Automakers would get $4 billion in loans and tax credits to help them retool factories to build such cars and trucks.

He also proposes requiring that 10 percent of U.S. electricity come from renewable sources by the end of the next president's first term and cutting U.S. demand for electricity 15 percent by the end of the next decade.

McCain also supports greater development of alternative energy sources and proposes offering consumers a $5,000 tax credit for the purchase of low-emission electric or hybrid vehicles.

To contact the reporter on this story: Lorraine Woellert in Newport, Michigan, at lwoellert@bloomberg.net; Julianna Goldman in Youngstown, Ohio, at jgoldman6@bloomberg.net.

Last Updated: August 5, 2008 18:00 EDT